These points mainly apply to those start-ups with angel or venture capital funding. Which, let's face it, does not include many creative studios.

But it's still worth taking five minutes to hear what's said. In a later post I plan to reinterpret this for our own kind of small business. For now though, this advice is useful and at times quite thought-provoking.


The Entire Video of John Doerr Giving 10 Tips for Start-ups to Avoid the Econalypse

...it's time to realise that the work you produce IS your brand - you can't just put expensive lipstick on a pig (or a poor product) and expect to make it into anything other than a pig. As someone somewhere recently pointed out.

You'd think it would be blindingly obvious to say that when you're in a creative business the first and foremost matter you need to focus on is the quality of your product. If you're a musician, are your performances/recordings good enough and original enough to draw a following? As a writer, how do you stand up against the best around in your field? If you are an artist, do your images stand out, are they beautifully realised and emotionally moving, do they have the kind of meaning that audiences respond to? And - close to my heart - if you design products, are they distinctive, well-made and both fit for purpose and desirable? Do they last and give pleasure beyond the first flush of ownership?

All the time I see discussions - on blogs, forums and other on and offline venues - in which presentation, branding and promo/marketing are the focus and the actual product is ignored. Maybe this is because I mostly follow design and craft conversations - perhaps it's different in music and literature (if so, I'd love to hear your comments and experiences). But again and again I read and hear advice telling people to promote more, take better photographs, work on their logos and brand style, think more about their packaging... almost anything but "look again at your product".

Is this because it's hard to critique someone's work without causing offence? Yes, to a large part this may explain it. It's a lot easier to tell someone that their photos are poor than to tell them that the world really does not need, for instance, yet another piece of badly made beaded jewellery. But I suspect it's also because we live at a period in the world's history when presentation really has taken precedence over content and substance. You see it everywhere - from the US Republican campaign decision to run with Sarah Palin because of her "story" to the belief that what many countries need right now is not so much real change as a rebrand - hey yes, that'll fix it.

But maybe, just maybe, we're coming to the end of this odd obsession and swinging back to placing more value on the thing in itself, rather than the way you show it and market it. If so (and I hope it's so) then it's a particularly good time to look at what you're producing and ask yourself how you can improve it. Simple, obvious, but now more true than ever.

Because enjoying a small piece each day is far better than bingeing through the whole box of tricks in a single session.

Marketing and promotion needs to be a habit that you do, almost without thinking, each day. A great big advertising push followed by nothing for months is particularly useless on the web, where everything gets out of date so fast.

Marketing works best when it's something you actually enjoy, rather than a chore you have to force yourself to perform. I suppose that should be obvious, but all the time I hear writers and designers complain that they want to do their creative work, and only put time into marketing because it's necessary. Many people even seem to see their hatred of marketing as a badge of creative authenticity.

Well, if you want to loathe doing your marketing and communications that's up to you. But as it's got to be done, it's surely better all round to make sure that it's an activity you actually enjoy.
This is more likely when:

• It feels authentic. No-one enjoys either doing or receiving "hard sell". Just do the kind of promos that you honestly do relate to and that feel like the real you, even if it seems quite gentle stuff compared to the blare of some of the big brands.
• It's interesting. I'm not suggesting you jump all over the place and try everything. But sometimes doing something you haven't done before is more fun than "same old, same old". Today I made my first ever Facebook ad. A modest little thing to be sure (there's not a whole lot you can do visually with a Facebook ad - well, maybe I haven't come up with anything more dramatic yet) but I'm genuinely excited to see how it does. It's energised me.
  
• It's not too much of a strain. Don't force it to the point where it's exhausting. Do something small each day and go on to some other activity (like your main design/writing/music/art work) once the marketing stuff stops being fun.
• It's creative. You don't have to ape the big brands to be an effective marketeer. In fact it's usually much better if you do something that's fresher, different and more "you". Find a tone or a style or a format that isn't the same as everyone else's. Use your imagination and your ability to make something new and distinct.

I've just been reading yet another post on the Etsy forums about Chinese manufacturers. Of course, it's fine to criticise people selling items that are not handmade (in Etsy's terms handmade means also hand-assembled, hand-altered but still, pure factory-made does not qualify). But what makes me wince about these threads is how quickly they degenerate into racism and excuses for not buying from "them". Although on the upside, it's reassuring also to see how many people recognise this and counter it.

The basic arguments made by the anti-China lobby always focus on four accusations:

• It's crap - stuff made in China/Asia/overseas is all rubbish. 90% of the time if you check the Etsy shop of the people saying this you'll find they are using Chinese components/fabrics/material in some of their work.
• It's dangerous - "these people" put lead in children's toys (er, actually if you read the Mattel case you'll find that it was at least as much the fault of Mattel as the Chinese manufacturer).
• It's immoral - "these people" make children work in sweatshops. Yes, there are sweatshops in Asia. There are also sweatshops in London and New York. Many of the modern Chinese factories have good worker conditions.
• It's unfair - "these people" are taking "our" jobs. Hey? What makes you think the West has some immutable right to the jobs? And isn't global trade creating jobs also?

I understand these points. I am even in a way sympathetic with the confusion, defensiveness and sheer fear that's often at the base of the attitudes shown. There is some truth in some of the accusations - but some of them could be levelled at other countries too, and in the rants I've been reading, there is usually a lot of exaggeration and generalisation based on anger rather than logic.

But without going into a whole long argument about all this, what I want to say is that if you're running a small, creative business and feel angry and threatened by "overseas" producers, you really need to get over it. For the sake of your business quite apart from your peace of mind.

Globalisation is not going to go away, it's going to increase. The internet makes global communication hugely much easier than it's ever been. Xenophobia, protectionism and racism are not only nasty - they aren't viable and they don't work (you can read one of my earlier posts on this if you'd like to - and I'm sure I'll post on this topic again). There is no moral superiority in only buying/trading with your own local area or people of your own nationality or race. The only argument in its favour is one of saving resources on shipping etc, and even that argument is by no means all that clear.

Open up. Embrace the rest of the world. Learn to work with it - by sourcing materials, work and other things you need from the best place to find them. Learn to work for it by selling all over that same world - nowadays it's not just your home-town or your country that's your market - it's anyone, anywhere who likes what you do.

Of course you should apply your code of ethics to this - we buy from people we feel comfortable with and we get as close as we can to the actual makers of anything - it doesn't guarantee that no sweatshops are involved, but it makes it much more likely that we'll spot them and be able to take avoiding action. You should also make sure that your creativity and quality is enhanced, not undermined. While I have no objections to people simply buying mass-produced products in Asia and reselling them on a shop or website, that's not designing. If you're running a creative business, which is what this blog is about, then use the resources of the world to enhance and support your own, unique creativity.

I'll no doubt post much more on this. Meanwhile, I have to leave myself a note that tomorrow I need to chat to Mr Hau - who runs the Vietnamese workshop that we are now using for our "base" bags - about the beautiful scarves that he's just offered us. We may perhaps be able to adapt them to an idea I've had - so that not only will they be more gorgeous, but also more original.

This man knows his fabric, and his sewing techniques and is enthusiastic about his work. He's just like "one of us" in fact.

When things are going well, or even when they just begin to look up, you're going to find some people who are jealous, spiteful or - and this is more common - simply uncomfortable with seeing you taking risks that they have avoided themselves.

We're all human and we've all felt envy for others, or wanted to hold them back in our own safe world instead of watching them move out into something broader and more risky. I'm not saying that someone who does that is bad or malicious or even necessarily all that conscious of the way they're trying to hold you back. I'm just saying that it happens and it's a hazard to look out for.

Year ago, I formed my own unofficial, independent little group of user-interface designers right in the middle of one of the major tech research labs in the UK. At the time I just wanted to get on with some decent work with good people. Nowadays, I recognise that I did what Seth Godin would describe as building a tribe. The tribe we made in that place was amazing - for a couple of years we did remarkable work that changed things. It's notable how most of the people involved went on to quite glossy design careers. We learned, we worked - with passion and fascination for what we were doing - and we did things beyond what any one of us could have done alone. In work terms, I still look back on it as one of the most productive periods of my working life.

So how did people at "the Labs" (I won't give the actual name of the corporate but if you know the telecoms industry in the UK you'll easily guess) respond to this? Well, to my surprise at the time, they mostly criticised, challenged, tried to form their own carbon-copy competing groups and, in the end, managed to have us dissolved. They took a brilliantly functional, efficient and innovative group and - deliberately destroyed it. Makes them sound horrid, yes? Well, they weren't. There were some genuinely nice, well-meaning, clever researchers among them. But they saw the building of something that not only didn't fit, but that also worked amazingly well - and their reaction was to tear it down. That's not uncommon.

Noticeable success - especially if it's done in a whole new way that doesn't "fit" - can be threatening. Many people will react to that by throwing hurdles in your way -and occasionally worse. Your fun and your satisfaction may be someone else's threat.

So - decide now that as your small business grows and thrives (okay, maybe slower than it would without this financial crisis, but let's be confident and say that it will thrive) influence from people who want to prevent your success, even for the most well-meaning reasons, are not what you need. Learn to avoid them. If you actually work with them or - God forbid - they are family members or close friends - learn to ignore them.

I just read this on Seth Godin's blog

"The media and the tech blogs glamorize businesses that act big. They write about the big checks VCs hand out and they lionize the organizations that make a splash. The untold story is in the organizations that are close to the customer, close to the product and close to each other. Thinking small always pays off."

It's well worth reading his whole post.

I used to worry in London about being too small - at its largest my company employed 35 people. Now quite frankly I will be worried if we ever employ more than six (right now it's us two and Halina employed part-time). Small can be great. Collaboration, co-operation and focusing on what you really know how to do with excellence is the way to go.

Today I got up feeling better and more energised than I have for a few days and settled down to plan our bags for the next six months or so:

• I counted a final 2042 tarot bag prints - which have taken a month to produce. There are more than 100 images in all and it was a lot of work. But exciting.
  Never before have we done even as many as 200 bags in a batch, but by working this way we think we can considerably cut costs and so keep final prices down. This will be important next year. But doing so many at once has felt slightly crazy. Maybe it's another sign we are growing up as a studio.
  
  
• I designed a new wearable pouch. More on this over the winter but the intention is to go ahead quickly with this one as it will be beautiful, useful but also priced well below $30. Again, this is the result of thinking for a couple of months now about how we can offer some very affordable designs while actually improving quality. It will very quickly be available in ALL the tarot bag prints too. This is good I think.
  
  
• We discussed Alice, animal toile and other cushions. Now whatever we do, these can't be low prices - though they will be way lower than, for example, cushions like these - and I think at least as good in design and quality. But we have done what we can and now we will go ahead with a smaller batch than originally planned, just to test the water. They are gorgeous, quirky and special. I think we'll be fine with these.
  
  
• We confirmed the way we want to go on the shoulder bag saga. For nine months now I've been trying to produce a new shoulder bag to have in addition to our current one. Finally we are getting there though this one has been a continuous story of two steps forward, then one back. Now at least we have an agreed plan.

Two takes from this:

1. Find ways to keep your costs down. I've said it before and I'll probably say it endlessly through this "crisis". At the same time though, don't drop your quality whatever you do.
2. Think about new products that provide really great value. Use your creativity and your abilities and see what you can come up with. Test out your ideas and then - get going.

I came across this on Fred Wilson's blog. I admit to a caution about VCs based on some of what I saw in London in the dotcom boom and bust but his blog is a good read and I find that I relate to many of his opinions and attitudes. I suppose at heart I'm a liberal capitalist - more or less.

Anyway, although this advice is aimed at the kind of company that incubators take on - start-ups that are expected to grow rapidly and maybe IPO or be bought out, it's also relevant to the enterprises that this blog is focused on - small, personally-run, creative companies that aren't particularly interested in getting huge and corporatised but intending to make a decent living.

Here is the piece in full with my take in blue -

It's counterintuitive, but during an up cycle people accept conventional wisdom, and during a down cycle people challenge it. That's good. Very good. And the cycle will winnow competition.

A lot of what we were told was "true" about market capitalism turned out to be a mirage. It feels like the world turned upside down. Scary, but also thrilling. Now is a great time to think outside the box. NO - in fact, don't even THINK of corporate terms like "outside the box". Think quirky, think outrageous, think of what you dream of. Think "why not?". What we were told was "silly" may not be at all. Think daft and think hopeful.

"Yes we can" Okay, that's a modern cliche now, but you know, there is a whole world shift going on that's about daring to do what you thought was not possible. It's in the air.

And if you need to make cuts, make them now. Don't cut 10% now and then another 10% early next year -- make the change in one fell swoop. Piecemealing your way through change kills momentum, hurts culture and the team and is a chickenshit way to run a business.

Yes, this is just good sound advice. But it's something that's easy to ignore because at difficult times, it's easiest to deny and put off. Personally, here at Baba Studio Headquarters (hold on a second while I move the cat off my desk) we have been cutting swathes through some of our plans and reconsidering others. If something has to go, it should go now.

There will be a flight to quality; this always happens. But this time I think it's going to be more than that. For TV and print this has been an unusual year: The shift to online has been stemmed first by the Olympics and second by the election. But year-over-year growth in ad spend has been down across the board (see slide 32 of the sequoia deck, linked below). Expect the next year to be ugly and different. I think spend will move online, very fast, and print may right downhill. And people will look for ROI -- real measurable results. Monetizing social media is hard. Much to do here, much money/share to make/take.

There will also be a flight to individual and meaningful - and simply gorgeous. And lasting. Especially lasting. Now that might sound totally naive. I know that financially people will rush to quality in monetary terms. Quality like Lehmann's and General Motors and...
See what I mean? In a world where it won't be at all clear what's stable and what's not, there will be a desire for products that don't have that depressing "this looks fine now but it's poor material and poorly made and I know it'll look awful after the first wash" feel that many chain-store items do. People will want something that has some material and emotional quality to it. Small and medium-sized (and micro) businesses are in a much better position to provide this. With authenticity.

Openness. I think this cycle is going to drive another significant shift in how open and interconnected the Web is. This is good news for you, and this is bad news for the Facebooks of the world, who tried to replicate the walled garden strategy of Web 1.0.

Think about what happened through the last cycle. Start with AWS. In the 1990s, Internet companies had to own everything top to tail. Today you can use Amazon and other services to pop up a new box for hundreds of dollars, if that. Thats a huge shift, and it's also a shift towards interdependency.

We are all now dependent on the Amazons of the world for parts of our infrastructure. I think this turn of the cycle is going to drive a lot more openness. This in turn ties to the market figuring out how to rapidly establish bottoms-up standards. This is about working with others and figuring out how to do things without having to do all the work.

As a very small business or start-up, you have to use what's out there. We are looking more and more to building a very good, personal relationship with one or two workshops. Our graphics and printing we do ourselves (how terribly uncorporate of us to be so picky, but the quality of the images and printing is everything to us). But our sewing is being done by a few places that we like and trust.
More broadly, we're using everything out there for blogging, showing off our pictures, building our shops and so on. When you're a very small business, you have great flexibility in trying out all sorts of services quickly and then deciding to run with them or not according to your experiences. Large business has far more trouble with doing this in a meaningful way.

Main piece by John Borthwick.

Weird week this week. And that's just HERE never mind the DOW and the FTSE.

Anyway, I had a burst of energy and tidied up some of our websites. I can't decide if putting a large Etsy display on our Victorian Romantic site is too commercial. I hope it isn't just a sign of mild panic. But it did seem like this might be a good time to make sure that people at least know we have a shop. This after two enquiries this week:
1. About if we have plans ever to do a tarot deck (this from a really lovely Etsy buyer)
2. If we wholesale our "deck" - singular - from someone who found the Victorian Romantic site.

This tells me that if I can get the network of links working better it will be both more useful for customers and generate more business for us.

But IS this going too far? I'll think about it more this weekend.

Yes, I know that there is not enough money in the WORLD to pay off the derivatives market. I know that Will Hutton is right when he says that we are sitting waiting for the approaching hurricane to strike, and all we are feeling now is the head-winds.

But.

But when money tied up in debts has become so crazily virtual that it no longer has any meaning, then I actually think it may end up having less real power to hurt than we think. Is that naive and ridiculous? Probably, and I'm not enough of an economist to put this argument coherently. But my hunch (and I tend to be good at hunches) is that this is a hurricane that will miss the levees, and veer off to dissipate itself relatively harmlessly.

Meanwhile, we make more bags. LOTS more bags, because we believe that they will be wanted. When you're talking gadzillions of trillions, what's $22? I think many people will have much the same attitude.

There, I made myself type that phrase, "financial meltdown". I'm not sure if that's what it's going to be - which is I suppose an inane comment as who is sure? But assuming that whatever happens, things are going to get worse not better economically, here are some of the ways that it's better to be running your own business than working in a large corporate at a time like this -

You have control and know the real facts and figures about turnover, profitability

You can change things quickly. Far, far more quickly than any large company can

You know your customers better - and are much more genuinely connected with their needs and choices

You are not saddled with huge overheads and debts.

On that last point, if you are going to start a business now, by choice or by part-necessity, whatever you do don't take on debt. I'll post more about that.

I began my first business - more than ten years ago now - because I was sacked. I was sacked partly because I didn't know the rules of small companies (having just moved from a large corporate) and partly because the person who wanted my job - and for a time, got it - was a brown-noser par excellence and pretty unpleasant with it.

I don't feel at all defensive or embarrassed about being kicked out. What I do feel a little ashamed of is that the truth is that without that, I may not have had the guts or will to begin my own business. I used to think how wonderful it would be, but I could never summon the courage. Only when all seemed lost (it wasn't of course, but it seemed that way for a couple of days) and I realised that in fact I had a lot of the basis of a business already in place - then finally I took the jump.

Whatever the reason, being sacked is traumatic and can leave you feeling vulnerable and lacking in confidence. Nowadays, even if you know the rules, do not have a colleague shoving knives in your back and no matter how well you are doing the job - you may be fired. Things - let's face it - are not looking so good now, particularly in the more recession-sensitive fields.

If the worst does happen, put the situation to the good and consider the possibilities of beginning your own business. USE the trauma to shift yourself outside your normal comfort zones.

Okay, for some reading this it will just not be practical - perhaps you need a secure income, in which case a new business in a precarious climate is not such a great move. But if you have flexibility, maybe a bit of redundancy package or some existing clients or some established reputation in a creative area, now may be the time.

Assuming that we are at the beginning of what may be a long-term economic downturn (and not going into all the ifs and buts and interesting consequences of that) here are two simple steps to take right now.



Look at your costs
Can you find ways of buying your supplies more cheaply without compromising quality? Can you cut down on expenses that aren't necessary? - maybe using Skype more rather than landline phone-calls, making less short trips, turning down the thermostat a bit? I know these things are all boring, but they add up.

What are we doing? Well, mainly we are busily switching most of our actual bag sewing to an Asian workshop that we like - they do beautiful work. The small workshop that we've worked with for some years here are being partially closed down in any case (owner - a fashion designer of some repute here - is retiring) and we have more than enough "special" work to keep Romana, our main sewing colleague, as busy as she wants to be.
More on the pros and cons of sending work out of the country in another post.

Look at your prices
I'm not going to suggest that you slash prices as sometimes that's quite disastrous. Depending on your margins, even a modest reduction in your retail cost could, in theory, halve your profits. So be careful about suddenly going into "fire sale" mode. I'll do a post soon on pricing but for now, my advice would be to look at the spread of pricing. In times when credit is tight, you may well find that some people are still happy to pay reasonable prices for quality, but others may be looking for smaller, inexpensive things either for gifts or simply as little treats for themselves. Can you produce some new items that are at lower price points? Under $20 - or 12 Euros - is probably the kind of price to aim for.

What are we doing? As our small drawstring bags are already only just over the $20 mark, we aren't sure we can make anything that will retail for less (though we are considering the possibilities). However, we are just about to launch new versions of the large drawstrings and the bucket bags which will be at lower prices than before. Again, sourcing from Asia helps us do this. Also we will switch to a high-quality silk mix rather than pure silk for the larger bags. The end result will be indistinguishable in look and feel - but it will shave some dollars and euros off the final retail price.

Both these steps are perfectly obvious. But the thing that counts is not to sit like a rabbit caught in the headlights of on-coming disaster. Begin both these changes now. You don't have to do everything possible all at once. So just start.

Oh - and see the positive side too. You know, it was only a sense of real panic some months ago that made me finally begin on the long and quite demanding task of finding an Asian workshop that we could form a good relationship with, and that understood quality. It took ages and I would probably have given up if it wasn't for a bit of real lurking fear about the way things were going economically. Once things pick up again (and they will) the changes that you make now will stand you in good stead long-term.