We are so grateful to sit down with well-known small business community leader, journalist, podcaster, and entrepreneur Loren Feldman, of 21 Hats. In the first of our three-part conversation with Loren, we discuss necessary collaboration, problem solving, and shared knowledge for survival and success.
Sure. Well, thank you Jill. It’s a pleasure to be here. I appreciate your having me. I have been doing this a long time—about 20 years now, it pains me to say. Previously, I’d been a general interest journalist with magazines, a little bit of business stuff. I did go to business school, undergraduate. But in 2002, a friend of mine was named editor of Inc. magazine, and he was kind of figuring out what he was going to do with it, and I happened to have been fired from a job as editor of Philadelphia Magazine previously, So I was looking for something to do and he invited me to sort of just hang out, no pressure, see if I could help and get to know it.
I had had some experience with business journalism, but no experience with entrepreneurship, and I kind of fell in love with it. I thought I would be there for a few weeks, and 20 years later I’m doing the same stuff. It’s been great. I spent about six years at Inc. and then I went to The New York Times. They kind of asked me to build their version of an Inc. magazine as a web vertical inside The New York Times. I did that for about six years, and then I went to Forbes and they wanted me to do their version of it. And I spent about five years there.
They’re all great publications with really smart people. At each place, they all wanted something a little bit different, and I learned something really important at each of them. And then ultimately, about two years ago, decided to leave Forbes and try to bring it all together in one place. I found a partner who was kind of my backer and we created something we called 21 Hats, referring to all those hats that an entrepreneur has to wear. The idea was to try to bring together everything I’d learned at Inc. and the Times and at Forbes, and create the platform for business owners. Unfortunately, we ran into this pandemic thing you might’ve heard about, and our plans haven’t quite played out the way we hoped, but we’re still working on it and still trying to do some good stuff.
I’m curious, with your work with the small business owners and in speaking to them, what are the creative collaborations or problem-solving practices that you’re seeing entrepreneurs embrace now? Which ones are working, and which ones maybe are not so much?
Interesting. That’s a really good question—that I should have some more time to think about.
I can come back to it.
No, let me give it a shot. I’m trying to think of a good example. I think we’ve all been so thrown off by what’s happened. We’ve all had to develop new routines and figure out new solutions, do things differently. Again, a lot of that’s been out of desperation, and it’s been difficult and not all of it has succeeded, but I think it’s broken down barriers that will help a lot of people in the long run.
Just the fact that you and I are having this conversation over video right now—this kind of conversation happens—you’re doing this to publish it—but people are doing this all the time not to publish it. And one of the things that changed for me, we collaborated with a lot of people on webinars. I mean, webinars have existed for a long time, but the idea that we could get a large number of people to set aside time in the middle of their workday to watch a webinar at the drop of a hat—it never would have occurred to us. But it became something that was acceptable and people started doing it, and we found ways to partner with other companies that had information to share.
I just did a webinar for a really terrific organization called The Great Game of Business. They’re not that well known. They’re not a household name, but they have a cult-like following among people who believe in the practice of open-book management—the idea being that if you share what really drives your business with your employees, your employees will get much more engaged, they will care more about their jobs, they will look for opportunities to help the business, they will generate ideas from the frontlines that you otherwise wouldn’t have gotten. A lot of business owners who do it actually say it takes the weight of the world off them because it means they no longer have to answer or solve every problem themselves. A lot of the best answers—better answers actually—come from the frontlines, up to the top.
So anyway, they have a terrific organization. I’ve been going to their annual event every year for, I don’t know, close to 10 years. I’ve made a lot of great contacts there. This year, they to cancel it. Actually, I think it was held last week, or maybe this week—I’ve lost track now—but I suggested to them that they let me do a pre-conference webinar talking about all the reasons not to do open-book management, because a lot of people are skeptical of it. A lot of owners say, “Why do I want to share that information?” If they’re not doing well, they’re concerned that they’ll scare their employees away. They’ll run in the other direction. If they are doing well, they’re concerned that their employees will ask, “Well, why aren’t I getting paid more?”
Those are very legitimate questions. There are good answers to them. So, I pitched this collaboration: Let me do it. We’ll host it, but I’ll do it for you. And it’ll turn into a video that you’ll be able to use for years, because anybody who considers joining your organization and adopting this practice is going to have these questions. They’re going to want to get them answered. Let’s just create the best possible conversation we can. I took three of the owners from my podcast, who I knew were skeptical about open-book management, and got the organization to supply three of their superstars, people who have done this for years and had success with it, and we had a conversation. I orchestrated it, it got a little tense at times, because there were differences of opinion, but we got to the heart of the matter. We had entrepreneurs asking very real questions.
I’m sure we scared some people away. I’m sure we brought some people in. But that’s what we wanted to do. It’s not for everybody. Some people who were scared away should have been scared away—it’s not right for them. But for others that would work. And I’m hoping we had a conversation that helped a lot of people. I don’t know if that is what you were looking for, but that’s a collaboration that would not have happened if it hadn’t been for this crazy environment.
Yeah. I mean, that’s exactly it. I’m seeing things happen that we…I liked to say as I was an entrepreneur with competitors and people in my industry, rising tide raises all ships, right? There are so many different ways to come together. When this all started, I was reading an article that was about Mark Cuban speaking to nonprofits about they’re going to be facing. And kind of the hard answer for them, from his mouth, which I think makes a lot of sense, is you might have to combine forces. You might have to meld your ideas into one. You can’t all survive and ask for the same amount of money. Some of you have better mailing lists, some of you have better adoption events, some of you have better whatever, and it’s maybe time to group, which I think makes a lot of sense. And I know that there’s even small businesses doing that. Does the city of Chicago need 25 comic book shops? No, but maybe it needs 10 or 15, and maybe you’ve got a better back catalog than I do, or whatever.
Right. Some of that’s painful collaboration as people are weeded out, but certainly that kind of thing is happening.
Right. And I’m curious, to that end, what do you love about entrepreneurs and entrepreneurship? This is your primary language. What do you love about it?
Oh, I could talk for hours about that. I had no idea what I was getting into when I got into this. As I told you, I went to Inc—at the time, I had kind of specialized in helping magazines redesign and rethink what they were doing. I’d done that at a couple of places, and I thought I would do that at Inc. and then move on, but I really did fall in love with it. Part of it is I love the intellectual challenge. I love trying to figure out which businesses will succeed and which ones won’t, and how much of it is the idea and how much of it is the execution. To me, that’s all really fascinating. So that was part of it.
Entrepreneurs are really interesting people. I’m not going to tell you anything you don’t know. Obviously, they’re by definition risk-takers. One of the things that I learned doing this is something that a lot of my colleagues as business journalists still don’t fully understand. I mean, I’ve worked with some of the smartest business journalists in the world at Forbes and The New York Times. And they would often ask me, “Why are you interested in covering small business or entrepreneurship?” To them, all they heard was the word “small.” They understood that it was important in the aggregate, but they didn’t necessarily understand what I found exciting about it. And to them, it was, “Alright, entrepreneurship—I get it if you’re talking about a venture-backed company that’s going to take over the world and change the world, Uber or something like that”—that they got.
But the typical, smaller entrepreneur, who’s not venture-backed, they didn’t realize that that’s real risk. That’s risking your own money and your own livelihood—and often your own house. Most business journalists have no idea that it’s routine for a business owner to borrow against their own home. They think risk-taking is what happens on Wall Street, which is of course risk-taking with someone else’s money in most instances.
I love that I learned from a lot of people at Inc. Their star writer at the time was a guy named Bo Burlingham, who’s written some terrific books, including Small Giants and Finish Big. He kind of took me under his wing and I sort of followed him around for a few years, met a lot of great people, and learned a lot from him.
One of the things I learned from him is that he discovered that a lot of the best ideas in business bubble up from smaller companies. If you pay attention to what’s happening, they’re the ones that are really being creative. He was aware of that long before you saw big companies creating accelerators, deciding that their own R&D department wasn’t working as well as the startups out there that were independent and doing their own thing and not dependent on the budget of a big corporation. You’ve seen this trend of big companies trying to create their own accelerators to harness that power of entrepreneurship and startups. Bo saw this a long time ago.
Even what I just mentioned to you, the open-book management idea—that’s something that bubbled up from a small, failing company. It was actually a division of International Harvester that was told that had to shut down in Springfield, Missouri. They remanufactured engines there. And the head of the union at that shop said, “Wait a second, give us a chance. We’re going to buy this from you and we’re going to make it work as a company.”
They did that about 30 or 40 years ago, and it’s a more than $600 million business today with all kinds of divisions—all predicated on this open-book practice and, in fact, on employee ownership. They have people who work on the frontlines, working on an assembly line who retire as millionaires because they own a piece of the company. They have a stake in the outcome.
That’s a long answer to your question. But to me, learning about these things was really exciting. I loved meeting the people, hearing the ideas, and sharing what these companies have learned so that other companies can emulate them and try to do the same thing themselves. To me, that was really exciting.
Yeah, and I think we’re seeing so much of that “difficulty breeds ingenuity” attitude right now. When I had a business, it started during a recession and it took off like gangbusters. And a really interesting story I came across doing this series is I talked to two folks in Louisville, Kentucky, and they were attending a protest after David McAtee’s murder. And during the protest in Louisville, Kroger shut down in the neighborhood with customers inside, said, “We’re not doing this,” boarded up the windows, people coming in got kicked out, and left the whole West End of Louisville in a food desert. They ended up starting their own delivery and order service for groceries for their neighbors and community—a nonprofit—and then they realized that the community really needed it.
Now they’re starting a for-profit business, and I’m not sure what the model is called—they’re taking very low profit—but what they’re doing is creating living-wage jobs and giving the employees at this market that they’re creating some status in the community—”These are good jobs. We’re not going anywhere. We’re not a nonprofit who’s coming in here, fly by night, ‘we’ll only be here six months’—we’re going to establish and stay here and create a community market so that we’re not reliant on these other companies that are just going to leave when things get hard.” That’s one of the coolest stories I’ve heard come out of this. And what a business model to create from difficulty that supports its own community and become symbiotic. It’s been great.
That’s a great example. And actually, what you were saying about your own business, you only mentioned it briefly, but that’s a perfect example too. When I first got started and started meeting entrepreneurs like you, it was all new to me. And the idea that growing really fast, that that seemed like, well, that’s everybody’s dream, right? That’s what you want. That’s everybody’s goal. But the stress that that can create and the dangers of failure that that can create, I had no idea. I’m not saying anything that an entrepreneur like you doesn’t already know, but for someone from the outside, learning that, trying to understand that, that’s just a perfect example and why I loved meeting entrepreneurs like you as I started trying to figure this out.
Yeah. I mean, it’s a tightrope every day with no net. It is every single day. Before I came to Ruby, which is such a great place for me to be, because I’m really serving small businesses which I understand so much, every single day was…you never knew what you were going to get. It was often in the car, eating grocery store sushi on the way from meeting the banker to go meet somebody to see if I want to hire them, to go meet a manufacturer, to go meet a vendor—and then, if I’m lucky, get home at a decent hour, eat dinner, and then start working again until midnight. It’s every day, and that was for 10 years. And yeah, I’m just sad I didn’t meet you sooner because I think we would have avoided some of the pitfalls of being successful. Nobody tells you in our country, with our model of business, that you can be too successful and you can be too successful too quickly.
If you haven’t seen it, there’s a terrific book called No Man’s Land. It was written by a guy named Doug Tatum. What he writes, essentially, is that every company that has any success is eventually going to reach a point that he terms “no man’s land,” where the things that allowed you to succeed to the point where you succeeded are no longer going to work. You reach a point where you get a big contract or something happens and you have to step it up. And the people you have in place, maybe they’ve been great. Maybe they’re your friends, maybe they’re your relatives. They’ve been incredibly loyal, you love to see them, maybe you spend Thanksgiving with them, but they’re not the right person to take the next step, and you have to have a really difficult conversation with them. That’s just one small example. It might be your relationship with your bank that you’ve outgrown. There are any number of things. You’re going to hit a wall in all sorts of ways—and that’s if you’re successful! And that’s something a lot of people don’t realize. It’s just so hard.
So if folks want to find out more about your podcast, your daily email, where can they go and find out more?
Well, they can find me on LinkedIn if they’d like to connect. I’m always happy to connect with people. It’s a Loren, L-O-R-E-N, Feldman, F-E-L-D-M-A-N. They can go to 21hats.com and find our archive of podcasts there. We’ll be publishing a new one on Tuesday. We always publish on Tuesdays. Or they can go wherever they get podcasts, whether it’s Apple or Google or whatever.
Thank you so, so much for your time and insight. I’m really appreciative.