Know-How Exchange : Strategy

Hi,

I'm new to the forum and I'm just stunned by the high quality discussions. It's been many years since I argued about global warming online in grad school, and my how things have changed. The quality of information here per dollar is really terrific. The trading of points in a "market for information" is a brilliant concept.

I'll start with my questions: Is this normal? What else should I be doing? How do I know when to start moonlighting?

OK, now for some context. Please click on my name and scan my brief profile. I left 6 months ago to grow this business full time based on a product that my wife and I developed and sourced in our spare time over the course of two years. We received lots of glowing feedback when we were aspiring inventors and now it's remarkable to me how much of a push it is to get it into the sales channels. I learned in business school how brand building is slow, expensive, risky work and said "yah, yah, got it, next lesson". Now I'm getting some real education in the street. It's so much easier on paper or working for big companies with blue chip brands already!

Doing the tango with buyers is the new dance I've had to learn. The biggest chain buyers don't seem to want to talk to a one-product company. I can understand, lots of my contemporaries at the trade show were neurotic and naive people with good intentions and wishful thinking. That might describe me too except that I have the production & logistics side down pat. So to overcome the one-product stigma, we (my part time business partner and full-time wife) will have 4 or 5 more (related) products to sell in February '05. To do that, we accelerate deeper into the investment "hole". This is my strategy, for better or worse. It will also help overcome a bad product if our main product turns out to be a dud. (So far buyers like it, not love it). Does this strategy make sense to you? I'd love to be doing focus groups and research but I've gone from Mr. Theoretical to Mr. Get-It-Done since venturing out. The products are what my wife and I think make a nice family of products that "should sell". It's pointless to ask buyers what they want until I have established long-term relationships with them because they'll just blow us off. They're professionals after all. For all they know we're crackpots and their time would be wasted.

There are definately yound companies making money in this industry. All I can see that they've done differently from us is they've hung around for a few years and kept at it.

I've asked our personal and business acquaintances for input and they point us in different directions on product decisions, naming/branding decisions, advertising decisions, etc. Different chain store buyers tell us, "It's too big", "I don't think moms will go to the trouble", "I don't like your prints" and "We already have something in that category that is selling fine". Meanwhile the good news is I'm getting some trial purches from a small number of stores - but WAY short of what we need to survive. I may have one of the majors sign us up for a test program (been saying that for 3 months; more tango). It seems we have to build one block at a time - show the next bigger store that the big store in California bought from us, etc. This is just so damned slow and frustrating. We've spent $15k on a PR firm that has been a waste (however we might get editorial in Parenting next issue, which would almost make it worthwhile alone). Thousands more on trade ads. Couple thousand on direct mail postcards to store owners and to consumers in a DOE test to see who responds the most. (The answer: no one).

When we presented in person at a trade show we got some orders. Now I don't dial the phone. I hate to cold-call. Why would anyone want to hear my pitch? So I hired a sales pro (ex-VP of Sales at a big baby products company) on retainer and that costs a couple grand a month. He's getting us access to the big buyers and that's how we're getting the feedback - mostly that we're a new one-product company so go away until you have some sales data and a product line.

I lack the experience starting up a business so I need some outside perspective. This is so hard compared to my cushy $500 a workday bank job that it's hard to believe anyone makes money at this type of thing. It's got to come around, right? I'm willing to bust my ass every day and believe, but it would be helpful if I could hear someone experienced say it is likely to work out by next year (my mentor says we're moving 2X the speed of a typical startup in the industry). Since I'm so mired in every detail of this business now, I've lost that crisp "birds-eye" view of my value story and business approach that I used to have. It's a teeth-clenching blur now. So, I repeat the main questions and request the favor of a candid reply...

Is this normal? What else should I be doing? How do I know when to start moonlighting?


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AJM
Summerlin, NV, USA

PS: If you want to help our business, put our link on your website please! We have almost zero links to us.