Brews & Biz: Chicago entrepreneurs talk recession, City Hall and the road ahead

To close out the 2009 season of Entrepreneurs in Action, the video series I produce at Crain’s Chicago Business, I wanted to get a group of entrepreneurs together to talk about running a business in Chicago. And so it happened that we amassed four Chicago entrepreneurs at Half Acre Beer Co, my cavernous neighborhood brewery .

We sat the group in tall chairs, poured them some suds and talked entrepreneurship. The result, I think: a smart, honest, spirited discussion among four guys battling to build their businesses in the face of recession, bureaucracy and the normal, impossible odds facing every entrepreneur. Please check it out. If you’re an entrepreneur, want to be or are just interested in small business, I’m pretty sure you’ll find it worth your 20 minutes.

Special thanks to Ed Scanlan of Total Attorneys, Eric Fosse of Homemade Pizza and Darren Guccione of Callpod for participating. And a big shout-out to Gabriel Magliaro of Half Acre, who not only played along but let us take over his brewhouse for an afternoon. Also, my crew was fantastic: Steve Serio, Jeff Hartvigsen, Erik Unger and Lisa Jacobson nailed the shoot. And as always, Dustin Park, our editor, the Yo-Yo Ma of Final Cut.

[Note: I've had a lot of good feedback on this. But I've also heard several complaints that go: Here's five white guys talking about doing business in a diverse city with an increasingly less-white-guy-centric business community. It's a completely fair criticism. One of my goals in 2010 is to bring more diversity to our EiA subjects. Count on it. This year I profiled two women: Zoe Damacela and Lindsay Gaskins of Marbles. Neither of them fit the bill for this roundtable--Zoe's too young and green and Lindsay doesn't own her business. But if we assemble another roundtable in 2010, look for a little less vanilla.]

Comcastic journalism

The Chicago Tribune takes on Comcast today in its ‘What’s Your Problem’ column. My problem is this pathetic attempt at journalism. The column’s author (who normally does a decent job) gets rolled by the cable company, spitting out a story about how hard it is to be a Comcast customer service agent, how much training these people get and how they’re really very decent, hard-working folks — they are “your mother, your sister, your family.”

No shit. We all know the operators we deal with at Comcast and other big companies aren’t the problem. It’s not their fault their employers provide lousy service, charge too much, screw up our bills, deploy incompetent technicians and generally leave us feeling frustrated, outraged and impotent.

And  yet the Trib’s Jon Yates sits in on a training session at a local Comcast call center and learns that customer reps are taught to be, above all, empathetic. He is overwhelmed by Comcast’s show of humanity — its employees learn to put themselves in their customers’ shoes, and to coo “I understand,” “That does sound frustrating,” and “I do apologize for that.” (The Trib’s video is even more maddening; we see a customer rep being taught to say “I see” instead of “Ok.” This is apparently the difference between good and bad service at Comcast.)

What Yates should’ve realized is that the emphasis on empathy is part of the problem. Comcast would rather apologize for its mistakes than invest in preventing them.

At least, that’s my guess. If a reporter wanted to really dig in to Comcast’s customer service problems, he wouldn’t just take the PR flack’s invite to visit the customer service center, then write about what he saw. He’d investigate the link between customer service and profit. Good customer service is expensive. Investing in network improvements, training techs and operators, responding quickly and effectively — these things cost a lot of money. It’s much cheaper to just teach people to say sorry or to open a Twitter account.

In other words, Comcast probably chooses to have shitty customer service. I bet there is a calculated corporate analysis that tells company brass what level of service they can get away with, taking in to account the high cost of better service, the limited competition and the relative shittiness of its competitors’ service.

Last year, amidst a raging recession, Comcast pulled down $2.5 billion in profit. Think about that the next time you’re on hold for 15 minutes waiting to get the cable back on so you can watch the ballgame you’ve been waiting for all week. Comcast could cut that hold time by hiring more operators. Or by better-training the ones it has, or by improving its network so your cable didn’t go out in the first place.

But that would eat in to the $2.5 bil. I suspect the higher-ups at Comcast know that. A good reporter could prove it.

Update: Zoe’s killing it

Two months and two posts ago, I introduced 17-year-old entrepreneur and fashion phenom Zoe Damacela. Since then Zoe has won $5,000 in a national business plan competition, met the President and scored a mentorship with Chicago’s top fashion designer, Maria Pinto. I wrote a full breakdown over at Enterprise City.

Sounds like the visit to the Oval Office was the highlight of all this, and why not. Zoe goes to the same high school that Michelle Obama attended, which the President apparently seized on during Zoe’s 10-minute visit, chatting the Whitney Young senior up about the football team and her plans for college. (She hopes to go either to Harvard or Northwestern; I’ve advised her that either of those would probably be fine.)

Back in Chicago, the folks at NFTE are angling to get Zoe on the Oprah show.

As a journalist, I probably shouldn’t say this, but the hell with it: I’m really happy for Zoe. There aren’t a lot of good things happening to people right now. I hope she sets the damn world on fire. We all know who holds the torch.

 

High Plans Duster

more about “High Plans Duster“, posted with vodpod

Wonderful WSJ piece about the partially sane pilots who fly cropdusters, set in my homeland of southwest Kansas. Cropdusters are a pretty common sight out there in the wide-open plains where there’s little to interfere with their aerial acrobatics. My dad, who had been a pilot himself, used to pull over to the shoulder so we could watch them work — diving and banking, pulling up steep to miss the power lines and then coming back so low you felt like you could jump up and grab a wing as they zipped by. One of the local dusters had flown fighter jets in Vietnam. I remember that, like the guy in this video, he had complete disdain for amateur pilots. He used to call those little twin engine Cessnas “doctor killers.”

On top of all the memories it’s revived, the piece has some great visuals. The shot at 1:30 of a sunset gets me all misty-eyed. There’s nothing much to see in that country, but sometimes nothing much can be really beautiful. I miss it.

If you like the video, the story is even better. Give it a read.

Zoe

We all know that starting a business can make you rich. Or famous. And you probably are aware that entrepreneurs are the fuel that makes our economy run. Startups account for 3% employment growth each year, almost double the average overall rate of 1.8% — meaning that new businesses are creating jobs while big companies eliminate them. Entrepreneurs drive most of the innovation in our lives too: from the airplane to Google, just about any invention you can think of came from an individual or small team working alone, not from some corporate lab where the only ideas come from focus groups.

But beyond it’s economic and social power, entrepreneurship can also be a force for personal growth. Building a business requires creativity and ambition, balanced with discipline and persistence. It takes courage and it takes hard work. (Of course, there’s a dark side.)

I was reminded of all this a few months ago when I helped judge the finals of the Network for Teaching Entrepreneurship’s citywide business plan competition. When I agreed to do it, on the request of a good friend, Clint Coghill, I had no idea what I’d signed up for. The other judges were Chicago business heavyweights like Larry Levy and Joe Mansueto. And the kids — wow.

We saw six business plans, all written by Chicago high school students from the 35 public schools that offer an entrepreneurship class using the NFTE curriculum. Every plan described a product, a market and the economics of their business. The kids presented their idea, projected their return on investment and detailed their strategy for marketing, distribution and sales.

NFTE’s 2009 Business Plan Finals: contestants and judges

All the judges were blown away by each kid’s poise, eloquence and ambition. The winner, Zoe Damacela, stood out in large part because she’d already started her business. She took the $2,000 prize and inspired me to tell her story in an Entrepreneurs in Action video. It’s a story about how entrepreneurship can give a creative, hard-working kid something to latch on to.

Zoe’s an inspiration. Ten years ago she and her mother, Farah, were living in relatives’ basements and Section 8 housing in California. Now Farah has a college degree and a good job at a nonprofit; she just bought a condo in the West Loop. And Zoe is running a fashion business that could gross $30,000 this year. She’s planning on college (at the School of the Art Institute, she hopes). As Larry Levy told me after he saw the video, she’s “a girl we should all keep our eyes on.”

Here’s the video:

Zoe Damacela: Young entrepreneur

Wilco loves you baby

I’m not ready to pass judgment on the new Wilco record – have owned it just three days and have listened only twice front to back. I think I like it but you have to let it soak in.

However, I am ready to declare the song ‘You never know’ to be one helluva a great fucking rock song. It’s had my toes tapping all day today.

Interesting note: ‘Wilco (the album)’ comes with song lyrics in the liner notes. A first for them, I think. I always like that. Here’s the (mostly accurate) words to ‘YNK.’

And here’s the band laying it down in L.A. (tried to find vid from Conan, where they played ‘YNK’ in Nudie suits and sounded fantastic, but alas I think it’s gone).

We called it.

Back in 2001, my good friend Stephane Fitch and I spent two months working on a story about a looming housing crash. We talked to every housing and consumer-finance expert we could find, plus dozens of realtors and hundreds of homeowners, probing for signs of weakness in home sales or prices, trying to understand whether the market would or could go bust and asking what would happen to the US economy if it did.

The resulting story ran as Forbes‘ Sept. 3, 2001 cover, under the ominous headline ‘What if home prices crashed?’ On the cover: a couple from Northern California I’d found during the three weeks I spent cruising Silicon Valley, talking to home sellers who’d cut their prices (To get a list of people who cut price, I talked a realtor into running a filter on the MLS. I got about 2oo names, and called them. All of them.).

Yesterday, I learned that our story had been named to Columbia Journalism Review’s ‘List’ of 727 significant business stories published in the run-up to the economic crisis. This may not sound like an exclusive list, but as the author, Dean Starkman, notes, “the business press produced more than a half a million news items during this period.” Only 700-some of those items presaged the coming catastrophe.

Starkman’s “List” also awards our story “first-place in (the) bubble-calling contest.”

So good on us. We busted our humps reporting the story and the writing of it nearly destroyed our friendship (it may have if not for the velvet interventions of our editor, Tom Post). And as Starkman notes, we called it. We were about six years early, but when we wrote about “an ominous mix of overdevelopment, inflated home prices and rising consumer debt,” we had identified most of the ingredients in the Molotov cocktail that has since been heaved at the American economy.

We didn’t write about the massive overextension of the mortgage-backed securities market. But we did report the stress cracks that would eventually destroy that market, and the global finance system: a huge increase of mortgate debt vs. household income, and a steady decline of equity as a percentage of home value. I remember talking to a couple of rogue banking analysts who were convinced that the mortgage/credit market was a house of cards. One of them, Charles Peabody, is quoted in the story. Knowing what we know now, his statement is flat-out chilling: “Leverage against an asset that can deflate in value is a recipe for disaster.” Indeed.

One final memory of that story. On the spread inside the magazine was a wonderful illustration of a house that had crashed down to earth, crushing a girl in ruby slippers. Seeing that, I wrote the headline ‘Goodbye Yellow-Brick Road.’ Forbes‘ editor, Bill Baldwin, overrode that in favor of the more literal ‘What if Housing Crashed?’ Mine was better.

A summer night’s dream

Photo credit: Dennis Kleiman

There’s nothing better than a summer night. Nothing. The best time of day, the best time of year. On a summer night, life moves at just the right pace – the pace of baseball on the radio, where time is measured not by a clock but by the progress of events themselves. Difficult conversations become philosophical in the dark of a summer night. If you’ve been given the gift of reverie, a summer night is the perfect time to sit alone, outside, let your thoughts waft up like the heat off your grill, lingering or drifting off as you please.

A summer night is universal. Where I live, it’s especially precious – survive a Chicago winter and you’ll treasure every one of those nights when work is done and the kids are in bed and there’s still a few hours to sit outside with a drink. And even where summer is year-round – in Florida and Arizona and other sweltering places where retirees go to decompose – the night brings relief, provides a few tolerable moments, lets you breathe.

Out on the high plains where I grew up, the wind was our nemesis, roaring from the frigid north all winter then turning around to torment us from the blast-furnace south through summer. But when night fell, even the wind could relax. It would settle down to a breeze, letting the dust fall to earth and letting us sit outside in peace. In the city, evenings are less peaceful – El trains clatter by, sirens wail, air-conditioners hum. On a summer night there’s a general quiet that makes those noises seem isolated, intermittent, and more tolerable.

So when I say that Neko Case’s ‘Middle Cyclone’ is like a summer night, you’ll know I’m paying her my highest compliment. The record sounds like a summer night, with its echos and reverb and the hint of wind chimes and nocturnal creatures chirping in the background. And it feels like a summer night (note: the fact that it has a feel makes it an achievement), thanks to Neko’s songwriting, which eschews the verse-chorus-verse approach to instead let the lyrics go where they will, the better to unwind her noirish parables and shrouded confessionals. Listening to ‘Middle Cyclone’ is like having a free-flowing conversation with someone really interesting, someone who can tell a riveting story, even if you’re not sure what it’s about.

And lest you think I cooked up this whole summer-night theme just so I could wax on about it, Neko makes it explicit. Let this be a warning says the magpie to the morning: ‘Don’t let this fading summer pass you by,’ she sings in the gorgeous ‘Magpie to the Morning.’ And at the end of the record she tacked on thirty-plus minutes of nature sounds from outside the Vermont barn where ‘Middle Cyclone’ was recorded. Frogs, crickets, cicadas – whatever, all making their rhythmic music. It’s beautiful: the sound of a summer night.

‘Middle Cyclone’ is not a perfect record, but I’d say at least nine of the 14 songs (not counting the half-hour chirping) are really great. I wouldn’t be surprised if several of the other five grew on me – great albums always reveal themselves over time. And I plan to give ‘Middle Cyclone’ time. There’s a whole summer ahead, and a lot of summer nights to kill.

Boastful bore

After my girls were born, I resolved that I would never again brag about anything except them.

Who was I kidding? I’m way too insecure to just sit back the rest of my life and let everybody figure out for themselves how smart or cool I am.

Still, what I’m about to do is gratuitous. This is a full-on boast.

Crain’s this week won a slew of awards from the Society of American Business Editors and Writers – that powerhouse organization, so revered among its legions of members, so feared on Capitol Hill. Five of those went to our website, including first place in overall excellence for sites our size (half a million monthly page views and smaller). I’m proud of all our team, particularly Online editor Mike McHugh, Multimedia Producer Jeff Hartvigsen and General Manager Terry Gallaher.

I’m also very proud that Entrepeneurs in Action, the monthly video I’ve been producing since August, won best audio/visual report for small/midsize websites. I share the credit with former Assistant Managing Editor Tom Mucha (now Managing Editor at GlobalPost), who produced the first seven episodes last year, and Mark Scheffler, the videographer and editor on all the 2008 pieces. In the judges comments, they singled out two episodes published in 2009. Those were shot by Crain’s staff photographer Steve Serio and edited by our video whiz kid, Dustin Park.

Here’s what the judges said:

“Entrepreneurs in Action” does a superb job of finding interesting startup companies in the Chicago area and bringing them to life on screen. The producers show us the reality of the startup life via revealing, in-depth interviews with their entrepreneur subjects. Impressively, they also find fresh angles on big stories such as the future of the news business (“Big ideas, small profits”) and the changing nature of intellectual property (“Callpod: Running with the big dogs”).

This is really gratifying. Since taking over EiA I’ve fallen in love with the damn thing. It allows me to indulge my fascination with entrepreneurs and to continue honing my storytelling chops in a new medium — which I’m only beginning to understand. My hope is that the series will only get better.

Then I’ll really have something to brag about.

(By the way, you can also catch EiA on Comcast Digital Cable. Go to Channel 1 or hit the On Demand button, then select Get Local, then Crain’s Chicago Business. There it is.)

‘A coat, a hat and a gun’

Fifty years ago today, Raymond Chandler died. We’ve yet to get over it. By we, I mean those of us who love detective novels, film noir and other forms of that distinctly American genre: the hard-boiled arts. Chandler took what had been a trade — writing pulp fiction for cheap magazines — and turned it into an art form. He’s been followed by (probably) thousands of imitators. Nobody comes close. Nobody. Not Dennis Lehane, not Ross McDonald, not Robert B. Parker. Those guys are considered fine mystery writers. But try reading a Chandler novel, then reading one of theirs. Kinda like reading A Light in August followed by The Bridges of Madison County.

That analogy is no joke. Chandler created great literature. A master stylist, he wrote with spare, disciplined prose, a relentlessly tough (and also distinctly American) sensibility and a wit as sharp as the creases in Marlowe’s hat. Consider this, from ‘Farewell, My Lovely:’

I needed a drink, I needed a lot of life insurance, I needed a vacation, I needed a home in the country. What I had was a coat, a hat and a gun.

Chandler did a lot of other things well too. He created a crusading hero, Philip Marlowe, who never got political or preachy — an archetype that’s still being copied, poorly. He turned a city, pre-war Los Angeles, into a recurring character — as tough, corrupt and beautiful as one of Marlowe’s treacherous blondes. He loved the city the way Nelson Algren loved Chicago – not in spite of its naked brutality, but because of it.

Chandler once said of the style of writing he honed in the pulps: “When in doubt, have a man walk through the door with a gun in his hand.” He was half-joking of course, but that’s still great advice for a writer.

Of course most of us don’t have Raymond Chandler’s gift for creating something beautiful out of worlds where men burst in waving guns. In fact, none of us do.

So anyway, here’s 10 Things to Read on the 50th Anniversary of Raymond Chandler’s Death.

Better yet, just read some Chandler. I’ll lend you some of mine – but you have to bring it back.