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Archive for August 21st, 2013

A Surprising Number of Consumer Products Leap Categories and Discover Multi-Chanel Success

Wednesday, August 21st, 2013

by: Geoff Ficke

Many, many moons ago, when I was a small child growing up in Kentucky, my mother created her own customized skin care products from items she harvested from our food pantry and refrigerator. These were a type of artisan treatment regimen that had been handed down from her mother and other female relatives. I can clearly remember the distinct and wonderful scent that emanated from the kitchen as my mother milled and blended her olive oil, mayonnaise, lemon and herbal potions.

These products worked. When mom died in her mid-70’s, after a lifetime of outdoor work on a farm and endless hours of self-tanning her skin was flawless. My siblings and I do not believe she ever bought at cleanser, toner, moisturizer, night cream or any other type of cosmetic skin care product from a retail store. Mother was a child of the Depression, and as such, she was raised to be as self-sufficient as possible.

My mother also practiced a form of consumer product category jumping. Her homemade cosmetic skin care treatment was rendered from foodstuffs purchased mainly for consumption by our large brood. I doubt Hellman’s Mayonnaise, A&P Olive Oil or the United Fruit company produced their products with cosmetic usage in mind.

There are actually more examples of this type of product category jumping than one might think. You probably have experienced such multiple uses for products in your own experience. A number of specific products actually have seen sales rise perceptibly as a result of usage that differs from the manufacturer’s original intent.

One of the most famous was the well known hemorrhoid ointment Preparation H. This formula was created by the prolific scientist Dr. Sperti. It was very successful for many years and was considered the leading treatment of its day for this annoying malady. Then a funny thing happened.

Women realized that if it worked on hemorrhoids it might work on facial wrinkles. Voila, they were right and a cult-like following grew to believe Preparation H as the best option on the market to fight wrinkles, fine lines and damaged skin. The product had the added benefit of being inexpensive relative to packaged cosmetic and department skin care treatment lines such as Frances Denney, Germaine Monteil and Orlane.

Another crossover star is equally fascinating. In farm stores in rural communities across America there is a need for a livestock product that can treat horses and cattle that suffer from damage caused by thorns, thickets and rusted barbed wire fencing. The leading product in this space is an ointment called Corona.

A number of years ago I first heard from the mother of newborn baby about Corona. She raved about the creams ability to eliminate her little one’s severe diaper rash. She had tried everything, even doctor prescribed treatments to no avail. Another mom told her to drive 60 miles to the nearest Southern States store and buy a tube of Corona. She did. She was wowed and returned within a week to buy out the stores stock.

I decided to check it out for myself. I visited a Southern States store and asked the clerk how Corona Ointment was selling? He stopped and replied that until a couple years ago it sold only to farmers. But then they began to notice mothers of babies with license plates from distant counties buying multiple tubes of the product. The store was often out of stock on what had been a steady, but unspectacular selling niche product.

We use EZ-Off Oven Cleaner to remove mold from our log home. It works great. It works much better than the much more expensive mold treatment products that the DIY stores stock and advertise.

There are many other examples of products or ingredients that jump categories and enjoy cult status. You probably utilize one or more in your home, work or garden.

Entrepreneurs Should Realize There Are Absolutes in Life Other Than Death and Taxes

Wednesday, August 21st, 2013

by: Geoff Ficke

The great Founding Father, Diplomat, Scientist, Inventor and Writer Ben Franklin once so presciently said, “In this world nothing can be said to be certain beside death and taxes”. This most famous bromide has been restated endlessly in every possible venue since the great man first uttered the phrase. It is an absolute of the human condition that is so obvious as to seem almost trite.

I used to utilize the quote myself. As my life, experiences and career has entered their fourth quarter, however, I have expanded on the phrase and the paramount certitude of death and taxes in our lives. Several additional phrases that I have regularly encountered have brought me to doubt their veracity and the trustworthiness of those utilizing the lugubrious language contained therein.

The first is “I am an honest man”. Whenever I hear those five words I put my hand on my wallet. An honest person would never have to state these words in order to confirm their honesty.

Next is when adults imply “It’s for the kids”. Virtually never have I ever heard adults beatifically working for the kids unless there is some benefit involved that enhances their position. Think teachers unions. Think government programs. Think foster parent programs that have become income subsidies. There are certainly adults who rejoice at the opportunity to volunteer, mentor and work with kids. Wonderful people all. However, they usually do not self-promote and seek funds that are really for them and not so much “for the kids”.

Finally, I run when I hear the phrase “it’s not about the money”. I hear this one a lot in my work. When I hear these words, it is in actuality almost always about the money. And if it is not it usually should be.

I am a serial entrepreneur. For many years I have helped inventors, entrepreneurs, small businesses and licensors fund, market and develop a wide array of consumer products. I am always amazed when a prospective entrepreneur states that they are not seeking to profit from their idea but want to help society, employee their neighbors, aid their community  or some other vanity they prefer to the pursuit of commercial success.

Do not get me wrong these are admirable sentiments. But only after success is achieved, profits made and growth occurs. Then the opportunity to dispose of the fruits of one’s labor is an option that can bring wonderful personal and societal rewards.

John D. Rockefeller, Henry Ford, Howard Hughes, Thomas Pew and John T. MacArthur are famous examples of successful industrialists that have been dead for decades. While alive they created vast wealth by driving thriving business empires that employed thousands of people. Their companies prosper to this day. And though long
deceased, their charitable foundations perform inspiring good works in many fields of endeavor such as museums, medical research, cultural entertainment and caring for the less fortunate. Without profit, money, none of these benefits would still be happening today.

I am amazed when a person seeks funding for a project that includes a statement of disinterest in a profit motive. Venture Capital is in the business of profit. The realistic potential for Return on Investment is the tent pole upon which projects are seeded and nurtured to fruition.

Most projects that we review make unrealistic revenue and profit projections on the high side. However, not a small minority seek a funding round with the upfront proposition that the project is about some form of social activism, not the earning of profits. There are other avenues that social entrepreneurs can follow to realize these dreams. But if it’s “not about the money” it is not likely to achieve success.