What entrepreneurs wish they had done in 2023
Their big mistake on pricing, plus whose advice they should ignore this year
You’re reading the My News Biz newsletter. My goal is to help digital media entrepreneurs find viable business models.
This was a first for me at My News Biz. I invited all 1,100 free and paid subscribers to a live Zoom session Jan. 2 on the topic of “What it takes for you to thrive in 2024”.
And I invited a friend, Loren Feldman, who is an expert on entrepreneurs and small business, to answer our questions.
In the course of a 40-minute chat, Loren and other participants — two of them from Nigeria — talked about the mysteries of pricing, the big risks that entrepreneurs take, the economic value of trustworthy journalism, cost control, and why big media ignore small business.
Our guest. Loren Feldman is founder of 21 Hats, an online community of small business owners who compare notes, share strategies, and learn from each other. He has held senior editorial positions for coverage of entrepreneurship at Inc. magazine, the New York Times, and Forbes.
Pricing
James Breiner: Loren, what would you tell business owners to stop doing, and what would you tell them to start doing in 2024?
Loren Feldman: I think the refrain I hear most often from business owners, as they get more and more experienced, is that they should have figured out a lot sooner to charge higher prices for whatever it is they do, whether it's a product or a service.
Everybody struggles with pricing. It's not a science, and it's a scary thing to raise your prices. Actually, this inflationary period has been the easiest time ever to raise prices, because everybody was raising their prices. Consumers were expecting it, businesses were expecting it, and you could get away with it.
But even in the absence of inflation, it's important to make sure that you charge enough to have a real business. And a lot of business owners go into business thinking that they want to keep their costs down and prices low. They're afraid they're going to scare customers away with high prices. And it can be disastrous.
So, if you're having trouble keeping up, and the business is growing too fast for you to handle everything that's coming in, raise your prices.
Don’t be distracted
JB: OK, Loren, business owners should consider raising prices in 2024. What should they stop doing?
LF: They should stop paying attention to reporters like me and economists when we talk about where the economy is going. Every business has to fend for itself, so pay attention to the things you can control.
If you're in a small business, and if your business has a decent target market, and a good business model, you have control over certain things that should allow you to succeed even in a difficult economy.
And if you pay attention to people like me and economists, every two weeks you're going to hear something different: the economy is going to crash in a recession; the economy is taking off; it's a soft landing; it's a hard landing. Business owners should not pay attention to that and just do the things that they control to make their business run better.
What big media miss
JB: Tell us a little about your business, why you started it, and so on.
LF: I spent a lot of years working at big media companies in this area of entrepreneurship. And I felt that we were missing something, that there was way too much focus on the glamorous side of the business, on venture capital, Silicon Valley, Wall Street to some extent, and not enough emphasis on people who are out there, you know, taking real risks.
Even a lot of very smart business journalists don't fully appreciate the fact that those on Wall Street and those in Silicon Valley are taking risks mostly with other people's money. Whereas somebody who's running what we call a small business probably had to put the money up themselves, maybe a little bit of friends and family, that kind of thing. Even smart business journalists often are unaware of how often these entrepreneurs have to use their home as collateral to get a loan to build the business.
And I felt that the big media companies weren't paying enough attention to those businesses, which happen to represent about 96% of the businesses in this country.
So I left [in 2018]. I found a partner. It was my idea and his money. Unfortunately, when we hit the pandemic, his money dried up, and he left me on my own. And I've been trying to make it since then with, you know, some luck, some ups and downs.
But I have a daily email newsletter where I try to try to aggregate the most important stories of the day specifically for business owners. I have a weekly podcast, which is kind of a peer group conversation with10 regular guests who rotate. I talk to three of them each week. They all own businesses.
[In a followup email, Feldman told me 21Hats has 6,500 free subscribers and two tiers of paid subscribers. The podcast averages 3,500 downloads a week.— JB]
We started doing the podcast before the pandemic. I wasn't sure how long it would last. But their stories got more interesting once the pandemic hit. Some of them really struggled. Others did better than they would have in the absence of a pandemic.
And I think people kind of got interested in and bought into their narratives and wanted to hear how they were doing and whether they were going to make it or not. So I've stuck with that.
Adding value
An award-winning investigative journalist from Nigeria was on the Zoom call. [I’m not identifying him because I was unable to ask permission to use his name — JB]
He asked Feldman, “Do you think you’ve been successful? What I’m hearing from you is that for anybody to pay for anything you have to add value. Many of my colleagues are struggling [financially]. It’s only when you are authoritative that you can charge. You have to have something to give.”
Loren Feldman: That’s a great question. I don’t pretend to know how to run a business. I’m learning as I go. What I think I have developed over the last 20 years is the ability to ask the right questions. And if I get in a conversation with a business owner, I can ask questions and suggest alternatives, different ways to handle a difficult issue. And I can lead a conversation among a group of business owners. So the wisdom isn't really coming from me. The questions are coming from me.
James Breiner: What I've read about the media in Nigeria is that the number one value proposition is to build trust. If you can present to your audience that the information you have is verified and trustworthy, you have a big potential market. [My apologies, here. During the chat, I misspoke and named ‘Nairobi’ rather than ‘Lagos’ as the tech center of Nigeria; blame it on age or brain freeze — JB]
So that's the value that you can bring in Nigeria. In this era of disinformation, trust and trustworthiness have a tremendous economic value. You can charge for that. There are people who will pay for that.
A media trainer from Nigeria was also on the Zoom call. The investigative journalist asked her to comment on the trust issue. [Again, I was unable to ask her permission to use her name before publishing. — JB]
Here is what she had to say about trust and creating value: “The organizations I've worked with, what we've done mostly is to first build the capacity of the young ones. So we've gone into campuses to train them on how to be better journalists, how to tell stories, and also train them about the ethics of journalism.
“And we've also supported them in assigning them to mentors and editors who guide their storytelling. And that's one of the things that we've done to build trust in Nigeria. And I think so far so good.
“A lot of the young ones are improving and bettering their capacity, and they’ve translated that into value for people,” she said. “They’re driving impact in the country. A number of them are getting international grants and international funding.”
A successful in-person event
Loren Feldman: I started doing in-person events in 2023. I did my first one in Chicago in May. I learned a lot about pricing doing this. In my Zoom group, the CEO forum, I told people I was doing this, and I asked them for their suggestions on what I should charge.
And I heard one really strong message, which was, “You need to charge real money. It's not really about the money for us,” they said. “It's about the time we're going to spend. We want to know that we're going to spend it with other people who are serious about this. So if you don't charge a real price for it, we won't be confident that you're going to get real people with real businesses there, and we’ll be reluctant to come.”
The number I heard from them was $5,000. But I didn’t have the guts to charge that. I decided to charge $2,750 for the three-day event. People had to pay for their own travel and their own hotel. But I took care of all food and activities and everything else. I lost some people who couldn’t afford the price, but I did get 20 people and it went really well.
There were no speakers; nobody talked at them. We all threw out ideas for what we thought would be interesting topics. We voted on them. And then we worked our way through them over three days.
I’m planning my next one in Fort Worth, Texas, in March.
Final thought
My main takeaway from this conversation with Feldman is that there is value in building relationships with your target market. The tools can be a mix of email newsletters, investigative journalism, podcasts, trustworthy news, relevant advice, or events. Free, paid, or a mix.
Contrast this focus on intimate relationships with the focus on massive scale of news media like BuzzFeed, Vice, Insider, HuffPost, and The Messenger. These former investor darlings have seen huge falloffs in ad revenue. They’ve laid off thousands of journalists and shut down some news operations. They once wowed investors with a now-failing business model based on attracting huge audiences with algorithm-driven story selection and digitally targeted advertising.
Newsletters, podcasts, and face-to-face events offer the possibility of connecting with people in an intimate way, on their terms, on topics they care about. That’s the future I see. Think small.
What do you think about that?
Popular in 2023: Among my most commented posts were the three about Shakespeare the media entrepreneur. The new technology of printing was exploding in his time. He had to protect his brand, fight plagiarism, and protect his privacy — not to mention the threat of government censorship, imprisonment, or even execution.
Part 1: Shakespeare the media entrepreneur
Thank you, Jim! I'm more comfortable asking questions than answering them -- but this was a blast!