Set a Good Example, Or Your Team Will Follow the Bad One.

 

Set a Good Example, Or Your Team Will Follow the Bad One.

Your team will always be looking for clues about how to behave toward customers, vendors and each other. Right now, they’re getting nothing but bad advice from the highest level.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

 

May 27, 2025

 

As a young lawyer, I was introduced to a custom in our firm in which the rookies had to handle the many strange and simple lawsuits regularly initiated by one of our most litigious clients. This gent was in the towel-and linen rental business and whenever a customer failed to pay their bill or to return all of his items, he would insist that our firm immediately file a lawsuit.

These were not substantial dollar claims, and it quickly became apparent that filing them made no financial sense because the hourly legal costs far exceeded the value of the claim. The older attorneys in the firm believed that the client was more than a little nuts and each had their own war stories about their time in the “towel tank” as it was called.

In truth, the “honor” of handling these largely frivolous cases was halfway between helpful (learning the ins-and-outs and the arcane procedures of Chicago’s civil trial courts) and hazing (making sure the newbies knew their place), which bordered on harassment. To be slightly fair, learning to cultivate friends in low places at the clerk’s offices and begging them to help you learn the ropes was an invaluable life lesson. More importantly, even though young lawyers quickly concluded that this work was just slightly above ambulance chasing, the client loved every battle and happily paid for the privilege.

In fact, he absolutely prided himself on his reputation as a lunatic who would sue anyone who crossed him. He wasn’t stingy or frugal in the rest of his affairs and, in fact, he owned a great deal of property and bought and sold many businesses over the years, which was clearly why the firm’s senior partners were happy to appease him. But he relished his reputation – well-known across the city and his industry – as a guy who would sue you for a song.

If this propensity to sue everyone for little or no reason sounds sadly familiar these days and reminds us of the daily, illegal threats and extortionate practices of a certain Orange Monster, it’s not an accident.

But the point of the tale isn’t about the stupid or ugly actions of the client. What’s interesting is the impact on his customers and how it changed their behavior. In the very same way that Trump seeks to have the entire country bend a knee and obey his every demand, the Towel Tyrant made sure that every single customer knew that he wasn’t someone to be trifled with, put off, or stiffed. Result: his accounts receivable balances and bad debts were a wonder to behold.

Unfortunately, it’s not easy or often even possible to control the scope, distribution or reach of these actions and philosophies, or the messages they send, or exactly whose behavior they impact. Suffice it to say that there were plenty of prospects who happily found other vendors rather than having to deal with this guy. And others in the industry who – taking a page from his playbook – treated him just as shabbily as he treated his customers.

Enough has already been written about the direct results of Trump’s illegal orders, actions, and schemes.  But we’re just beginning to see how his in-your-face actions and constant outright grifting have begun to change the behaviors of millions of consumers and customers. Any day now you can expect to start seeing the costly and unfortunate behavioral changes in your own businesses that we’re already seeing all over Chicago.

The Trump rot is spreading, and it seems that millions of aggrieved individuals – especially the younger generation of inner-city kids – have decided that, if Trump can do whatever he pleases and get away with it, then why should they follow the rules, obey the laws, respect their neighbors? Why shouldn’t they simply take whatever they can get their hands on?

If you’re in a consumer-facing business – food, entertainment, education, medicine or government service – you’ve already seen dozens of social media videos and news stories showing stores robbed and trashed by hordes of teens. They smash display cases and throw registers around malls, refuse to pay for fast food meals and attack staff.  At big box and warehouse stores, security teams have been overwhelmed, outnumbered and beaten by thieves and other troublemakers.  

Making it okay to behave badly.

In a word, Trump’s overt and shameless lawlessness has given permission – if not direct approval – to every kind of deadbeat, bad actor, teenage wannabe gangbanger, malingerer and criminal to act out, cheat, steal and attack people and property with an inflated, unfounded and arrogant sense of grievance, entitlement and reparation. Trump will never be a good example of anything, but at least his corruption and narcissism can serve as a horrible warning of where we’re headed.

As the videos convincingly demonstrate, these aren’t people to be reasoned with, appeased or placated. The turmoil and the thefts are all an intended and important part of the exercise and the entertainment. They start with the proposition that “what’s mine is mine and what’s yours, we’ll talk about.” Chicago’s own racist mayor tells these fools that they’re entitled to take back what was stolen from their ancestors centuries ago and that he’s happy to lead the charge.

So, what exactly is any business owner or manager supposed to tell their team about how to respond to these growing threats to their operations? Customer service takes a backseat every time to server safety. The last thing any employer wants is to have their employees injured as they unsuccessfully try to protect the company’s property and merchandise. This chaos and loss of control plays into the hands and demented plans of an aspiring autocrat who would love nothing more than to invoke martial law and send troops into our major urban centers.

We’ve already seen that major retailers like Apple have instructed their employees (for insurance and liability reasons) to just stand by and let the thieves abscond with whatever they can quickly grab. No one thinks that this policy makes sense, but other than intensifying their onsite security and securing their doors, it’s not clear that any vendor has come up with a better solution. Some of the high-end jewelry and clothing stores in major cities are reconfiguring their entries to resemble the sally ports that traditionally limited direct access to prisons, banks, and other secure facilities.

CVS has addressed its “shrinkage” issues by locking up the store’s expensive merchandise inside plastic cases which – as you would imagine – has adversely impacted the shopping experience for actual paying customers. The high security approach gives their own staff another set of distracting duties—they have to open the cases for customers– and time-consuming responsibilities. And, in those areas where things are really out of control, we’re seeing stores simply closing.

It’s easy to lose faith and feel that things are hopeless and getting worse and, worse yet, that there’s no solution in sight. But that’s not the way that good people and great entrepreneurs think. We’re able to see and honestly admit that the challenges ahead seem daunting, if not overwhelming, and that our current leaders clearly aren’t up to the task of making things better.

But we still put our heads down every day and move forward with the heart, the critical energy and the determination that it’s going to take to make changes for the better. Chicago has been reborn many times over its resilient history and it’s up to all of us to do it again.  

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO TALK ABOUT STOCKS AND TECH

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Costco Has a Way With Words at “Costco Next.” 

And that’s a bit concerning. One of America’s absolute best retailers risks its rep by giving members “access” to outside sellers. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

MAR 25, 2025

Costco may have a bigger admirer than me, but I doubt it. They’re masters of shopping psychology – creating desire, ease of access, and a sense of urgency in every visit. They’re right up there with architect Victor Gruen, whose pioneering design work with shopping malls led to the idea of open-front stores with no barriers to browsing.

Of course, given the recent upsurge in smash-and-grab professional flash mobs and store ransacking by roving gangs of urban teens “just having a good time” according to Chicago’s Mayor Brandon Johnson, we’re seeing more doors, guards, cages, and locked display cases in retailers. But, interestingly enough, not at Costco. Maybe because 18 of anything is a little tough to stuff in your pocket or your girlfriend’s backpack while you’re fleeing the premises. 

Costco’s ability to transform shopping with your spouse from a chore into an exciting experience and a challenge is one of the great triumphs in retail. Not only are the giant TV screens and new technology the very first things you always see week-in and week-out as you roll in, but throughout the store there’s a visceral sense that, if you see something special on an end cap or other display, you better buy it today because it’s likely to be gone forever if you don’t.

In a store literally stacked with product to the rafters, Costco’s merchants can still create a sense of scarcity and immediacy that is palpable. This has quickly become learned behavior – grab the merch before it’s gone.  

How to sell Christmas trees in August

It’s not quite like the blouse-ripping craziness of Filene’s basement in the pre-internet days, or the shopping cart spree races we see annually on Black Friday when the hottest new holiday item becomes available. But there’s simply no other way to explain why sane shoppers would be stocking up on Santa inflatables and artificial Christmas trees in the middle of August. If you ask them, to a person, they’ll tell you that they lost out last year because they didn’t move quickly enough once whatever they “needed” went on sale. Besides that, who can pass up a hot dog for a buck fifty (since 1985) or a 3-lb. roast chicken that’s been priced at $4.99 since 2009. Such a deal. Bird flu be damned.

So, I was excited to read about their latest digital innovation, Costco Next, which is described as a virtual mall experience for members. They get to see upscale brands and other products that are not usually found in the warehouse stores, and at attractive and allegedly unique prices the company has negotiated for members. I thought, for a moment, that after more than 20 years of waiting, someone (other than Meta) had cracked the code and created a workable version of Second Life, where you could actually navigate and fly through a virtual mall, inspecting and selecting, but without the tech glitches– the ones where you’d end up stuck in the middle of some object with no way out.

Costco Next opens the door to outside vendors

But alas, Costco Next is just another glorified gateway to about 90 other suppliers’ websites. Not all that different than something Amazon has been doing for years with programs like Support Small, which promotes products and services from thousands of small and medium-sized independent sellers. While it’s true that Costco Next provides a channel and access to large items, seasonal items and other products that wouldn’t work year-round in the big stores, it’s actually a curious step or two backwards in a world where everyone wants everything to be one-stop shopping.

Every transaction initiated on any of the pass-through websites is a standalone deal – separate payment, varying return policies, and shipping handled by the third-party vendor as well. Whether you select a casket or a couch, all of the risks and burdens of the purchase are on you. While Costco says it curates the items being offered, that’s not much assurance if all of the risks are on you as the purchaser.

Pulling people in using the Costco branding and good will and then shipping them off to dozens of outside sellers seems a little “bait and switchy” to me. And, while Amazon makes no representations about the relative prices of the products sold by third parties on its site, it’s pretty clear from the Costco pitch that users are said to be getting discounts even for products appearing on the same seller’s own online website.

The risks of getting Costco-ized

But the deal actually gets a little worse if you read the fine print and descriptive language. While there are several oblique references to value and unique pricing, the most important part of the description of the new process is the statement that the goods and services will not only have been curated, but also “Costco-ized” as well.

Offhandedly, this might mean nothing more than that instead of a box containing a dozen pieces of a given product, it might be upsized (and up priced) to contain 18 of them. This seems fairly straightforward and it’s certainly nothing new to anyone who has ever shopped Costco and wondered how long it will take you to consume two gallons of olive oil or a bag of chips slightly larger than a sack of grass seed. Shrinkflation is rarely a concern.

Things get a little dicier when you take a closer look at what Costco-ized sometimes means to buyers and would be vendors. A few years ago, one of our portfolio companies created several food products that tasted great and were actually healthy as well. Eventually they approached Costco and were offered an opportunity to create a version for the stores.

But, as a cost saving strategy, it was suggested that they use margarine instead of butter and also change a couple of other ingredients. Of course, and notwithstanding how attractive the sales prospects might have been, they said “no” because they believed that those items would no longer be “their” products regardless of how they were labelled.

How often this happens, and frankly whether consumers could even tell or taste the difference, it was a warning sign that I recalled when the Costco Next materials highlighted that the items being offered were curated and selected by Costco buyers. I worry that far too much emphasis at these stores is placed on price, which is what you pay for something, while value is what you get. There’s no right price for the wrong product.  

 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Life Lessons From the Masters of Disaster 

The President-elect and the mayor of Chicago are great examples of how not to behave at critical moments. Entrepreneurs, take note. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JAN 2, 2025

In the generous spirit of the holidays, I’ve concluded that no one in government is completely worthless – even the chaotic, disappointing, and destructive reign of Chicago’s current mayor offers some modest learning opportunities for us mortals. As the saying goes, if you can’t be a good example, at least you can be a horrible warning, and Mayor Brandon Johnson is doing an excellent job of showing the world what a professional government official should never do.

Unfortunately, it’s highly unlikely that his behavior is going to change any time soon. So, the chaos of present-day Chicago will continue.

Hizzoner blithely lies regularly to the press and to the public about when and what he knew about crooks and other bad actors in his administration – typically right after they’re outed and discreetly shown the door. His stories about how much he knew about the behavior of Ronnie Reese, his disgraced and departed communications director, are just the latest examples.

Chicago’s finances will always be dependent on the largesse of the state of Illinois and so he says that he and his people are working closely with the folks down in Springfield, the capital. The folks in Springfield, on the other hand, report that they barely speak to him and his team about anything material and haven’t since he was elected over a year ago.

He is still technically on leave from but also on the ledgers of the Chicago Teachers Union (accruing time in service, the actuarial benefits of salary increases, and bumps in his expected CTU pension) while he bigfoots the Chicago Pubic Schools board. He has also tried to rush through an expensive contract for union bosses, and claims to be above the fray.

The list goes on.

But I think that Johnson has some value for entrepreneurs who regularly find themselves in water over their heads and for anyone else who’s concerned about what’s going to happen when Donald Trump regains the Oval Office.

Whatever you think of the mayor’s travesties, they’re just a preview of what’s coming down the pike. Think of Trump as a supersize version of everything that Johnson represents. Our mayor may have been a mediocre teacher for the few minutes that he tried that “career,” but he seems intent on his administration following in Trump’s footsteps.

The circus starts, of course, with language. Brandon is a master of arranging fancy words that sound important but mean nothing. He’s trying to bluff his way through questions and, when anyone questions his comments or challenges his conclusions, he deploys the race card and sulks off the stage.

Trump’s approach is actually less about big words and BS and more about bullying and bravado. Trying to parse any lengthy truth from Trump – even after the media sanewashes his material – is a fruitless gesture. Every one of his all-cap pronouncements is its own word salad.

Both mopes foment hate, and they thrive on its adrenaline, which they foster and enflame every day. They spend their time not building, but blaming; it’s always someone else’s fault. Everyone is after them and out to get them for whatever the current reason or excuse of the day may be.

They are the embodiments of the fake-it-‘til-you-make-it sickness that still infects the tech world.

The lesson for someone struggling, as every new business-builder does from time to time, to keep up with the constant flow of concerns or to cope with unforeseen obstacles, uncertainty, and complexity isn’t to point fingers, offer phony excuses, spew venom and threats, or make up stories that no one believes. It’s to slow down, hunker down, learn from your mistakes, focus on a few critical concerns, and shut your mouth until you have something relevant and truthful to say. As Thumper’s mom cautioned the little guy: “If you can’t say something nice, don’t say anything at all.”

The second failing that these gentlemen share is a reluctance to do the work required to lead, no sense of humor or curiosity, and a lack of interest in education, preparation, analysis, or research. Not surprisingly, in both of their cases, it’s of considerable value to know what you’re talking about and what you’re doing. They are seat-of-the-pants and spur-of-the-moment cowboys who will say anything to get through the day and disparage the efforts of the people who actually know what the facts are and, more important, what the alternatives and consequences of various choices and decisions may be.  

Worse, these two may be the world’s worst listeners, although they love the sound of their own voices and those of the sycophants who shield them from reality. Actions are rarely based on advice and analysis; everything is reactive. Trump, in particular, can’t go for a moment without attempting to grab the spotlight, stir the pot, and dominate the news cycle with whatever confused thought, threat, or lie might enter his head. They’re both in a hurry to go nowhere fast. They never sweat the small stuff or focus on the details and consequences of their actions – as every entrepreneur incessantly does.  

Because they don’t do their homework, they don’t build effective teams or support organizations, and they don’t listen to anyone who’s not telling them exactly what they want to hear.

Entrepreneurs appreciate and understand the need for speed and quick reactions, but their mindset and thought processes are entirely different from the ready-fire-aim methodology of the culture war crusaders in Chicago and Washington. The best business-builders I know – contrary to the media mythology – are careful, analytical to a fault, and far more conservative than you’d imagine, because they focus as much on the downside risks of any new actions to their people and to their businesses as they do on the upside opportunities. They take intelligent risks, but never randomly gamble – especially with the lives and livelihoods of others.

Trump and Brandon are more than happy to burn down the buildings and blow up the lives of millions. They’re all about optics – dressing up in racing suits and gilding everything with fake gold. This is why Trump has bankrupted practically every business he’s ever touched and why Brandon is well on his way to torching the central business district of Chicago in his fevered quest to serve his progressive masters.

 

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS ELECTION

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Don't Let the Politicians Dumb Down Our Schools

The future of our businesses depends on the quality of the current K-12 generation. We can't afford to lower standards, as Chicago is trying to do. 

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

Say what you will about the promises of new technologies, in our abundant optimism and eager enthusiasm for the new, we often become so focused on the future that we forget the fundamentals and the most important lessons of the past. Now's a good time to take stock and make sure that we're putting first things first as we start the new year. Nothing is more crucial than educating the next several generations of our children -- and we're doing a fairly poor job of it.

Given the crush and concerns of other problems, it's too easy to lose sight of longer-term needs. We have to continue to deliver on the basic promises on which we've built our country and our companies. Every major city suffers from continuing crime and drug problems. Murders may be down statistically, but the day-to-day robberies, muggings, and carjackings which deprive the citizenry of any feeling of security and comfort continue to rise. In addition, we have some Northern cities' resources being overwhelmed by the unanticipated influx of huge numbers of migrants with little available housing or medical support for them. Finally, and most critically, we see overloaded and underfunded K-12 education systems in cities like Chicago, Baltimore, San Francisco, and Philadelphia that are consistently failing to prepare students for college and viable future employment. Adding tens of thousands of immigrants to the mix only stands to make conditions at these schools much more difficult.

But if you think education is hard and expensive, it's nothing compared with the ignorance we're seeing every day in a growing portion - young and old - of the population. We can blame Trump for the fraud and rotten messaging, but we own the problem of the ignorance of the masses, which provides a welcoming home for the MAGA lies.

01:09

Millions of kids - the backbone of the workforces of the next decade or two - aren't getting the kind and quality of education that is essential to setting them up for success, both in their careers and in their lives.  And to be honest and selfish as well, it's our businesses and institutions that will suffer alongside them as they fail. All the tech in the world won't substitute for the well-trained, passionate, and committed people that it takes to create and build new businesses. Just as we need to aggressively support and promote the arts in our cities, we can't lose sight of the other essential drivers of growth which will determine our country's future success. And proper education tops the list for an informed electorate. Remember: if horses could vote, there would never have been cars.

Colleges have reported for years (even pre-pandemic) that incoming students were grossly unprepared for the rigorous academic demands and that they required a year or more of remediation before they could successfully manage their college experience. Employers report that, in many cases, these education deficiencies largely persist through the college years and result in socially promoted "graduates" who can barely read or write basic business communications.

The only schools that seem to be getting the job done are the private, charter, magnet, and selective enrollment academies, which unfortunately haven't scaled. But they have provided parents and their kids with a vision, a path, and the tools to get a jump start on what it's going to take to compete in the global economy. These are the experiments and the wins that we need to continue to build on and expand in order to make sure the pipeline continues to turn out the talent we need.

But in Chicago, Mayor Brandon Johnson has made another foul and foolish concession to his masters at the Chicago Teachers' Union and set a horrid example for so many other cities like New York, Detroit and Cleveland suffering from similar problems. He proudly announced that he had set his minions at the Board of Education on a new mission and directed them (before they are likely to be replaced next year) to rapidly map a multi-year path toward ending of the city's charter, magnet, and selective enrollment schools.

In a grossly miscalculated and foolish attempt at achieving some fantasy of citywide "equity," Johnson said he planned to emphasize the resurrection, rehabilitation, and renewal of the city's shrinking and decrepit neighborhood schools instead of building on the dramatic and documented record of consistent academic achievement the selective enrollment schools have demonstrated over the last several decades. The only true equity isn't killing the schools that are doing a great job, it's providing even broader and more robust choices to all the students and parents in any given city.

Johnson's plan is apparently to lower the bar by getting rid of the best schools so that all the students in Chicago can be equally ill-served and punished by the long-broken public school system, which has been mismanaged and manipulated for years by the teachers' union. This mope's foolish idea is to take steps to drag every Chicago student down to the lowest common local denominator rather than working to encourage the underperforming schools (and their staffs) to aspire to and model the behaviors of the best performers. Aspirations, visions, and dreams are just about the only things that are likely to motivate today's distracted and disinterested students and pull their attention away from their devices.

Those extraordinary schools like Walter Payton College Prep, Jones College Prep and Northside College Prep in Chicago - many of which top the annual lists of the state's best educational institutions -- offer ladders, incentives, encouragement, and open-ended upside opportunities for students from underserved neighborhoods. They are beloved by and sought out by thousands of conscientious parents who were obviously not consulted about the abrupt decision to abandon these centers of excellence along with the hopes of thousands of students and their parents for a chance to secure a solid education for their kids and a path forward to college.   

When challenged about previously promised opportunities for parental input, the arrogant newbie mayor (who was a "teacher" for about four months before becoming a CTU lobbyist) said that there was no need to consult with the parents because he "knew" what they wanted. The fact that he knows little or nothing about almost everything hasn't deterred him from screwing up every city program he's attempted to change or revise. Most recently, millions of dollars were squandered attempting to construct a tent city for migrants on property so demonstrably toxic that Illinois's governor had to step in and shut the knee-jerk program down before hundreds of parents and children were poisoned on the site.  

It's our job, and every business builder and parent's obligation in whichever city they're located, to stand up for excellence in our kids' education and demand parental choice in the schools they attend rather than caving in and settling for mediocrity across the board. Every school from the smallest neighborhood building to the mega-academies in every city should move toward the best they can be and put the kids' futures first. When I founded my first college, I stated then that education is a business that's too important and too valuable to be left in the hands of educators or politicians. That's still the case today.  

New INC. Magazine column from Howard Tullman

 

The Migrant Crisis Offers a Lesson for Entrepreneurs

Chicago and New York are struggling to handle thousands of new arrivals cruelly dumped in their towns by red state governors. But the proposed solutions show the downside of short-term thinking. As an entrepreneur you can't afford to act this way. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

Right now, the Democratic mayors of every major northern U.S. city are facing a novel, overwhelming, and complicated migrant challenge that has been aggressively and immorally engineered by the governors of Florida and Texas, among others.  Busloads of misled, unprepared, and unsuspecting families of migrants are being shipped north to New York City, Chicago, Philadelphia, and other cities.

Overnight, they're expected to implement viable solutions to process, house, and care for an influx of vulnerable, often ill, and generally non-English-speaking civilians of all ages. In some respects, it's a repeat of the kind of entrepreneurial challenges posed by the pandemic. And there are absolutely no easy answers.

But even the newest and least experienced entrepreneur knows that not every step he takes will be productive and move the business forward. Nor will it be the best and optimal choice possible because no one has yet invented an infallible crystal ball for new business builders. The same concept applies to newbies in government positions of great responsibility -- for instance, being the mayor of Chicago or New York.

The most critical thing to do in these cases -- given the immense challenges and the inevitable uncertainties -- is to not make rapid, stupid, and expensive decisions. If you try to run before you walk, painful and costly stumbles are guaranteed, especially if you lack operating and administrative experience.

Small, slow steps that preserve and often maximize flexibility and optionality usually make the most sense. Whether you're talking about new strategic initiatives,  geographic expansion and rollouts or trying to do too many tough things at the same time, it's smartest to go slow as you scale. Grand and abrupt gestures, quick patchwork solutions, or leaping before carefully looking are sure to fail. You don't test the depth of the pond by jumping in with both feet.

And, given the scarce financial resources and competing demands which are always part of the puzzle, the one inviolable rule is to avoid costly choices and commitments that are certain to be temporary and short-lived and which are not foundational in any sense. Only dummies go deep on disposables or rush so far down a precarious path that there's no turning back.

You can get away with a lot that's not perfect if you can at least show that the actions you took and the funds you spent were directionally correct. And that the enterprise can eventually reuse, repurpose, adapt, or build on top of whatever you've done to date so that it's not a total waste of time and money. The trick is to make your investments and actions incremental, flexible, and additive.  

But Chicago's newly-elected, amateur mayor, Brandon Johnson, who's never built or run any business - much less a massive operation like the City of Chicago -- apparently never learned this lesson. It's already becoming clear that, even though he was an elementary school teacher for a few months, he isn't really interested in learning and that his position isn't one that's well-suited to on-the-job training.

Chicago's latest plan to buy and erect massive tent camps to deal with the surge in migrants being shipped to the city by Red State governors is ill-conceived, ridiculously expensive, impossible to implement and doomed to failure. New York's latest solution - handing these people vouchers to go to stay in other parts of the state is equally wasteful, short-sighted, and unworkable. It's no wonder that the voters in these places, who were never asked or voted to become "sanctuary" cities, aren't pleased to have these enormous concerns and costs heaped upon them as taxpayers.

The best that can be said for these efforts (and the equally ineffective solutions being attempted elsewhere) is that they provide some handy warnings for startups as to exactly what not to do.

The current Chicago plan is to buy tents and house migrant families through the dependably fierce winter in random outdoor locations across the city. Did I mention that the vendor quickly and quietly selected to be paid $29 million to begin this travesty is the same firm that has helped MAGA moron governors move migrants from Texas and Florida to Chicago and New York? You can't make this stuff up.

But the saddest part of the story and the actual lessons for all new business builders are quite simple. There were sounder, smarter, simpler, and shorter ways to do a much better job of attempting to solve this particular problem. Each of the alternatives -- which were apparently never carefully considered in the rookie mayor's rush to just do something -- offers lessons for every kind of entrepreneur.   

First, don't buy anything you can rent or borrow if you only have a short-term need.

The city and state (as well as FEMA and the Illinois National Guard) have rented and deployed large-scale tents for emergency purposes during the pandemic as well as for other natural disasters, and for numerous sporting events, races, and other recurring festivals for many years. While housing thousands of migrants essentially outside is foolish, buying expensive tents for temporary housing and then discarding them is an even dumber idea.  Smart people rent for a reason and try before they buy.

Second, ride on someone else's existing rails whenever possible.

There are hundreds of built facilities throughout the city that could be pressed into short-term service (much as McCormick Place was used as a COVID hospital) including armories, 50 empty CPS schools, libraries and hospitals, or vacant warehouses at far lower costs and more quickly and efficiently than trying to build tent cities across Chicago. Several vacant hotels in the suburbs, which were previously serving as shelters, are already being converted into  housing which may become permanent facilities for the city's unhoused residents.

Third, make the money you do spend matter for your long-term needs and requirements.

There are massive numbers of abandoned or underutilized apartment and industrial buildings in Chicago which could be repaired, rehabbed, and returned to the city's long-term housing and commercial real estate stock using the same funding now being committed to the tent cities. In addition to creating long-term housing, undertaking these projects would provide employment and training opportunities for unemployed residents in precisely the underserved and resource-poor areas which need the most help. Nothing could be dumber or more wasteful than paying these new arrivals (who may ultimately become productive employees and citizens) to go away.

Finally, focus and concentrate on your efforts and concerns; don't spread them out and dissipate them.

While putting tent cities in each of Chicago's 50 wards might be a wise political approach, what the city actually needs is a prudent solution with the best possible permanent benefits. Selecting several primary, large-scale locations where security, transportation, food, and even educational resources could be concentrated and effectively delivered makes far more sense. Put all the wood behind one arrowhead.

Creating a couple of these permanent care and comfort facilities -- as opposed to piecemeal and interim internment camps -- would change the entire perception and purpose of the program. We could be helping with our housing, supporting our newest residents, and rebuilding parts of our city as well.

HOWARD TULLMAN AND LISA DENT DISCUSS BRANDON JOHNSON'S SHABBY TREATMENT OF DR. ARWADY ON WGN RADIO - HE'S AN EMBARRASSMENT, A DUPE OF THE CTU, AND KILLING OUR CITY

LISTEN TO THE SHOW HERE 

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NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

  

Some Big Cities Need to Get a Grip on Crime

Or they're going to become small cities. In Chicago, the daily havoc is ruining downtown businesses and prompting some companies to leave town. "Progressive" policing isn't helping. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

 

Anyone who's been paying attention knows that you'd have to be a confirmed masochist to try to open a business or a new store in the central business districts in a number of the largest cities in the United States. Ground Zero these days for urban unrest and the constant dashing of good intentions is undoubtedly San Francisco, where even foolishly optimistic corporations like Whole Foods have basically given up fighting against the continued assaults on their people, non-stop and largely tolerated shoplifting and overt thefts, open-air drug markets and mentally ill homeless wandering the streets.

Only weeks after Whole Foods shuttered a nearly brand-new store in San Fran, Nordstroms, a longtime and legendary retailer, announced that it is closing two downtown locations as well. Seattle and Portland, Oregon don't even pretend any longer.  Their streets, sidewalks and parks are virtual war zones and no one running any kind of business there thinks they're going to be able to survive much longer. Street crime and drugs are rampant and basically ignored by the progressive municipal administrators; and the disease is spreading.

We're seeing the same kinds of issues and problems in Chicago, and we've also got insane levels of carjackings by armed groups of 13-year-old kids.  In addition to the retail marketplace collapsing in downtown and commercial real values plummeting, we're seeing a growing exodus of major corporations, which has even worse implications for the city's long-term health and viability. Having just elected a new mayor who has absolutely zero business, management, or operational experience  to follow in the footsteps of the last angry, nasty and grossly incompetent occupant of that office, we're seeing firms reducing their presence or leaving town, most recently Guggenheim Partners.

This should be a warning to the incoming mayor, Brandon Johnson, as well as to other "progressive" mayors across the country that the tech and business community's exodus to greener and safer pastures is moving forward at lightspeed. In fairness to Johnson, the rush to the exits started with Mayor Lori Lightfoot, who abruptly and aggressively turned her back on the business community and largely ignored the needs of the downtown business district whose stores, restaurants, hotels and theatres are among the largest drivers of the city's economic success. Companies are voting with their feet as they seek out safer, more corporate-friendly and better-managed communities.

Someone needs to reach out in a hurry to stem this tide or there won't be much of a CBD or an economy left in Chicago. To date, if anything, the confused and hostile messaging -- largely leftover threats and promises from the campaign -- which the mayor-elect has promoted has done exactly the opposite. Sadly, the more that these progressive and inexperienced novices pontificate about their grand visions and future (albeit undetailed) programs, the more difficult it becomes for any rational business leader to make forward-looking plans that include Chicago and cities like it in the equation. You can't build a solid business on a foundation of fast talk and fantasies.  

The COVID-19 pandemic and the largely irrevocable behavioral changes it precipitated have provided an amazingly convenient excuse for two or three different kinds of corporate action that in earlier times were simply not viable alternatives given the likely civic and political blowback they risked. Shrinking or entirely abandoning substantial downtown office spaces in the name of a newly liberated workforce that wants to work from home is one example. Which means that threatening to tax those commuters who were planning to return to the city for work is a stupid start if the goal is to rebuild a thriving downtown.

Not bothering to rehire entire middle-level tiers of white-collar workers - especially of a certain age - is another ongoing corporate process because the tasks those workers performed have been outsourced, compressed by new A.I.-driven tools like ChatGPT, or eliminated by automation. That turns out to be very convenient cover for headcount shrinkage as well as the conversion of large segments of the workforce from fixed infrastructure costs into variable and often outsourced expenses -- conversions that have direct and highly attractive impacts on the bottom line. The insane idea in this kind of environment of reinstituting an employee head tax, as Mayor-elect Johnson suggested, is exactly the worst kind of disincentive to encourage new entrants and retain the few big businesses we still have.

So are the convenient knee-jerk rationalizations for constant shoplifting and the wanton weekend trashing of city buses and police cars as well as looting of downtown stores.  Apparently, we don't want to run the risk of "demonizing" any of the little darlings who simply have no other way or place to express themselves. This is simply an invitation to a summer full of mischief and mayhem, which will also help to make sure that our downtown restaurants and hotels continue to suffer from the tourist drought that has threatened their very existences for the last several years.

When the small stores, shops and food outlets in the Loop close their doors at 3 or 4 in the afternoon and thereby forfeit what little homebound commuter traffic there might have been to avoid the risks of staying open, the message should be clear to even the most oblivious observers. Chicago is simply not the place to be after dark. When big store operators like Walmart, which just announced the closure of four Chicagoland stores, and Target start to determine whether it even makes sense to stay open in certain parts of the city, we know that we are on the cusp of even more challenging times.

But, to return to the ongoing departure of major firms in the city and  the direct and  indirect ways that they are hollowing out their offices, warehouses and other activities, there's an even bigger and far more impactful problem with their disappearance. Many of these firms are the very organizations, enterprises, and entities that funded, supported, supplied manpower to, and otherwise encouraged the very essential civic, charitable, and philanthropic activities designed to serve the underserved populations that the new mayor says are so critically in need of assistance.

As these companies, their people and their attention shifts elsewhere, Chicago and every other major urban city that doesn't respond effectively to these problems will be much the worse for their leaving, in ways that simple headcount and revenue numbers can't begin to calculate.