The Road Well Traveled

I was reading an interesting article yesterday by patent attorney Andrew Spriegel about the realities facing inventors who approach him with what they are sure is the “million dollar idea”. You can find it here. After reading it through, I was struck by the many parallels to our own business and went back to it again with that as a focus.

And you know I love me them there realities…for instance:

For every 1,000 patents, only four or five will actually make it to the market and make any money; the rate is less than ½ of 1 percent. I’d say that in design licensing the percentage making it out of those portfolios would be similar.

Many inventors are too close to their idea and rely on family and friends for opinions instead of doing the market research to see if it there is a demand for the product, and as a result end up spending years and thousands of dollars on something with little or no market appeal. Boy does THAT sound familiar…

There is a network of “for-profit” invention mills that promise results but are only out to take the inventor’s money with no regard for whether the product is actually marketable. Hmmm….

Occasionally the best ideas that seem to have great promise don’t go anywhere. He stresses that the invention/patent process is often frustrating and you just need to keep moving forward. In our business this is absolutely true, and when (not if) it happens to you, stop and use what you’ve learned to retool, reinvent and then relaunch – either an improved version or a whole new idea. Sometimes our pet projects just are not going to work and that’s OK – fail fast, fail early and move on is the mantra.

He cautions inventors about selling out to a big box store like WalMart or Home Depot because their distribution models will produce only a small profit percentage for the IP owner. Well, ain’t it the truth. While big box retail margins stay high, we have seen a steady and relentless erosion of the royalties generated by products sold into big box markets (see the previous post) and there is no end in sight.

The point here is not to “dash dreams or slay hope” as he says, but rather to keep those alive by pointing out that your roadblocks are generally not unique, but instead typical of what one encounters while pursuing a successful creative life. Expect them, scramble over them and keep creating. Cast a wide net when looking for information and inspiration – you never know what will be useful and we can learn much from all those inventors, musicians, writers and others on similar but divergent paths.

And I bet we'll have a few things to teach them as well.

Bring It On Home

It would be funny if it was not so tragic. The headline reads “China Factories Eye Cheaper Labor Overseas”.  It’s well documented that labor costs have been rising – dramatically – in China over the last few years, something like 15 to 20 percent per year, and of course material costs for anything and everything have gone up worldwide.  Shipping is also skyrocketing, to the point where our clients tell us some factories will no longer quote hard prices – just an estimate that may change (upward of course) by the time they place the order. Countries like Bangladesh, Ethiopia, Vietnam and a host more are looking to pick up the slack, but the logistics of manufacturing in the middle of truly undeveloped countries will give anyone pause. Regardless, it’s a weird twist that the products we outsourced to China might actually be made in Africa by China.

Shouldn’t this open up more opportunity for us at home? Well…maybe… Art and design in America is inexorably tied to price – sad but true. We marvel at the beautiful pieces in a Scandinavian Design store and then wonder why we cannot buy them at WalMart. Everyone loves a Lamborghini or Ferrari, but every American company that has tried to build a high design car eventually fails. We crave Missoni, Mizrahi and Michael Graves but the only time we buy it is when Target rolls out a discounted collection. This is the state of consumption in America, cachet without the price, so is it any wonder so many of our jobs were displaced to countries providing cheap goods? You can try to blame corporate greed, but corporations react to what their customers want, and as a nation we want cheaper, cheaper, cheaper. Perhaps now the field will level a little bit and we can make an effort to support our own manufacturers and give them a reason to bring it back home again.

Ah well, a boy can dream.

Another article that hit my inbox today was about the new problem vexing big box retail, and it now has a catchy name: showrooming. This is the rapidly growing practice of using the brick and mortar stores to see, touch and feel the products and then ordering them online for a cheaper price. BIG problem for stores like Best Buy, Target, Wal-Mart and many others, especially for music and high end items like tools and electronics.  The first line in this article (from the WSJ) was “Target Corp is tired of being used” and my first thought was “well, that oughta bring snorts from anyone who has had the pleasure of dealing with them”. But all that aside, the basis of the article was that TGT has sent a letter to their vendors asking them to create products unique to their stores to help shield them from price comparisons (presumably by altering features or model numbers), and if that is not possible they want the suppliers to ensure they can match the online prices. Without hurting their margins of course.

Did you hear the groan from the experienced licensors out there? We already know that, working this backwards, that means retailers will extract more price concessions from the manufacturers, which means the mfrs will need to find ways to cut costs further which means – yup – we will all be invited to participate. Again.

Man, I am getting to dislike Amazon….

Atlanta and Some Exhibiting Realities

Whew. Just in last night from a week-long trip to Atlanta, staring at this pile of stuff on my desk (and floor, and numerous other flat surfaces) and wondering how I will ever get through it. So let’s write a blog post instead. As one of our customers said this past week: “We are a nation of A.D.D.”

We spent six days inside the AmericasMart, three of them exhibiting in the License and Design section and three more meeting with clients in showrooms, and all I can say is - wow. The atmosphere was electric, a wonderful change from the last few years; showrooms were crowded, orders were being written and there were big grins all around. A few comments:

“It’s like the good old days”

“We are up 15 or 20% over last year and it’s only Thursday”

“The showroom is going to set an all time sales record this market”

”I’m happy to see retailer’s chins off the floor”

Hard to argue with that. We had a great show, great meetings, great things happening - follow up is actually going to be fun over the coming weeks.

Speaking of the L&D show, we had a mix of new and seasoned exhibitors and talked to both (hopefully helping out some of the newer folks) but those conversations got me thinking about exhibiting realities. Now a person could write a book--and some have--about this, but there are some things they won’t tell you (or they just don’t know). After investing a couple hundred thousand dollars into exhibiting at dozens of shows we can offer a few tidbits:

1. You are not going to walk out of the show with a fistful of contracts or even firm commitments. Expect none, they don’t normally come until weeks or months later.

2. If there are people at your booth, potential clients will continue walking, so do not sit in front of your, or other, booths chatting and keep your friends away from the front of yours.

3. Make your booth approachable, have chairs (usually out front) for more than one person, make it easy to view your portfolio(s) and think about how you will deal with multiple customers at once. Do not expect them to come inside the booth, they don’t want to be trapped.

4. Carry your portfolios onto the plane or into the motel at night if driving – we never let them out of our sight before the start of a show – then you will always have something to show. Shipments do disappear, are sometimes late, and airlines occasionally lose bags.

4. This is not an art fair or a decorating contest. Wall displays have one purpose – to stop people so you can engage them. If it is too elaborate they often think “crazy artist” and stay away (same for your outfits…). Printed roll-up banners make life WAY easier.

5. This is a professional event so act like a professional. Wear business attire (your clients do). Have a business card and a handout sheet. Arrive well before the show opens and never leave before closing time. Plan on standing up for most of the show. Don’t eat in the booth. Smile.

5. Watch the agents – in addition to all of the above they will engage people in the aisles, listen carefully to and concentrate on their customers. There’s lots of laughing and hugging going on at their booths - it’s a people business and shows are about building and maintaining relationships as much as they are about showing art.

6. Attendees have a short time to see countless portfolios, and many are looking for only one category (such as Christmas or floral) so respect their time. Organize your portfolios by subject, I suggest at least Baby-Juvi, Everyday and Holiday and then get more detailed if you wish. Many will refuse to make appts at shows, and even if they do your meeting may be late, hurried or they may skip you altogether – just get over it, hitch up your dungarees and go back to sparkling.

Remember your art is not for everyone so many people will walk by with just a glance. That's just how it is so don't be concerned. Unless they all do - then it's a whole different conversation...