Small Business Labs

The Rise of Handmade Bike Manufacturing

Barron's The $22,500 Bicycle covers the growing demand for handmade, customized and high end bicycles. The title refers to an expensive custom bike made by bike studio Signature Cycles - and yes, it costs $22,500.

Of course most custom bikes are a lot cheaper than $22,500.  Prices in the $5,000 to $7,000 range are common and entry level custom bikes can be found in the $2,000 to $3,000 range.  

The demand is coming primarily from aging baby boomers and Gen Xers with disposable income who have discovered biking is a great, low impact way to get exercise that also provides sustainable transportation.  

My favorite example from the story is bike frame maker Richard Sachs. Key quote on this artisan maker: 

Today’s base price for a Sachs frame, which is all he makes, is $4,400, exclusive of the $400 fee required to put your name on his list. For that privilege, customers wait up to eight years. 

The handmade bike industry is large enough that it has its own trade show with hundreds of exhibitors. This year's show had 22 new handmade bike companies that exhibited at the show for the first time. Most of these are very small shops or solo bike artisans.  

One of the new exhibitors this year was A*Train Cycles, a one man shop in Minneapolis. One of their bikes is pictured below. Not surprisingly given their location, it's a combo mountain-snow bike.

     

One of the leading cities for artisan bike manufacturing is Portland.  It's the most biking oriented city in the U.S. and home to many artisan bike manufacturers. 

But this trend is not limited to the U.S. According to the BBC, handmade and custom bike manufacturing is also growing in the UK.  

The growth of handmade and customized bikes is a great example of the growth of small manufacturing and new artisan economy trends.  

The Rise of Artisan Distillers

The broader food movement, and in particular the local food movement (referred to as the locavore movement), has led to celebrity chefs, a rapid increase in farmers markets, the rise of urban farming and the growth of craft brewers.

So it comes as no surprise that artisan distillers (craft makers of spirits) are becoming more numerous. 

I attended a Commonwealth Club meeting tonight that focused on Bay Area craft distillers.  The description of the event was:

Bay Area craft distillers like St. George and Charbay drive the handcrafted cocktail scene, creating community-conscious and drinkably delicious products that pay tribute to the locavore spirit. Their hyper-local beverages compete with the top foreign and national brands on drink menus across the country. 

It was also no surprise that the owners of these small, local distillers described their businesses much like other new artisans do.  They talked about being authentic, making great products and finding a niche audience for their specialized offerings.  

They also described their industry as having a barbell industrial structure (my words - they said it was dominated by a couple of soulless, money grubbing giant corporations that made mediocre products).  

The meeting was followed by a tasting from a group of local distillers.  My favorites were two gins - Terroir Gin from St Georges and Blade Gin from Old World spirits.  

Both were unique and I've never tasted anything quite like them before.  Go to their sites for their tasting notes.  They do a much better job of describing them than I can - especially after tasting multiple products from 5 distillers.

The NY TImes on One-of-Kind Gifts

The New York Times article On the Web, Workshops to Create One-of-a-Kind Gifts covers the many sites that allow consumers to customize and personalize products.  Key quote:

"Easy customization of so many products is possible because technological advances on the Web and in digital printing have made it possible to create one-off items for much less money than it used to take."

The article reports that the customization sites report sizzling sales this holiday season. 

Maker Faire and Small Business

We attended Maker Faire over the  weekend.  For those not familiar with Maker Faire, it is billed as the largest do-it-yourself festival in the world and is sort of a cross between a state fair, craft show and a science fair.   It is sometimes goofy, often strange and always fun. 

We spent most of the time interviewing makers to better understand how the DIY movement is related to small business.

Not surprisingly, most of the exhibiting makers owned or worked for small businesses and their exhibits were designed at least in part to market their goods and services.

The 2nd largest group was educational groups, most of which were non-profits of some kind.  The third largest group were clubs.

There were few independent, hobbyist makers exhibiting.  This, of course, makes sense given the effort required to be a exhibitor. 

Lots of cool products, inventions and ideas.  And lots of people turning their passions, or hoping to turn their passions, into small businesses.

We will provide more details on our interviews in the near future. 

Artisans Driving Economic Development

The EDPro Weblog has a post referencing the growing role support for local artisans is playing in rural economic development. 

The post highlights an effort by a group in Northwest Arkansas to promote the region's artisans, crafts people and performing artists.

We've posted multiple times in the past on the growing trend towards promoting art and artisans as part of economic development efforts. 

This trend is not limited to rural areas.  Cities such as New York, Chattanooga and Portland and many others have active economic development programs focused on attracting and helping artisans.   

The Arts Produce Jobs

A lot of attention has been focused on $50 million of funding included for the National Endowment of the Arts (NEA) in the house stimulus package.  The Wall Street Journal even highlighted it in an editorial on the stimulus package. 

Hopefully the role of the arts as a creator of jobs will not get in lost in the debate over the stimulus package.  According to an NEA study released last year, as of 2005 almost  2 million Americans identified artist as their primary job.  The chart below is from the study and provides details. 

         

This means there are more artists in America than doctors, lawyers or agricultural workers. 

There are also roughly 3 million people working in jobs to support the arts and artists.

We've been following the growth of artist/entrepreneurs for several years and have posted on the topic quite a bit.  And one thing we've learned is the arts produce jobs.

The Artist as Entrepreneur

The New York Times article Transforming Art Into a More Lucrative Career Choice covers several trends driving the growth of successful artist-entrepreneurs. 

One of the trends covered is art schools increasingly adding business courses to their curriculum.  An example is the Ringling College of Art and Design, which has both majors and minors in "the business of art and design."  Great quote from Ringling Dean Larry Thompson:

      "I am committed to destroying the myth of the starving artist."

Another example is an Artistic Entrepreneurship class developed at the University of North Carolina. 

We've been researching artist entrepreneurs with a focus on identifying common business success factors that entrepreneurial artists share.  The NY Times article includes a reference to this research.

Over the next couple of months we will be posting on our research findings.

Cowboy Art and Artisans

Sheridan, Wyoming describes itself as a place "where the Old West meets the New West - a pocket of world-class culture wrapped up in a hometown hospitality and authentic real West charm." 

And according to a research report by Regional Technology Strategies, the area around Sheridan is also home to over 1000 people who work in the creative arts.  This is roughly 6% of the area's workforce. 

Lot's of interesting information in the report, including:

• 75% of the creative artists are self-employed
• More than 75% work from home
• Over half their sales are outside of the local region

One finding that caught my eye was that the Internet is not a significant source of source of business for the artists and that only a few had online sales.  Another finding of note is that most of the artists considered their art related activity a business instead of a hobby. 

Sheridan's involvement in the arts goes way back.  Buffalo Bill auditioned acts there for his traveling Wild West show.  And like many small towns, artists and new artisans are playing an important and growing economic role.   

Touring Wisconsin's Artisans

The Boomtown blog has a great post on artisan tours in Wisconsin.  According to the post, in Wisconsin you can visit:

• 116 different artisan cheese producers
• 60 orchards
• 116 maple syrup boilers
• 26 small vintners
• 25 artisan brewers

It also turns out that Wisconsin produces over 95% of US ginseng root exports.  No word on how much Wisconsin ginseng root stays in the US. 

Artisan tours have grown in popularity across the US.  Many small towns, counties and regions use them as part of their economic development programs to raise awareness of locally produced goods.  They also promotes tourism.  The post mentions Handmade in America, a non-profit that:

"was founded in 1993 with a belief that economic revitalization wasn't necessarily tied to luring "modern" industry to the region but in making known the hidden heritage and craftspeople that are so vitally a part of Western North Carolina."

The growth of artisan tours is part of the broader trend towards locally produced goods, which is #5 on our top 10 small business trends list for 2008.

Picture from the Seattle Times.   

The Business Traits of Successful Artist Entrepreneurs

I recently posted on the American Express Open Forum blog on the trends that are creating new opportunities for entrepreneurial artists.  I used illustrator Claudine Hellmuth as an example of an artist taking advantage of these trends to build a successful small business. 

Hellmuth is a great example because her business shares many of the traits we see from successful artist entrepreneurs.  These small and personal art businesses generally: 

1. Leverage technology:  Hellmuth uses a mix of social media and online technologies to market her work.  In addition to her website, she has a blog, an Etsy site, YouTube videos and a Yahoo group.  She also actively participates in arts and crafts community forums and chats.  Her use of technology allows her to greatly broaden her potential market and she sells her work across the US and internationally.

2.  Have multiple revenue streams:  In addition to her illustration work and collage art, Hellmuth has written two books, gives workshops, sell DVDs on collage art and has several licensed products.  Having multiple revenue streams is common among successful artist entrepreneurs who often use digital technology to re-purpose their work and expand their market. 

3.  Make use of outsource services:  Hellmuth uses Etsy for online commerce, Paypal for payments, Amazon for book sales, and licensing arrangements to create products.  All of these services amplify her ability to run a successful small business.

4.  Understand the importance of the business side of their work:  While first and foremost an artist, Hellmuth spends over half her time on business issues and realizes business and marketing skills are key to her success.      

With consumers increasingly looking for unique, one-of-a-kind and handcrafted products the market for artisans continues to grow.  Business-oriented artists, craftspeople and makers of all kinds have new opportunities to turn their artistic talents into commercial success.