The Restaurant Experience is Declining in California

Interesting article at Wolfstreet about the restaurant business still going through turbulence, but surprisingly still up a bit in California.

 

But my guess is that California restaurant revenues are up due to inflation and steady traffic at very high-end restaurants that serve the upper-crust in LA and SF.  But I think the mid and low-end of the spectrum is flat to down as this segment massively makes cuts to offset increases in wages. 

 

I have watched over the past two years as an ever increasing number of restaurants become  "countertop ordering" where customers order at the register.  You then get a number and someone brings you your food, or even worse, they call your name and you have to make your way up and fetch the food yourself.  This is fine for a pizza joint or fast food, but the problem is that this is happening everywhere at places that are supposed to be family or casual dining.  At a mall close to my house there are over a dozen places to eat, but only one has wait-staff.

 

Outside of pizza or lunch I simply refuse to eat at a place like that.  There are a couple of mom and pops that I frequent that have wait-staff, but they are not exactly cheap to eat at any more. 

 

I think counter-top dining and $8 beers seem to be the future of most California dining.

The Long-Term Layoff

I discussed before how those close to the corporate forecast know when a company is imploding and know before anyone else that  layoffs are coming.  The other situation where this happens is M&A.

 

M&A layoffs by acquiring companies come in two main flavors: immediate layoffs after the acquisition is closed, and long-range layoffs once the knowledge of the acquiree has been assimilated into the acquirer. 

 

I have been on the acquisition side a couple of times, and few people know how medieval it can get during initial cuts.  Managers go through lists of names and simply check off boxes on who will be eliminated.  They are just names and checks, but the result is a few hours later that person is gone.  It would make Stalin proud.  And few people have any clue how simple statements can get them doomed. For example, one engineer at an acquiree company mentioned in passing that he might want to go into marketing one day.  That simple comment got him the axe when the culling came.  The company was acquired for their engineers, and anyone who didn't want to stay an engineer wasn't wanted.

 

I am now on the receiving end of an acquisition, but it was a "friendly" buyout and there were no immediate cuts after SuperGiantCo bought the little start-up.  But this is covering up the long-range plan to assimilate the smaller acquisition into the collective whole of SuperGiantCo. 

 

The main way they are doing this is by "boiling the frog slowly" on engineers and "salami slicing" the management.  By the former, they create ways of "knowledge sharing" between acquiree engineers and SuperGiantCo engineers that are really "knowledge transfer" from the former to the latter.  But this is done a little at a time, in a very natural, friendly way through exchange programs, meetings, joint projects and the like.  What the acquiree engineers don't realize is that they are slowly transferring their brain to SuperGiantCo engineers, and in 2-3 years they will not be needed.  They are basically training others to do their job, but in a way that seems benign.  Already SuperGiantCo has "shadow design centers" doing the exact same thing as the acquiree company used to do.  Once those shadow design centers are up the learning curve, my engineers will become redundant and ready for the chopping block.

 

On the management side (my side) they are doing "salami slicing".  Instead of removing responsibility of the old managers all at once, they do it one small piece at a time.  No single piece means much, and in fact the offload sometimes might be welcome, but after a while you realize that your whole job has been sliced away piece by piece and given to various managers at SuperGiantCo.  This is also about a two year process.

 

At the end SuperGiantCo won't need either the engineers or managers from the acquiree company.   At that time they will either let us go, or for a few lucky ones might be Borg enough to land a position in the parent company. 

 

 

Six Months of TMJ Tennitus

Six months I ago I woke up to loud, constant ringing in my ears. While that is my "start date", the fact of the matter is that T had been sneaking up on me for years. For a long time:

• When I yawned I heard a high-pitched whine. It had gone on so long (years) I thought it was normal
• When I swallowed a big drink (swallowing a few times in a row), my ears whined. I also thought this was normal

What I didn't know was that jaw misalignment plus night bruxism was slowly pushing my jawbone further and further up into my skull, pinching and damaging my inner ear. It was getting worse for years in the background, and finally became constant 6 months ago.

But when the tinnitus started, I didn't remember all this. All I knew was there was loud ringing in my ears and seemed to be getting worse. It started at a 5/10, and panic and anxiety (and unknown to me more grinding of my teeth) just made it go up as high as a 7. I went to specialist after specialist getting more desperate as I searched for an answer. I heard everything from ear infection to "you're just getting old" (I am younger than 50). It took a month before I found a brilliant specialist who with a CT scan diagnosed it as TMJ+bruxism.  For the previous 4 weeks I thought I was going deaf, could hardly sleep, and couldn't work or concentrate. I was in despair.

 

Once I was diagnosed I could come up with a treatment plan.  Today after 4 months of orthotics and PT - and now in orthodontics to permanently reset by bite - my T is usually at a 2/10, with occasional dips into 1 and spikes into 3. This is "manageable".  Yes, it sucks, but I can work and function. I have also adapted enough that a 2 is forgotten when I am absorbed into work/pleasure/reading, but I do miss my silence.

On the downside, other TMJ symptoms have shown up, including jaw soreness and tenderness of bite. So I haven't eaten anything firmer than fish for 5 months and will have a metal mouth for the next 12-18 months.

Some thoughts/tips for anyone out there who has this:

 

- Meds - Get anti-anxiety/anti-depressant drugs and sleep meds ASAP after getting tinnitus. I was having panic attacks and took meds for that at first. After stabilizing I don't need anti-anxiety meds any more. Sleep is also critical since stress dials the volume up.  With sleeping aids I now sleep 8+ hours a night and the T runs low.  When I can't sleep much I notice it results in a bad day of T, which gets to the next point.

- Reduce Inflammation - For TMJ and many pulsatile T sufferers, I am a big believer that inflammation is a huge part of the problem. Try to keep that low with diet, sleep and NSAIDs. For me Aleve lowers my T half a notch, plus relieves pain in my jaw. Aspirin didn't do anything for my T, and Advil actually increased it a notch. You will have to experiment on what works for you.

 

- Less Coffee, More booze!  Eliminating coffee is something that most T sufferers recommend.  I read about this when my T first started and stopped my 2-3 cups a day immediately.  Six months later I miss my coffee a lot, but when I decide to try a bit, my T goes up within 30 seconds of taking a sip.  On the plus side alcohol, like Aleve, lowers the T half a notch.  However, too much increases inflammation and affects sleep, so don't overdo it. 

- Try Various Therapies - When this all started, the TMJ inflammation was not only in my jaw, but had spread to my neck. I could change the tone and volume of my T by pressing on different parts of my neck for the first 4 months. I did massage therapy for three months, and still jump in the Jacuzzi daily, plus ice my jaw every evening. Now that inflammation has gone down to only my TMJ area, I no longer can change the tone/volume of my T by pressing on my neck - and I believe this is part of the reason my T went from a 5 to a 2. I can manipulate my T today only by rubbing on my TMJ area.

- Be patient. It took a month of orthotics and PT before I saw improvement (month 3). I then saw pretty quick improvement in month 4, then have been stalled for 2 months. My braces are on for 12-18 more months, and I hope to get down to a 1, but I actually don't think I will get to a permanent "0", which gets me to...

- Acceptance. This is probably the hardest part. I accept the worse case that I will always have some level of T (which will leave me pleasantly surprised if things get all the way better).

- Compassion. I know I am "lucky" in that I know what caused my T, have a treatment plan, and have had improvement, with the potential for more improvement. While that brings hope, I know that I am an outlier, and the vast majority of people with tinnitus (especially those with nerve damage due to loud noises) have to live with their condition as-is with little hope of getting better. This is why I am doing these posts plus contribute to the site Tinnitus Talk (TT) every so often.

 

- Remember the Limitations of the Internet -  I write these posts in hopes that someone with T finds them and finds the helpful. I also linked to the Tinnitus Talk site above, but one word of caution: many (probably most) of the posters at TT are in despair, and you can find a few who are suicidal.  As a "newby" of T, one might go there, see all the negativity, and become desperate.  Remember that people who had T and got better don't post any more on sites like that, and there are lots of sufferers who do get better.  Also you do eventually adapt.  The first month is total hell, but today (even at a lower volume), my T is constant but I don't hear it most of the time.  Your brain does adapt, and there are treatments from various clinics that can help your brain adapt if you can't do it on your own.

 

 

You Can't Forecast the Business Future

One of the tasks I have absolutely dreaded over the course of my business career is the annual forecast.  It would save everyone a lot of bother if the executive in charge would just state the number that will give him his bonus and be done with it.  But instead there is a big kabuki theater of staff doing market analysis, market inputs, competitive analysis, inflation and currency trends, and creating giant spreadsheets of models that generate a number.  Then the executive then says "too high" or "too low", a few variables are tweaked, and the model generates the number desired.

 

In my 25 plus years of business I have never seen an accurate business forecast.  They were either cooked (revenue already signed and in the bag, then the model tweaked to match the sales manager's give-me), sandbagged (forecast put waaaay below the number the sales manager knew he could hit so it would be a slam dunk), or totally optimistic forecasts that everyone knew was impossible, but presented to executives so everyone knew they had time to interview before everything fell apart.  

 

I have been in several situations when things were definitely going to be bleak 12 months later - no question about it - but didn't end up in the forecast. A flat or slightly up forecast was presented and everyone hung on 9-12 more months until the truth was out.  The forecast-lie was sort of an extended layoff package for those in the know.

 

Sandbagging is my usual tactic if things are not bleak.  I might have contracts lining up for $80M, but forecast $60M.  This gives the sales team wiggle room for contingencies, but makes everyone look good when the forecast is blown out. 

 

Of course the problem when you blow out "forecasts" is that you have to explain the next year why that won't happen again.  The easy explanation is that the upside was due to "blue birds" - one-time customers who came in out of the blue and could not be forecasted.  Because these upsides were out of the blue and one-time events, you can go back to your previous baseline, plus a couple percent, successfully sandbagging for another year.

Start-Up Pet Peeves

I work in the electronics supply chain and am consistently amazed at small customers who don't understand economics.  Company after company expects that if they buy 1,000 of a custom item, that it should be the same price that Apple gets when they buy by the tens of millions.  And when I explain to them that making 1,000 units requires the factory to set-up and do a run, and that the fixed costs have to be amortized over those 1,000 units bringing the costs way up, many customers lose it.  They get angry.  They call me names.  They threaten to go to my competition (which I them welcome them to do).  And it is not an act.  They really can't understand why their little robot which they are making 1,000 (soon to be millions of course) can't have component pricing like the iPhone.  They are totally clueless.

 

I think this is partly a carryover of their consumer mentality.  Whether it is blue jeans or electronics, most products today are made by the millions, making their incremental cost infinitesimal.  And those costs are passed to the consumer (and economics tells us that in the long run price ends up at incremental cost).  So they see the iPhone cost breakdown and figure their gadget should cost that much or cheaper, and are shocked when it is multiples more.  They don't get the whole volume/price thing.

 

Those that do ask about forward pricing.  They tell me "My product is going to be yuge volume once it launches!  Price me at a million now and I'll buy more when it takes off!".  Do you know how many times I have heard this and saw the company disappear off the face of the planet?  Literally dozens of times.  When a customer asks me to do this they are asking me to become an investor, and my job is not to invest in companies, but to make money for my own.

 

The other thing I get tired of hearing is small companies wanting to do a "joint development effort".  That is just a fancy way of saying "can I get free technology from your company?" or "I need more investment money and you look like someone I can sponge from."  I got so tired of hearing this I just started telling customers "We don't do joint development.  We sell and you buy."  That gets rid of most of them.

 

Now I have been in several start-up's myself, about a third of  my 27 years in business, so I do understand that you have to push to get as much as you can from vendors.  And I do know what it's like to see only a month left of cash left and having to do anything you can to get product out.  But these companies need to understand that I have to make money too, that I have my own company's interests to look out for.