A long time ago, I was about to graduate from college. I went to say goodbye and thank a man who had encouraged me and mentored me for two years. It was very pleasant and, as we were wrapping up, I asked if he had any advice for me. He said he did not like to give life advice but I persisted. “Okay, Don. Here it is. Don’t live a mediocre life.” Surprised, I promised him that I would try not to. He got a bit stern and said, “Don’t be mediocre. Most of us are.” I did not think a lot about it but, as I have gotten older, I see what he was telling me.
Let’s face it. Most of us do live mediocre lives. We get up each day and go to a job that pays the bills but we do not really love it. In many cases, we are “underemployed” and spend our days doing tasks below our skill level. We never have an impact on our industry or community and more damning, we never achieve our dreams. People start talking about living for the weekends and vacations. They have effectively given up and I have heard them refer to themselves as survivors. It is sad but normal. And, some of them are not even 40 years old.
I have observed a lot of mediocre people and see a dreary sameness to how they spend their free time. They watch too much TV, party a lot, or escape in to a ridiculous obsession with sports. They also (sadly) have certain things in common:
1) They never think big. Not mindless daydreaming of winning the lottery but they have no life plan. They do not live life—it happens to them. And, they wind up bitter.
2) They rarely take thought out and calculated risks.
3) They surround themselves with people who have the same fears of unemployment or winding up broke and with few friends.
So, my young friends out there, may I offer the following advice that I was given. Don’t live a mediocre life. Look at your environment. Are you friends and family holding you back? Do those close to you tell you that you are lazy or not good enough? Do you go to the same websites all the time? Are you in a comfortable rut? Maybe that is a large part of what is holding you back. Remember the old adage—“If you always do what you’ve always done, you’ll always get what you’ve always gotten.” A cliche, yes. That does not mean that it is not true.
Most advertising is mediocre. Did you notice now how a good commercial stops you in your tracks even in this age of commercial avoidance? Most people are mediocre at their jobs, most Americans of a certain age are overweight, others are close to broke after a lifetime of work but hurt by bad decisions. If you really care about your life, then you should be insulted if you consider yourself to be mediocre. If something is REALLY important to you, you will find a way to change.
Warren Buffett tells graduate students to not “go sleepwalking through life.” That was what my economics mentor was trying to tell me. Find your passion, follow it, and your life will be anything but mediocre.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, July 11, 2020
Saturday, July 4, 2020
Imposter Syndrome
Happy Birthday, United States.
Virtually all of us at some point in our careers suffer briefly or significantly from what psychologists often refer to as “Imposter Syndrome.” We may fear that we are not good enough or do not belong in our job or be the person to give a major presentation to a big client or to an industry forum. This often triggers a great deal of anxiety—some people freeze and procrastinate while others bury themselves in work and then their lives get way out of balance. Over the years, many people came to me about it especially before a major event or on taking a new job. Here are some things that I suggested to them:
1) Stop beating yourself up—most of the time, when you present to a group, you are THE expert in the room (it can get tricky at industry gatherings) and, if you have prepared properly, you should be able to field questions and make a favorable impression. Also, make a list of questions that could be asked and prepare answers so, from the floor, you look on top of your game.
2) Look at real evidence—pull out your resume. Is it all true? Then you should have some confidence about what you are doing. Think of your past successes. Did bosses or clients ever pay your compliments in writing? Re-read them. You are not a fraud.
3) Share your fear with friends is what many tell you to do. I would be VERY careful about that. If you do, make sure it is someone NOT connected to your business or someday it may be used against you. If you want to keep a secret, tell no one has always been my mantra. Sometimes people will slip and tell your fears to others with no malicious intent but it can come back to haunt you. I was flattered when people told me of their fears and I tried to encourage them but it stopped with me permanently.
4) Discount outside sources—people would tell me that they were where they were due to 100% luck. Maybe, if Mom or Dad owned the business but usually you were in the job you have or given a major assignment due to your abilities. There is no question that being in the right place at the right time happens but you still have to prove yourself.
What about the famous advice of “fake it until you make it”? I have very mixed feelings about that. If you are nervous or awkward socially, then stepping outside yourself and exuding some confidence can be quite beneficial both personally and professionally. Yet, at times, I have seem too many people confuse confidence with competence. Clearly actions can follow feelings but you still have to know your stuff. With some people there is a blurry line between confidence and lies.
About 20 years ago, a media salesperson asked me to attend a meeting with a foreigner who was going to launch a service in the United States. He had a wonderful British accent and made a fairly interesting case for getting Angel investors such as my friend and others present to get on board as financial backers. With him, was a wildly ebullient young fellow who said that he was an investment banker. He took a fair part in the Q&A session after the pitch deck was reviewed. Then, he said that after a brief launch in the states, shares would be available to the general public. I innocently asked if they had plans to issue ADR’s or perhaps an ADS? The young man got flustered and told me that I was not fair and that I was using some new financial term to embarrass him. “When did these ADR’s come in to the stock market”?, he asked. “Last week?” With a soft smile, I answered, “1927.” Getting red in the face, he asked how long that I been buying them. “Since 1973”, was my reply. Clearly, the young guy was trying to fake it until he made it. Not that day, and my friend and his associates saved their money. I followed up for a few years and the fledgling company never saw the light of day in the United States. Were they con-men? Hard to say for sure but the young “investment banker” did not pass the smell test.
Finally, the best advice for defeating Imposter Syndrome that I have seen was in Dr. Gay Hendricks book, THE BIG LEAP. The good doctor wrote, “ The things you most love to do reflect your unique abilities. When you are doing what you are really meant to be doing, you don’t have to generate self doubt.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Virtually all of us at some point in our careers suffer briefly or significantly from what psychologists often refer to as “Imposter Syndrome.” We may fear that we are not good enough or do not belong in our job or be the person to give a major presentation to a big client or to an industry forum. This often triggers a great deal of anxiety—some people freeze and procrastinate while others bury themselves in work and then their lives get way out of balance. Over the years, many people came to me about it especially before a major event or on taking a new job. Here are some things that I suggested to them:
1) Stop beating yourself up—most of the time, when you present to a group, you are THE expert in the room (it can get tricky at industry gatherings) and, if you have prepared properly, you should be able to field questions and make a favorable impression. Also, make a list of questions that could be asked and prepare answers so, from the floor, you look on top of your game.
2) Look at real evidence—pull out your resume. Is it all true? Then you should have some confidence about what you are doing. Think of your past successes. Did bosses or clients ever pay your compliments in writing? Re-read them. You are not a fraud.
3) Share your fear with friends is what many tell you to do. I would be VERY careful about that. If you do, make sure it is someone NOT connected to your business or someday it may be used against you. If you want to keep a secret, tell no one has always been my mantra. Sometimes people will slip and tell your fears to others with no malicious intent but it can come back to haunt you. I was flattered when people told me of their fears and I tried to encourage them but it stopped with me permanently.
4) Discount outside sources—people would tell me that they were where they were due to 100% luck. Maybe, if Mom or Dad owned the business but usually you were in the job you have or given a major assignment due to your abilities. There is no question that being in the right place at the right time happens but you still have to prove yourself.
What about the famous advice of “fake it until you make it”? I have very mixed feelings about that. If you are nervous or awkward socially, then stepping outside yourself and exuding some confidence can be quite beneficial both personally and professionally. Yet, at times, I have seem too many people confuse confidence with competence. Clearly actions can follow feelings but you still have to know your stuff. With some people there is a blurry line between confidence and lies.
About 20 years ago, a media salesperson asked me to attend a meeting with a foreigner who was going to launch a service in the United States. He had a wonderful British accent and made a fairly interesting case for getting Angel investors such as my friend and others present to get on board as financial backers. With him, was a wildly ebullient young fellow who said that he was an investment banker. He took a fair part in the Q&A session after the pitch deck was reviewed. Then, he said that after a brief launch in the states, shares would be available to the general public. I innocently asked if they had plans to issue ADR’s or perhaps an ADS? The young man got flustered and told me that I was not fair and that I was using some new financial term to embarrass him. “When did these ADR’s come in to the stock market”?, he asked. “Last week?” With a soft smile, I answered, “1927.” Getting red in the face, he asked how long that I been buying them. “Since 1973”, was my reply. Clearly, the young guy was trying to fake it until he made it. Not that day, and my friend and his associates saved their money. I followed up for a few years and the fledgling company never saw the light of day in the United States. Were they con-men? Hard to say for sure but the young “investment banker” did not pass the smell test.
Finally, the best advice for defeating Imposter Syndrome that I have seen was in Dr. Gay Hendricks book, THE BIG LEAP. The good doctor wrote, “ The things you most love to do reflect your unique abilities. When you are doing what you are really meant to be doing, you don’t have to generate self doubt.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, June 25, 2020
Follow-up--Advertising Agencies and the Covid 19
Earlier this week, I put up a post on Advertising Agencies and Covid 19. It generated a great many comments from agency principals and senior staffers. Many of the respondents wanted to know why I did not contact them for their opinions, some agreed with the people whom I paraphrased and others weighed in on what was not covered.
So, with a sense of fairness, here are a few issues raised by those whom I did not contact in the first round:
1) “Cole, the pandemic is hitting my business really hard but it is a foreshadowing of what is to come in the workplace. The press is covering the hardship faced by service workers in a variety of fields from food service to uber driving. What they do not seem to grasp is that another shoe will drop months from now. White collars jobs are going to get hit in a big way and many will NEVER come back. My own firm with under 50 employees will survive but will definitely be smaller in 2021. I have found out clearly for the first time who the keepers are in my organization. Some of my employees have surprised me and really “risen to the occasion” and performed very well. Others are not cutting it and complaining to me more than ever about minor issues ignoring that I am trying to live to fight another day. When the smoke clears, we will be leaner, much more efficient and I bet more profitable. My clients are telling me similar things and my network of business contacts echos that sentiment as well.”
2) “Has any good come out of this crisis? Yes, and I did not see it coming. There is very little politics now at the firm. Many are happy to be still drawing a paycheck so there is less bitching about who gets plum assignments. Also, with 80% of the team working at home, I don’t have to listen to the prepubescent B.S. about comparative office square footage or nice desks or lamps anymore. When we come back, my tolerance for that old nonsense will not be tolerated.”
3) “I see things much more clearly now. To survive, I am going to have to change the inner workings of my shop. That will be a huge challenge. Why? The late Eugene Kleiner, an early player in venture capital in Silicon Valley, once said, “It’s difficult to see the picture when you’re inside the frame”, which is so true. I used to see my team as a family. A lot has come to the surface the last few months. When the new era begins sometime next year (I hope), I will hand pick my team. Each employee will need to be flexible, humble and a team player.”
4) “ I used to float a major media client a lot of money for several years. One year he was in to us for a million dollars and I paid the media as I knew that he was good for it. He asked me to do it again for later this year. I had to say no. He was hurt but I offered to open my books and I did not have the cash cushion to help him and I was not sure that he would ever be able to pay me back. He went to a media buying service and offered a nice fee but wanted them to pay the media first. The buying firm leader called me and I said have the media bill him directly or do not take the business. He passed on the account as he wondered when he would even get his fee. Long standing deals and relationships are unraveling. I am asking for fees upfront and am not wasting time or money on speculative new business pitches at present.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
So, with a sense of fairness, here are a few issues raised by those whom I did not contact in the first round:
1) “Cole, the pandemic is hitting my business really hard but it is a foreshadowing of what is to come in the workplace. The press is covering the hardship faced by service workers in a variety of fields from food service to uber driving. What they do not seem to grasp is that another shoe will drop months from now. White collars jobs are going to get hit in a big way and many will NEVER come back. My own firm with under 50 employees will survive but will definitely be smaller in 2021. I have found out clearly for the first time who the keepers are in my organization. Some of my employees have surprised me and really “risen to the occasion” and performed very well. Others are not cutting it and complaining to me more than ever about minor issues ignoring that I am trying to live to fight another day. When the smoke clears, we will be leaner, much more efficient and I bet more profitable. My clients are telling me similar things and my network of business contacts echos that sentiment as well.”
2) “Has any good come out of this crisis? Yes, and I did not see it coming. There is very little politics now at the firm. Many are happy to be still drawing a paycheck so there is less bitching about who gets plum assignments. Also, with 80% of the team working at home, I don’t have to listen to the prepubescent B.S. about comparative office square footage or nice desks or lamps anymore. When we come back, my tolerance for that old nonsense will not be tolerated.”
3) “I see things much more clearly now. To survive, I am going to have to change the inner workings of my shop. That will be a huge challenge. Why? The late Eugene Kleiner, an early player in venture capital in Silicon Valley, once said, “It’s difficult to see the picture when you’re inside the frame”, which is so true. I used to see my team as a family. A lot has come to the surface the last few months. When the new era begins sometime next year (I hope), I will hand pick my team. Each employee will need to be flexible, humble and a team player.”
4) “ I used to float a major media client a lot of money for several years. One year he was in to us for a million dollars and I paid the media as I knew that he was good for it. He asked me to do it again for later this year. I had to say no. He was hurt but I offered to open my books and I did not have the cash cushion to help him and I was not sure that he would ever be able to pay me back. He went to a media buying service and offered a nice fee but wanted them to pay the media first. The buying firm leader called me and I said have the media bill him directly or do not take the business. He passed on the account as he wondered when he would even get his fee. Long standing deals and relationships are unraveling. I am asking for fees upfront and am not wasting time or money on speculative new business pitches at present.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Monday, June 22, 2020
Advertising Agencies and the Covid 19
This post is in response to the requests of several MR readers regarding the impact of the Covid 19 pandemic on advertising agencies in the United States. As is often the case, I was surprised at the candor of agency principals and management who agreed to weigh in on this very difficult issue.
Before, we go in to specifics, a few caveats:
1) I did not ask anyone from a major holding company ( WPP, Omnicom, Publicis, or Interpublic ) to participate. The people who responded were from independent mid-sized or small shops.
2) Currently, I reside in Towson, Maryland. I deliberately did not call anyone in the Maryland/DC area or local readers would try to figure out who the players were.
3) To further protect sources, I edited their comments partially to avoid repetitive statements, kept real names out of it, sometimes changed genders, and, as a former altar boy, cleaned up a lot of the language when comments were heated.
4) This does not pretend to be a representative sample of the agency universe. I talked to people who trust me and have known me for a long time or who read MR and frequently contact me directly.
Here are some edited verbatims from my sources:
—Fairly large mid-sized company CEO—“this pandemic amazingly has helped me separate the “wheat from the chaff” among my employees. Some people, even the older ones, are doing a great job working remotely. They stay in touch, are on time with everything, and do not need as much hand holding as I expected. Two have told me that they are terrified of being let go so appear to be more conscientious than ever. On the other hand, a few are big disappointments to me. They appear to be spending more time on Netflix and Amazon Prime Video than working. When we return, our company will be smaller as we have lost some business that is not coming back. My lease on office space runs through October and I had a candid talk with my landlord via FaceTime. He will put us in smaller space and understands my situation. I have problems for sure but over the next few years commercial real estate has to be a nightmare.
—Creative Chief, Mid-Sized—“every year I would hire maybe two new creatives fresh from college or art school. This year, only one. The guy says he will stay with us if he can work 100% remotely. It is insane. He is 23! I am a hands on executive. My team has always learned from one another and a coffee in the break room or poking my head in to someone’s office for a minute or two a few times per day helps our product and brings along the rookies. Yes, the kid is tech savvy compared to my two 50+ team members. But, I do not know his work ethic and he needs supervision and how to become a team player.”
—Principal, Small Agency—“I caught two employees doing freelance and late with our client work. The idiots used company e-mail instead of their personal e-mail. I told everyone I would check in daily and sometimes look at all correspondence. They say I cannot stop them from doing freelance. True, but as long as they draw a salary from me, my work comes first and is on time.”
—President, Mid-Sized—“Some people need the structure that an office setting can provide. One of my stars is really struggling at home. He has small kids and loves spending more time with them but his work is weak these days. I have him come in to our empty office two days a week now and it seems to be helping.”
—Principal. Smaller Mid-Sized—“I have a long term employee who has always been a pain in the ass. He managed one of our larger pieces of business and the client loves him. Well, the client told me that she will close her doors by September 1st. I will say adios to the arrogant jerk at that time. His protector will be gone."
"What some of my staffers do not seem to grasp is that we are in a small city. I will have to lay off several staffers and job opportunities will be VERY scarce. Everyone needs to excel right now.”
—Independent, Successful Graphic Designer—“Some people, not I, have terrible issues with child care right now. Trying to juggle little kids and getting assignments done is hard these days. Also, some people are not emotionally equipped to work solo as I am. CEO’s need to understand this. I have been getting extra business during the pandemic as freelance is my game and my turnaround time is very good. Everyone is not able to do it.”
Everyone is nervous about the long haul picture. Not a single person said that things will ever be “normal” pre-March 2020 again. To a person, all said that the pandemic has sped up the decline of conventional media significantly.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
Before, we go in to specifics, a few caveats:
1) I did not ask anyone from a major holding company ( WPP, Omnicom, Publicis, or Interpublic ) to participate. The people who responded were from independent mid-sized or small shops.
2) Currently, I reside in Towson, Maryland. I deliberately did not call anyone in the Maryland/DC area or local readers would try to figure out who the players were.
3) To further protect sources, I edited their comments partially to avoid repetitive statements, kept real names out of it, sometimes changed genders, and, as a former altar boy, cleaned up a lot of the language when comments were heated.
4) This does not pretend to be a representative sample of the agency universe. I talked to people who trust me and have known me for a long time or who read MR and frequently contact me directly.
Here are some edited verbatims from my sources:
—Fairly large mid-sized company CEO—“this pandemic amazingly has helped me separate the “wheat from the chaff” among my employees. Some people, even the older ones, are doing a great job working remotely. They stay in touch, are on time with everything, and do not need as much hand holding as I expected. Two have told me that they are terrified of being let go so appear to be more conscientious than ever. On the other hand, a few are big disappointments to me. They appear to be spending more time on Netflix and Amazon Prime Video than working. When we return, our company will be smaller as we have lost some business that is not coming back. My lease on office space runs through October and I had a candid talk with my landlord via FaceTime. He will put us in smaller space and understands my situation. I have problems for sure but over the next few years commercial real estate has to be a nightmare.
—Creative Chief, Mid-Sized—“every year I would hire maybe two new creatives fresh from college or art school. This year, only one. The guy says he will stay with us if he can work 100% remotely. It is insane. He is 23! I am a hands on executive. My team has always learned from one another and a coffee in the break room or poking my head in to someone’s office for a minute or two a few times per day helps our product and brings along the rookies. Yes, the kid is tech savvy compared to my two 50+ team members. But, I do not know his work ethic and he needs supervision and how to become a team player.”
—Principal, Small Agency—“I caught two employees doing freelance and late with our client work. The idiots used company e-mail instead of their personal e-mail. I told everyone I would check in daily and sometimes look at all correspondence. They say I cannot stop them from doing freelance. True, but as long as they draw a salary from me, my work comes first and is on time.”
—President, Mid-Sized—“Some people need the structure that an office setting can provide. One of my stars is really struggling at home. He has small kids and loves spending more time with them but his work is weak these days. I have him come in to our empty office two days a week now and it seems to be helping.”
—Principal. Smaller Mid-Sized—“I have a long term employee who has always been a pain in the ass. He managed one of our larger pieces of business and the client loves him. Well, the client told me that she will close her doors by September 1st. I will say adios to the arrogant jerk at that time. His protector will be gone."
"What some of my staffers do not seem to grasp is that we are in a small city. I will have to lay off several staffers and job opportunities will be VERY scarce. Everyone needs to excel right now.”
—Independent, Successful Graphic Designer—“Some people, not I, have terrible issues with child care right now. Trying to juggle little kids and getting assignments done is hard these days. Also, some people are not emotionally equipped to work solo as I am. CEO’s need to understand this. I have been getting extra business during the pandemic as freelance is my game and my turnaround time is very good. Everyone is not able to do it.”
Everyone is nervous about the long haul picture. Not a single person said that things will ever be “normal” pre-March 2020 again. To a person, all said that the pandemic has sped up the decline of conventional media significantly.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.
Tuesday, June 9, 2020
1% Television
Surprisingly, in recent months, several people have asked me to comment on what they are calling 1% Television. Most of them were academics although a few are happily ensconced in the private sector in advertising or broadcasting. The term is not used particularly widely in lieu of what I and others in the game for years referred to as “Aspirational Television.” It is programming where the protagonists tend to be in the top 1% of wealth or income and often live life on their terms sometimes operating on the edge of the law or societal norms.
The people often asked me why these shows are popular when most Americans (especially during the Covid 19 pandemic) are struggling. They speak of “Billions”, “Empire”, and “Succession” as examples of such programming. To me, this is all more than a bit of a surprise. They act as if it is something new. If you are 30 or under, I can give you a pass. Those of us longer in the tooth have to remember “Dallas”, “Falcon Crest”, and “Dynasty” where the wealthy cavorted illegally or in dodgy transactions via Primetime soap operas that delivered killer Nielsen ratings. Today’s shows, on HBO or Netflix or Amazon Prime Video are far racier given the times but are similar in many ways.
Want to go back farther and have a look? In the 1930’s at the bottom of the Great Depression, Hollywood studios, particularly MGM and Paramount ,were grinding out countless films that depicted life among the uber-wealthy—perhaps .1% of the population. And the films were very popular. I remember asking my father about why people enjoyed them so much. He said that times were really tough for so many Americans that watching a screwball comedy or elegant drama or Thin Man Mystery let one escape from their precarious existence if only for two hours. Smoothies such as Robert Montgomery, Brian Aherne, and, of course, Cary Grant, were on hand in many such films and, if you could not truly aspire to that lifestyle, you could at least dream about it.
So, not much has changed. People want to escape their hum-drum lives and 1% Television can do it and often the programs are very entertaining. There is one area that is lumped with 1% Television by some that I feel is very misplaced. That is programming often shown on PBS. The most famous was “Downton Abbey” which featured the aristocratic Crawley family in the 2nd and 3rd decades of the 20th century. Critics raved when the final episode drew 9.6 million viewers. That was indeed super for PBS but the audience was not not as blue chip as some wanted you to believe. The audience skewed older and certainly intellectually leaning as most PBS “Masterpiece” telecasts do. Yet it did not wildly overachieve against the real 1%, especially the younger upscales. To put it in perspective, “Empire’s” premiere back in 2016 averaged 12.2 viewers and “Billions” premiere scored 6.6 million before hitting its stride as word spread of the exploits of the central character Bobby Axelrod.
Yes, there have been exceptions. “Roseanne” gave a look at blue collar life in the 1990’s and other sitcoms have followed suit but most, while claiming “everyman” or middle class status, are really upper middle class or top 10%. Do most people want a steady diet of “inequality entertainment”? I do not think so. Americans, especially now, get enough reality in their daily lives. Streaming video provides a much appreciated escape these days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The people often asked me why these shows are popular when most Americans (especially during the Covid 19 pandemic) are struggling. They speak of “Billions”, “Empire”, and “Succession” as examples of such programming. To me, this is all more than a bit of a surprise. They act as if it is something new. If you are 30 or under, I can give you a pass. Those of us longer in the tooth have to remember “Dallas”, “Falcon Crest”, and “Dynasty” where the wealthy cavorted illegally or in dodgy transactions via Primetime soap operas that delivered killer Nielsen ratings. Today’s shows, on HBO or Netflix or Amazon Prime Video are far racier given the times but are similar in many ways.
Want to go back farther and have a look? In the 1930’s at the bottom of the Great Depression, Hollywood studios, particularly MGM and Paramount ,were grinding out countless films that depicted life among the uber-wealthy—perhaps .1% of the population. And the films were very popular. I remember asking my father about why people enjoyed them so much. He said that times were really tough for so many Americans that watching a screwball comedy or elegant drama or Thin Man Mystery let one escape from their precarious existence if only for two hours. Smoothies such as Robert Montgomery, Brian Aherne, and, of course, Cary Grant, were on hand in many such films and, if you could not truly aspire to that lifestyle, you could at least dream about it.
So, not much has changed. People want to escape their hum-drum lives and 1% Television can do it and often the programs are very entertaining. There is one area that is lumped with 1% Television by some that I feel is very misplaced. That is programming often shown on PBS. The most famous was “Downton Abbey” which featured the aristocratic Crawley family in the 2nd and 3rd decades of the 20th century. Critics raved when the final episode drew 9.6 million viewers. That was indeed super for PBS but the audience was not not as blue chip as some wanted you to believe. The audience skewed older and certainly intellectually leaning as most PBS “Masterpiece” telecasts do. Yet it did not wildly overachieve against the real 1%, especially the younger upscales. To put it in perspective, “Empire’s” premiere back in 2016 averaged 12.2 viewers and “Billions” premiere scored 6.6 million before hitting its stride as word spread of the exploits of the central character Bobby Axelrod.
Yes, there have been exceptions. “Roseanne” gave a look at blue collar life in the 1990’s and other sitcoms have followed suit but most, while claiming “everyman” or middle class status, are really upper middle class or top 10%. Do most people want a steady diet of “inequality entertainment”? I do not think so. Americans, especially now, get enough reality in their daily lives. Streaming video provides a much appreciated escape these days.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, May 30, 2020
One Challenge Too Many
For a few decades, I have seen data on the death rate of restaurants. A study from The Ohio State University, released in 2019, mirrored the results that I have observed forever. In brief, they found that 60% of restaurants failed in the first year and 80% did not stay open long enough to celebrate their fifth anniversary. Reasons are many but big ones include the owners chasing a dream but not having enough experience in the field and not realizing how hard the job of running a profitable restaurant can be. Also, financial issues dominate led by poor cash flow management.
Today, as the shutdowns of businesses continue due to the Covid 19 pandemic, it appears that many restaurant owners consider this horrible event to be one challenge too many. They have survived previous recessions, blizzards, hurricanes, change in consumer tastes but many much loved dining establishments are closing for good. A restauranteur in the midwest put it to me this way: “Mr. Cole, we tried to do curbside for a few weeks. It went okay, I suppose, but, even with a skeleton staff, we are losing money. Few people are ordering alcohol and that is where are big margins always were. No one wants to hear about my spectacular wine pairings these days when we put a to-go dinner in their trunk. I am 62 and my wife and I are tired. It is time to go.” Another in the Northeast wrote that most restaurants operate on the edge and, even if you last a while, you are often not super profitable. “Why work 12 hours a day when you will be in a deep hole for at least 18-24 months. My landlord is a decent sort but I have to start paying him soon.”
Others have hinted plus the media has covered that with 25-50% capacity allowed as states “open up” their economies, most restaurants can not make money. Others fear that many regulars (the mainstay of successful independent restaurants) will stay away out of fear of the virus. So, the outlook, always a challenge, is now scary.
Some financial analysts have hit the issue from another angle. There are some very high end restaurants that cater to the wealthy. They have what analysts might call “fortress balance sheets.” They can ride out this unpleasantness not forever but for a long time. The individual restaurants that are unique and perhaps small but part of our lives are really under siege. So some pundits say our choices in dining out in about two years will be the high end who will be a bit bruised but resilient and chain restaurants which have stronger investor backing. Also, it will be harder for dreamers to get funding for a new restaurant as Angel investors will be more gun shy than ever when it comes to funding a dining establishment.
Casualties may also be in places that are not top of mind. The small lunch counters in the backroads of rural America may not reopen. Many faced closure when the talk of a $15 minimum wage was floated a couple of years ago. If such a plan takes hold or something close to it, the little guys in small towns will likely not survive in most cases.
So, there is one thing that we all can do. Each week since the lockdown my family and I have picked a couple of local places that we have always liked. We get a lunch or dinner from them and will continue it for some time to come. These restauranteurs have brightened our lives and survived while most have not. As they face their greatest challenge ever, they deserve our business. So support your favorite local restaurants. If you help them get through this once in a lifetime event, they just may be around when some sense of normality returns.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Today, as the shutdowns of businesses continue due to the Covid 19 pandemic, it appears that many restaurant owners consider this horrible event to be one challenge too many. They have survived previous recessions, blizzards, hurricanes, change in consumer tastes but many much loved dining establishments are closing for good. A restauranteur in the midwest put it to me this way: “Mr. Cole, we tried to do curbside for a few weeks. It went okay, I suppose, but, even with a skeleton staff, we are losing money. Few people are ordering alcohol and that is where are big margins always were. No one wants to hear about my spectacular wine pairings these days when we put a to-go dinner in their trunk. I am 62 and my wife and I are tired. It is time to go.” Another in the Northeast wrote that most restaurants operate on the edge and, even if you last a while, you are often not super profitable. “Why work 12 hours a day when you will be in a deep hole for at least 18-24 months. My landlord is a decent sort but I have to start paying him soon.”
Others have hinted plus the media has covered that with 25-50% capacity allowed as states “open up” their economies, most restaurants can not make money. Others fear that many regulars (the mainstay of successful independent restaurants) will stay away out of fear of the virus. So, the outlook, always a challenge, is now scary.
Some financial analysts have hit the issue from another angle. There are some very high end restaurants that cater to the wealthy. They have what analysts might call “fortress balance sheets.” They can ride out this unpleasantness not forever but for a long time. The individual restaurants that are unique and perhaps small but part of our lives are really under siege. So some pundits say our choices in dining out in about two years will be the high end who will be a bit bruised but resilient and chain restaurants which have stronger investor backing. Also, it will be harder for dreamers to get funding for a new restaurant as Angel investors will be more gun shy than ever when it comes to funding a dining establishment.
Casualties may also be in places that are not top of mind. The small lunch counters in the backroads of rural America may not reopen. Many faced closure when the talk of a $15 minimum wage was floated a couple of years ago. If such a plan takes hold or something close to it, the little guys in small towns will likely not survive in most cases.
So, there is one thing that we all can do. Each week since the lockdown my family and I have picked a couple of local places that we have always liked. We get a lunch or dinner from them and will continue it for some time to come. These restauranteurs have brightened our lives and survived while most have not. As they face their greatest challenge ever, they deserve our business. So support your favorite local restaurants. If you help them get through this once in a lifetime event, they just may be around when some sense of normality returns.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, May 26, 2020
Greedy Landlords?
I hate to admit it but 50 years ago this week I was introduced to economics by reading a little book by Henry Hazlitt entitled ECONOMICS IN ONE LESSON. It set me back 75 cents! The paperback changed my life as I shifted from being a history major to an Economics major and I have never looked back. While Hazlitt, a journalist who is widely respected in libertarian and conservative circles was prolific (he lived to be 98), his little book had a different message. Simply put, the one lesson was that most people think only of the immediate effect of government policy actions in the economy and few, especially politicians, think of how their actions effect the long term. The erudite Thomas Sowell of Amherst and Stanford fame, expanded on the argument in a brilliant but much heavier book entitled APPLIED ECONOMICS. I recommend both highly.
Okay, what does that have to do with our title of greedy landlords? A lot. Our friends in the media continue to do slice of life stories about people suffering horrible economic conditions due to the pandemic. Some are heart wrenching and the stories need to remain front and center to the national dialogue during an election year. To their great credit only CNBC, our leading business cable channel, has effectively expressed how small time real estate operators better known as landlords are also in a terrible bind.
When one hears the term landlord most people conjure up the presence of an older person who is very affluent or wealthy with dozens or hundreds of rental homes or apartments. While they exist and most are fair sized corporations, several million landlords are basically what I would describe as bootstrap entrepreneurs. They may live in a duplex and rent out the upstairs to a tenant who helps them pay for their home. Or, they may have a small apartment building with six to 10 rental units. Almost all are leveraged unless they have held the properties for 15-20 years. So, what is happening to these greedy millionaires? Many are in a spot not dissimilar to many of their tenants. If you have a 10 unit apartment building, you easily may have a million dollar mortgage on it depending on its location.
If your tenants, who have been legally excused from paying rent for a few months, do not pay as many are out of work, you still owe the bank the mortgage payment.
A small player in central California who has read MR for years put it to me this way: “Don, for the moment, I am really lucky. I have 10 tenants. Two are in small bungalows and eight are in my apartment building. Only two have not paid rent the last two months. One honest young woman came to my office and paid her May rent saying that with her $600 weekly bonus in federal unemployment pay, she is more flush than when she is working. She could have not paid for a while but has earned my everlasting respect. Many times, I have vacancies and repainted or repair a place after a tenant leaves so missing two payments for a few months will not kill me. Yet, I still to have pay my real estate taxes at the end of June and, so far, our county has not offered any delay in payment. I have been doing this for 30 years so I know dozens of small real estate players across the state. I even mentor some of the young ones. They are really in a bind. One wonderful 35 year old immigrant has eight properties. All of her tenants have lost their jobs and no one is paying her. She does not have the kind of relationship that I have with my community bank and is getting hassled. She is a complete wreck even though she is the hardest working and most resourceful person that I have ever met.”
There is another shoe to drop as time goes on. Let us say the country opens up and many of these tenants get their old jobs back. Remember, a few years back when the Federal Reserve published the now famous report that more than 40% of American households could not readily pay for a $400 auto repair bill or an emergency room visit? The Fed was telling us that a huge minority of Americans were living on the edge. They were a paycheck or two from being close to homeless. So, assume many of the renters get their jobs back after a four month hiatus from paying rent. They still owe the rent and the landlords still owe the bank for their mortgages and the counties for their real estate taxes. If people were fighting to pay their rent PRIOR to the pandemic, how will they be able to come up with the money to pay the back rent. Most landlords will stretch out the payments to be sure but if you were living hand to mouth before the crisis, can you afford an extra $150-200 per month in rent once work resumes. Am I exaggerating? Well, Fed chair Jay Powell rattled markets a few weeks ago when he stated that 40% of persons earning less than $40,000 per year were currently unemployed. A few will take their extra unemployment compensation and $1200 recovery checks and be very disciplined about using it. Many, not used to such a cash infusion, will likely not plan properly for a “return to normalcy.”
So, I did not post this to defend landlords. I am not one and have never been one. My point is that the media, with few exceptions, have done a poor job to date, of really examining the ripple effect that the pandemic is having on many people whom you may think are sitting pretty.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Okay, what does that have to do with our title of greedy landlords? A lot. Our friends in the media continue to do slice of life stories about people suffering horrible economic conditions due to the pandemic. Some are heart wrenching and the stories need to remain front and center to the national dialogue during an election year. To their great credit only CNBC, our leading business cable channel, has effectively expressed how small time real estate operators better known as landlords are also in a terrible bind.
When one hears the term landlord most people conjure up the presence of an older person who is very affluent or wealthy with dozens or hundreds of rental homes or apartments. While they exist and most are fair sized corporations, several million landlords are basically what I would describe as bootstrap entrepreneurs. They may live in a duplex and rent out the upstairs to a tenant who helps them pay for their home. Or, they may have a small apartment building with six to 10 rental units. Almost all are leveraged unless they have held the properties for 15-20 years. So, what is happening to these greedy millionaires? Many are in a spot not dissimilar to many of their tenants. If you have a 10 unit apartment building, you easily may have a million dollar mortgage on it depending on its location.
If your tenants, who have been legally excused from paying rent for a few months, do not pay as many are out of work, you still owe the bank the mortgage payment.
A small player in central California who has read MR for years put it to me this way: “Don, for the moment, I am really lucky. I have 10 tenants. Two are in small bungalows and eight are in my apartment building. Only two have not paid rent the last two months. One honest young woman came to my office and paid her May rent saying that with her $600 weekly bonus in federal unemployment pay, she is more flush than when she is working. She could have not paid for a while but has earned my everlasting respect. Many times, I have vacancies and repainted or repair a place after a tenant leaves so missing two payments for a few months will not kill me. Yet, I still to have pay my real estate taxes at the end of June and, so far, our county has not offered any delay in payment. I have been doing this for 30 years so I know dozens of small real estate players across the state. I even mentor some of the young ones. They are really in a bind. One wonderful 35 year old immigrant has eight properties. All of her tenants have lost their jobs and no one is paying her. She does not have the kind of relationship that I have with my community bank and is getting hassled. She is a complete wreck even though she is the hardest working and most resourceful person that I have ever met.”
There is another shoe to drop as time goes on. Let us say the country opens up and many of these tenants get their old jobs back. Remember, a few years back when the Federal Reserve published the now famous report that more than 40% of American households could not readily pay for a $400 auto repair bill or an emergency room visit? The Fed was telling us that a huge minority of Americans were living on the edge. They were a paycheck or two from being close to homeless. So, assume many of the renters get their jobs back after a four month hiatus from paying rent. They still owe the rent and the landlords still owe the bank for their mortgages and the counties for their real estate taxes. If people were fighting to pay their rent PRIOR to the pandemic, how will they be able to come up with the money to pay the back rent. Most landlords will stretch out the payments to be sure but if you were living hand to mouth before the crisis, can you afford an extra $150-200 per month in rent once work resumes. Am I exaggerating? Well, Fed chair Jay Powell rattled markets a few weeks ago when he stated that 40% of persons earning less than $40,000 per year were currently unemployed. A few will take their extra unemployment compensation and $1200 recovery checks and be very disciplined about using it. Many, not used to such a cash infusion, will likely not plan properly for a “return to normalcy.”
So, I did not post this to defend landlords. I am not one and have never been one. My point is that the media, with few exceptions, have done a poor job to date, of really examining the ripple effect that the pandemic is having on many people whom you may think are sitting pretty.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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