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Archive for April 28th, 2009

There Is Always Money to Fund Start-ups Just Be Focused and Creative – It’s Never Easy

Tuesday, April 28th, 2009

by: Geoff Ficke

We live in perilous financial times. As the markets have imploded, home prices cratered, jobs lost and incomes uncertain many people have become very risk averse. Very understandable! Many of us are more focused on maintaining our resources than expanding them in the face of so many unknowns.

The American dream to successfully start and grow a self-owned business is always going to be with us. However, in times like these, some entrepreneur’s have become less willing to take the plunge into the ownership class. They are willing to wait until things settle; markets calm and funding sources return to prior levels. This is sound strategy for the timid, but these people are probably never going to be truly successful as business pioneers.

Recently I was in Spain and read a story about some French film students. Like so many creative artists, these young people are passionate about their art and fully committed to their dream of creating full-length films, in this case human rights documentaries. This is a very hard type of project to fund, even in the best of times. The market is brutally competitive, distribution is scarce and profits are very elusive for all but a few of the best productions. How in the world would these students find the funding they so desperately craved?

They did it the old fashioned way: they got creative. They sold vanity to investors. 

Have you ever sat through and paid attention to the credits listed so fully at the end of any movie or television show? They seem to scroll on forever. Each caterer, assistant caterer, food taster, drinks coordinator or executive chef is listed, fully named and titled. Over the past 20 years the number of producers, executive producers, assistant producers, joint venture producers and specialty producers credited has grown exponentially. This gave the students a simple, brilliant idea: We will sell credits for investment.

They started with other students, family, then used the internet. Credits were sold for various levels of financial contribution to the production, some for as few as 10 euro’s. It is amazing what some people will do to see their name in lights. Money poured in and the students were sufficiently financed to complete their film, present it at European film festivals and arrange distribution deals in various European media.

This is but one example of how serious, passionate entrepreneur’s search for alternative paths to bring their passion to markets. The opportunity has never been greater for those willing to get in the game. Is money tight? Of course it is. Has new business startups slowed down? Of course it has. Are people still trying to launch businesses, follow their dreams and present consumers with better products? Of course they are.

When business is booming, venture capital seemingly flowing endlessly and entrepreneur’s crawling out of the woodwork, well guess what, there is relatively speaking, no more opportunity that there is in soft times. In up cycles there is more activity chasing a finite number of resources. In down times, there is significantly less entrepreneurial opportunity chasing a still existing, but somewhat diminished pool of capital. It closely equals out.

The available capital necessary for funding exciting new opportunities is readily accessible if the entrepreneur is creative. The world economy will come out of this problem time. The products and services that are being prepared now will be the big winners when the pent up demand for new consumer products, technology, cosmetics, sporting goods, wellness products and a host of other categories explodes as consumers return to markets. Just remember, if it were easy to be successful everybody would be. 

Venture capital and funding sources are always, especially now, seeking the best, most vibrant, creative opportunities. Make your product special, desirable and different and then, it really doesn’t make any difference what the economy is doing. You will be able to attract the resources needed to be successful.

If Soccer is the “Beautiful Game” Then Baseball is the Most “Perfect” Game

Tuesday, April 28th, 2009

by: Geoff Ficke

The world worships the game of “futbol”, which in America we call soccer. While soccer has enjoyed phenomenal growth as a popular sport for male and female children, and at the high school and college levels, the game has not succeeded on the professional level in the United States. In the rest of the world, however, soccer is the most rabidly followed of all sports.

“Futbol” has been ordained the “Beautiful Game” by the soccer mad fans addicted to the game. Because the use of hands to control the ball is not allowed, the game requires immense foot/eye co-ordination, speed, balance, aggression and a chess-like strategic vision of the complete field of play. The flow of the game, which can seem slow to casual observers, is part of the beauty of the game which heightens the passion the sport enjoys among its rabid followers.

I have lived in Europe and travelled widely, including second and third world countries. It is an amazing sight to see a country completely mesmerized, the population, men and women, old and young, glued to television screens, as key matches are contested. Games between clubs from different countries create an unbelievable outpouring of nationalism.

Soccer is a beautiful game. And if that claim is true, then I believe baseball is the perfect game. The pace of soccer and baseball are similar in that much of the play is spent in preparation for the difficult tasks of scoring, goals in soccer, runs in baseball. Both are total team games, and yet, both require individuals to perform at high levels. The shortstop in baseball is completely alone when attempting to field a hard hit ball, but he needs other players to perform their roles in order to throw out base runners.

The symmetry of baseball is amazingly perfect. The game has been idealized to have been invented by Abner Doubleday in an upstate New York field in the mid-19th century. Maybe, maybe not! However, whoever really crafted the rules of the game designed a field of play with perfect dimensions. The dimensions actually increase the drama of virtually every pitch and play.

Imagine if bases were closer, or further, than 90 feet apart. The bang-bang play at first would almost never happen. If bases were closer the stolen base would be automatic, even for slower runners. The bases are laid out in a diamond, which provides a perfect path for runners to pursue and fielders to target. The pitcher’s mound, a small hill, is 60 feet, six inches from the point of home plate. If the rubber on the mound, which the pitcher uses to gain purchase and leverage while throwing to the batter, were closer than 60’, 6” the batter would have almost no chance of ever hitting the ball. If the rubber were further back the hitter would enjoy an unfair advantage.

The strike zone is designed to balance the opportunity for the pitcher and hitter to succeed on a competitive basis. Three strikes and the batter is called out; but an at bat can be extended indefinitely by fouling off pitches. Four balls and the hitter earns a free pass to first base, thereby forcing the pitcher to throw strikes or give up base runners which can lead to runs scored.

The most wonderful thing about the game of baseball is best described by the great Yogi Berra’s famous statement, “it ain’t over ‘til it’s over”! Unlike every other team sport there is no time limit in baseball. The game does not end until the last out of the ninth inning is secured. It is possible, and does happen regularly, that a team can be seemingly so far behind in the run count that the outcome of the game seems inevitable, but a few hits, a few walks, an error and all of a sudden there is hope that the outcome will be reversed.

Spring training, baseball on radio, hot dogs and beer at the park and the opportunity to enjoy a game played at a leisurely pace on a warm summer night while kibitzing with friends all make baseball the “perfect game”. It is every bit as beautiful as soccer, but played well, there is no sport as perfectly crafted and structured as baseball.

The Beauty of the Beauty Business

Tuesday, April 28th, 2009

by: Geoff Ficke

My marketing consulting/product development firm reviews hundreds of prospective consumer products from every category imaginable, each and every year. Sporting goods, specialty foodstuffs, auto accessories, juvenile products, toys, games, shoes, jewelry, ready to wear and health and wellness products are only a short list of types of items we review for funding and market launch potential. I am often asked what is the space most easily penetrated by entrepreneur’s?

This question invariable pops up almost every time I lecture at a university or am interviewed by media. I used to be a bit arbitrary, almost opaque in answering. However, over the years the answer has come into sharp focus. The beauty product industry must be at the top of any list of entrepreneurial sweet spots for successfully launching and growing a start-up business.

Since Biblical times perfumery has been a highly desired artisan industry. Local flora and fauna have been compounded into scents and potions that add beauty to the human body, the atmosphere and religious worship. Cleopatra was famous for her fragrant baths, the Bible is full of references to sacred fragrant oils and in modern times the fragrance industry has matured into an international, multi-billion dollar business.

And yet, every year, inspired entrepreneurs bring new scents to market. Aromatherapy has boomed as the science and awareness of the mental and wellness benefits of specific aromas has been researched. The process of creating a completely new scent, packaging, branding and delivering the consumer a product that offers a different fragrance perspective has never been easier.

One of the great entrepreneurial commercial success stories in the history of the perfume industry was the story of Giorgio. The eponymous fragrance was born in a single Rodeo Drive boutique, Giorgio’s, in Beverly Hills in the 1980’s. The scent, a clear break with popular fragrances of the time, was overwhelmingly powerful. The distinctive top note made the boutique a destination for shoppers as word of mouth travelled quickly about the unique warmth of the dried down fragrance notes of Giorgio.

The Company did not have the necessary funds to launch nationally with major department stores. The owners decided to do a bit of guerilla marketing. They started to place scent strips impregnated with the Giorgio scent inside of local magazines targeting high end consumers. The power of the scent leached from the magazines and newsstands became fragrance cocoons for the Company. Mail order sales exploded, the campaign was quickly expanded to national women’s fashion magazines and a direct mail business was set up solely to fulfill consumer demand.

Soon the major department stores were falling all over themselves to stock and promote the Giorgio line. The Company was able to negotiate from a position of real strength and demanded, and received, prime space and location in every store that carried the brand. Sales exploded, the product became an international sensation, a key item in duty free shops and eventually was bought by consumer product kingpin Procter & Gamble.

Giorgio is an extreme example of commercial success. Nevertheless, if one were to examine the most popular fragrance, skin care, color cosmetic, bath and body lines and cosmetic accessories lines sold in various classes of trade (department store, mass merchant, drug store, etc.) from 1950, 1970, 1990 and 2009, the researcher would be surprised by the churning of brands that rose and fell.

Hazel Bishop was one of the most popular cosmetic brands of the 1950’s. Rose Milk was a wildly popular body care product of the 1970’s. Indian Earth was the flavor du jour of makeup products in the 1980’s. Chen Yu was the original classic nail care line after World War II. Francis Denny, Germaine Monteil, Imperial Formula and Alexandra de Markoff were popular specialty store skin treatment brands. All were founded by entrepreneurs, enjoyed widespread distribution, commercial success, fell from grace, and were replaced by a newer generation of entrepreneurial products.

The beauty industry has relatively low barriers to entry. Private label laboratories exist in every area of the country and are eager to satisfy creative demands of new entrepreneurs with fresh product concepts. The ability to bootstrap a product or line exists in the cosmetic industry as in virtually no other. Limited amounts of capital can be leveraged and made to go a long way.

Competition is, of course, very stiff. But competition is brutal in every mature industry. However, in the cosmetic business, there is an insatiable demand for  new, exciting,  and different products. The industry is huge, but the opportunity to identify and fill tiny niches is virtually limitless for entrepreneurs willing to commit to their concepts.

Take a stroll through a Sephora or Ulta store. Virtually every product stocked in these beautiful retail venues was crafted and branded by an entrepreneur in the recent or distant past. Estee Lauder is one of the world’s great brands. However, Mrs. Lauder started in the early 1950’s making a single cream in her apartment. The hugely successful professional beauty salon brands Redken and Matrix were created and nurtured by Jherri Redding and Arnie Mitchell respectively. They are mighty today, but they were like tiny mustard seeds at birth before evolving into industry icons.  

The rise of the internet, direct response, electronic retail, specialty retailers and mall kiosks has changed the landscape for selling all types of consumer products. Today’s cosmetic entrepreneur has more opportunity to penetrate the marketplace than ever before. The beauty of the beauty business is that the truly inventive can enter this marketplace and grow their opportunity at their pace, with limited capital and enjoy a real chance for a successful outcome. This cannot be said about many business opportunities.

The Board Game Revival

Tuesday, April 28th, 2009

by: Geoff Ficke

Each year in February the world’s largest Toy Fair is held in New York City. This is the Mecca for buyers, sellers, promoters and inventors of toys, dolls, plush toys and games. Every conceivable type of whimsical product is displayed and hyped with gusto, creative marketing and some bluster. The event is attended by people from over 100 countries.

This year the Toy Fair was reflective of what is going on in the world economy. Attendance was down, there were noticeably fewer vendors displaying product, the glitz was considerably dimmer and the overall mood was very somber. The world’s largest toy companies Mattel, Fisher Price and Hasbro reported sales declines for the recently concluded 2008 year. Mid-size and smaller vendors had even worse news to report and many seemed to be barely hanging on, hoping for a robust 2009 Holiday selling season to resurrect their fortunes.

For the past decade or more the exciting growth in the toy/game world was in electronic products. Electronic Arts became a juggernaut by producing action video games targeting the highly desirable male teen demographic. However, this year even Electronic Arts has struggled, sales dropped and just recently the Company announced the resignation of their most prolific game design engineer.

Interestingly, there was one area of vigor and strength touted at the Toy Fair: mundane board games. Yep, the kind of game families used to play around the kitchen table after dinner. Parents and kids interacting; while they enjoyed time together, talking, negotiating, competing, laughing and bonding. Great concept! Board game sales actually enjoyed a record year.

Hasbro introduced several new iterations of classic Monopoly. The world’s most popular board game, Monopoly is played by almost 500 million people all over the world. The iconic game, crafted during the Depression to mimic the various strata of society during that time, is the gold standard in the board game space. At this year’s Toy Fair new board game offerings were on display as never before and seemed to be the center of renewed interest from buyers noting the tenor of the times. The simple board game is enjoying a revival, in part because the times we are living through have adjusted our sites to the importance of quality family time.

Video games are typically solitary or demographic specific products. Board games offer a wholly different play platform. An eight year girl, her 10 year old brother, visiting college age sister and mom and dad can all enjoy a game of Sorry. The game is played at a leisurely pace. Lots of kibitzing is part of the fun. Soda’s and popcorn are ubiquitous while the family enjoys the game.

My consumer product consulting firm is approached with a number of toy and game submissions each year. Many are quite ingenious. The marketplace for this type of product is extremely competitive, as are most mature consumer product categories. However, the market is always open to novel, inventive new products. The Great Depression, similar in some ways to our current economic circumstance, was a Golden Age for consumer product inventiveness. The opportunity to launch successful products today is just as ripe.

The key to launching a successful board game, as with so many other consumer products, is simplicity. Make sure the play rules are quickly and easily understood. If playing the game requires a tutorial and lots of qualifiers, the likelihood for achieving retail placement and commercial success is minimal. It is important that the competitive aspects of the game depend upon a mixture of basic skill and chance. Every player, no matter age, education or experience, should enjoy a reasonable chance of winning.

The world is undergoing a sea change caused by an economic malady that affects virtually all of us. The opportunity to profit from this adjustment of societal values and attitudes offers entrepreneurs unique possibilities to provide products with timely features and benefits that fit the times. The return to popularity of board games is symbolic of this new reality.