Small Business Labs

Entrepreneurial Artists

Entrepreneur Magazine has an article on artists increasingly selling their works directly and bypass the gallery system.  Key quote:

"...new crop of artist-turned-entrepreneurs who forgo the gallery system by starting their own businesses.  These artists create products--prints, T-shirts, stationery--to sell online, at craft and art fairs, and wholesale to boutiques. They might hook up with a manufacturer and put out a line of limited art toys, or license their designs to other companies."

A growing trend, we call this group next gen artisans and discuss them more extensively in The New Artisan Economy research report. 

Ultra Light Small Businesses

Got pointed to an interesting Facebook group called Ultra Light Startups.  This group is focused on creating online businesses as quickly and as cheaply as possible.  They describe their methods as:

• launching "quick and dirty" proof of concept ventures (websites, Facebook apps, Mobile apps, etc) using outsourced talent, open-source/off-the-shelf software components, virtual/cloud computing services and minimal capital
• Build a prototype on "outsourcing marketplaces" like oDesk, guru.com, eLance, rentacoder, etc and go on to become more legitamate (funded, staffed, etc.) once the market has been proven.
• Share advice and best practices for launching companies.

In our research we see a lot of companies that started using lightweight methods.  Most are online companies.  But we've also see businesses that use ultra light methods to make physical products, and recently profiled two of them - Crit Buns and My Beating Heart. 

There are many reasons why millions of new small and personal businesses are started each year in the U.S.  But a key reason is the cost of starting a business and the capital required continues to decline.   

Maker Faire and Small Business

Maker Faire is one of the most interesting and unique events around.  Put on by Make Magazine, the event is described on their website as a "two-day, family-friendly event that celebrates the Do-It-Yourself (DIY) mindset. It’s for creative, resourceful people of all ages and backgrounds who like to tinker and love to make things."

An estimated 60,000 people showed up this weekend to attend the show and see the 600 exhibits -everything from a giant replica of the old mousetrap game that covered hundreds of square feet, to life sized mechanical dinosaurs, to robotic model warships, to light emitting jewelry.  The big, outdoor exhibits (like the mousetrap game) get most of the attention.  But the halls are filled with lots of interesting crafts, toys and electronics. 

While the purpose of the event is to celebrate people building things on their own, this is also a business show.  I talked to dozens of "makers" who sell their creations and many others that hope to turn their Maker Faire projects into a business.  There were also lots of companies exhibiting who sell tools and supplies to the makers.  While some big corporations were there, most were small businesses. 

In our research we've seen many small businesses that started as hobbies.  The progression often goes from hobby to part-time small business, to personal business, to small business.  Usually the driver to start a part-time business is either someone asks to buy a product, or the hobbyist wants to fund the cost of hobby supplies.  We heard both stories many times this weekend at Maker Faire.

The DIY movement continues to grow.  So does the related craft movement and the related consumer movement we call the emerging buy local coalition.  These combination of these trends is creating new opportunities for small and personal businesses.   

The Artful Blogger Journal

Stampington and Company, a publishing company targetting the arts world, has released a blogging journal specifically for the arts and crafts market.  It is called Artful Blogging and it targets artists interested in blogging as a way to reach their audiences.  I think it also would make a nice coffee table book. 

Basically they are saying that the Internet in general and blogs in particular have become marketing and CRM tools for artists. Quote from their website:

"Innovations in technology provide new and exciting platforms for artists and writers to share their creative work with the world. The Internet has come alive with the voices of artists who let us into their studios and into their lives by keeping online journals, galleries and blogs."

This is another sign of growth in the arts and crafts industry.  I recently posted on the size of the quilting market ($4 billion in the US), and it is my least read post of all time.  Despite that, we will continue to research and cover the arts and crafts industry - hey, the craft industry is clearly growing, there are a lot of people making a living doing this stuff, and almost all of them are small business people:).  Besides, I like crafts - including quilts. 

I saw this on the Craft Boom blog. 

New Artisan Interview - Multi-Prenuer Joe Gebbia

Joe Gebbia is a 20 something new artisan multi-preneur.  He has founded or co-founded three different start-ups and works on all three at the same time.  His firms are:

CritBuns: manufactures fashionable, portable seat cushions that make it easier to sit comfortably for long periods of time.  Joe is the founder, CEO and only employee at Critbuns.

Ecolect: a library and community site on sustainable design.  It provides the tools and resources to make it easier to design and source sustainable products.  Joe is a co-founder and president of Ecolect.

AirBed and Breakfeast:   allows people attending events to share housing, save money and connect with others at the event.  Joe is one of three co-founders of AirBed.

I had a chance to catch up with Joe recently and talk to him about his businesses.  Here are the highlights of the interview:

How big are your companies?

CritBuns is really just me.  It started as a school project while I was at the Rhode Island School of Design.  The product proved popular and I am selling CritBuns all over the world now (see this USA Today article featuring Joe and CritBuns). 

Ecolect and AirBed are team efforts.  I found working on my own hard.  There was no one to bounce ideas off of and no one to get feedback and input - no one to critque my work.  I missed the team environment I had at school.  So I wanted to be part of a team again and had the opportunity with both Ecolect and AirBed.  Ecolect has 8-10 contributors spread out around the country and even several contributors outside of the US.  AirBed also has multple contributors, but most are here in SF.

How do you manage distributed work teams?

It is pretty easy to do these days.  We use Skype, Google Docs, Basecamp, email and texting to keep in touch and manage our work flows.  We recently started using Google sites as an intranet.  With the technology available today, it is both easy and cheap to manage remote teams and work flows. 

How did you end up with 3 simultaneous start-ups?

It was really an accident.  When I started designing CritBuns I wanted the product to be as environmentally friendly as possible.  To do this I had to do a lot of searching and hunting for sustainable products and suppliers.  I realized there wasn't an online community and content site focused on helping designers create sustaninable and environmentally friendly products.  So I started Ecolect.  AirBed just seemed like a great idea so I wanted to be involved. 

It isn't very expensive to start a business these days - especially web based businesses.  This makes it pretty easy to do multiple start-ups.  Even CritBuns, where we make a physical product, isn't expensive to run because I outsource a lot of work and most of the marketing is web based. 

Do you have any advice for potential entrepreneurs?

First of all, if you want start a company just do it.  Get started, get moving and just do it.  Also, if it is web based it doesn't have to be perfect when you launch.  You can fix things as you go along.  Get going, get it out and get feedback from real customers. 

 

Artisan Manufacturing Interview - My Beating Heart

Had an interesting online discussion with Yury Gitman, the owner of the artisan manufacturing firm My Beating Heart and the consulting firm Banana Design Lab.  They manufacture a plush heart-shaped pillow that gently beats out a slow, but naturally-changing steady heart-like rhythm.  The product is designed to help children and grown-ups to nap, daydream, meditate, and relax.

According to their website:

"My Beating Heart employs new advances in computer science, Artifical Intelligence, and haptic design. But we also developed the technology inside each Heart by combining the practice of meditation and yoga with software and hardware development. This lead us to design a small micro-computer to run of out specially made software."

Over the last couple of years Yury has made the shift from being an artist to becoming an artisan manufacturer.  He kindly spent time answering questions I had on his business.  Here are the highlights of our interview:

How big is your company?

Basically, we are very small.  When I say "we" I mean "me."  I contract or skill-trade with a small team of very talented engineers, designers, and marketing type people.   I also have a handful of amazing interns.  So the company can have many hands and hats.  We are also signing up some sales reps, so some sales are being "outsourced."  As far as traditional "outsourcing," only the manufacturing is outsourced.

How do you do your manufacturing?

From my experiences there are three ways to go about manufacturing toys and artsy or techy goods. The first is do it all yourself domestically.  The second place is an overseas factory.   To go overseas, you can contact factories directly. 

The third option, which I do recommend for small start-up operations, are factory agents.  Like real estate agents, factory agents (should) know the terrain and have a stable of factories to source for your designs. The good ones will help you along the whole process and will do a lot of hand-holding.  A good agent can allow a 1-3 person operation to manufacture goods as if it's a much much bigger company. I've talked to successful companies who design on their kitchen table, and 8 months later are shipping toys all around the world. So a good agent can work wonders for small companies.

One thing to remember about agents, they are not all great.  Most are not great.  There is a whole industry that feeds on people's hope and dreams.  Every factory and agent wants your business and they will ALL tell you they can make your designs.  It's like hiring anyone, make sure they are available, can be reached easily, and have relevant experience.

How about marketing and distribution?

Our website so far has been the core of the business, but it's starting to move into brick/mortar retail stores. We just did the Toy Fair, and picked up some gift stores and are talking to more.  But if
it wasn't for the web, I wouldn't be here talking about this. 

What about marketplaces like Etsy or eBay?

Etsy and eBay are great market places that have traffic and flow.  But I think it makes sense to start developing your own little piece of cyber real estate because it just give you a different type of legitimacy in the eyes of customers and wholesale (retail store) accounts.

Do you have any additional advice for artists and artisans that are thinking of becoming artisan manufacturers?

If an artist/hobbyist is interested in transitioning to be more product/market focused, I'd tell them to learn to be an entrepreneur.  Moreover,  they should enjoy the entrepreneur side of it, enjoy learning all about it, and enjoy talking to everyone they know about it.  It's not about making money for it's own sake, but about understanding how to distribute their work to their patrons.  If they are not truly interested in getting multiple copies of their work to an audience this isn't the path for them.

Quilting is a $4 Billion Industry in the US

The CBS News Sunday Morning show recently had a 7 minute long segment on quilting.  And if you like bad quilting puns, this video will leave you in stitches (click on this link and then look for "Quilts for Sale"). 

According to the report quilting is a $4 billion industry, there are 27 million quilters in the U.S., and about 55,000 showed up at a big quilting show in Houston.  Quilting even has celebrities, with Ricky Tims apparently being the biggest, and TV shows.

My favorite part of the story is when they talk about a $18,000 computer-aided sewing machine.  This machine provides quilters with the ability to produce multiple copies of a quilt design.  Very cool and a great example of technology enabling small artisan businesses.

I first heard about this on the Patchwork Pearl blog, which pointed out:

"Many opinions are out there on this one, but from my (business perspective), it certainly raised the profile of this booming industry.  I think that pieces such as this help professionals remember that there is a big pie out there."

Quilting is yet another example of a next gen artisan industry.

Japanese Artisan Manufacturing

According to an article in The Economist, small businesses (less than 300 employees) employ about 70% of the Japanese workforce.   Small businesses also account for about half of Japan's manufacturing output by value.  The article talks about the pressures small Japanese manufacturers are facing, but also says the successful firms "combine technical acument with innovative business practices to carve out niches. 

Interesting quote from a manufacturer of industrial components:

"“We want to do business like a sushi bar: the customer is right in front of you, orders different things, and a highly skilled artisan makes it right away,” says Masahide Satoh, a senior manager at the firm."

Great description of next-gen artisans and mass customization.

Mass Customization, User Manufacturing and Small Business

I traded emails with mass customization guru Frank Piller this week on the topics of mass customization, user manufacturing, next-gen artisans and small businesses.  Dr. Pillar is a researcher, author and speaker on mass customization and open innovation.  He is a professor at RWTH Aachen University and is also a founding faculty member of MIT's Smart Customization Group.   He has a great blog on this subject - "Mass Customizaton and Open Innovation News". 

Frank pointed out that while large corporations have the capability and scale to offer mass customization, they often struggle with the change management processes required to make the shift from being mass producers to mass customizers.  This is where small businesses have the advantage.  They are close to their customers and have an almost "built-in" customer centricity. 

We also discussed his concept of "user manufacturing" - new infrastructures that are enabling average users to become manufacturers.  Frank pointed me to three custom t-shirt companies -  Zazzle, Cafepress, and Spreadshirt  - as examples. 

In our work we often see examples of user manufacturers that turn their interests and hobbies into small businesses.  It is interesting to see a continuum of manufacturers developing - from end users to small and personal manufacturers to big companies. 

For more information on user manufacturing (including his post on our report), take a look at the user manufacturing tag on Frank's blog.  There are a whole bunch of posts and a lot of great information. 

Artisan Cheese Makers

The Boomtown USA blog has an post on the growth of U.S. artisan cheese makers, who make limited amounts of cheese using a high degree of handcrafting.  Quote on the growth of artisan cheese makers:

"In the first year that someone bothered to count these chees producers in 1990 there were 75.  In the count in 2006 there were over 400."

There is even an American Cheese Society promoting aritsan cheese makers. 

We've posted in the past on the growth of small farms, local food and the emerging buy local coalition.  It comes as no surprise given these other trends that small cheese production is also thriving.