Design Sojourn

Sure! Aim high as they say. Its nice to have a dreams don’t you think?

Well I am sure the Apple fan boys are preparing their ammo, but I must say I wont guarantee our final design will be an iPod killer, but what I will guarantee is at the end of this series, you will at least have a good idea of how designers are able to create good designs from seemingly nowhere or how they are able to create clever products.

Before we go on lets take a quick look and try to understand how we do design from a helicopter view or in other words the design process. The process of design is actually a narrowing one, where we start by casting our net wide and narrow the scope until you get your final solution.

So now is the “what” part, or what are we going to do? What will influence our product conception and mold its growth and birth?

Some random thoughts to get me going. At the end of the day, I need to figure out what will be the “big idea”, that is going to make this product different from the iPod. Any feedback on what you also dislike about your iPod or Apple in general?

I like to wrap up this post with a few other thoughts:
1) This post is also a start of something different at Design Sojourn. I’ll be posting most of my thoughts for this series through sketch or graphics, something my designer audience has been nagging me non-stop for, well at least one designer anyway! (You know who you are!)

2) With iPoor up and running, its time for a new product for Design Sojourn. So this series will be an on-going open ended one. It will likely end when we arrive, hopefully, with a finished product. However whatever the outcome will be, you are invited to be part of this journey and to leave as many comments as you feel comfortable with!

On to ID 102

Really this should have been the Art of the Small Start Part 3, but I figured this title was punchier.

In the last discussion, Part 1 and Part 2, we talked about the critical aspects of People, Product, Pricing, Promotion and Place (Distribution) as part of a business strategy in making successful products to sell.

A failure to consider any one aspect is a recipe for failure.

Furthermore in the Long Tail strategy, we discussed that low inventory does not mean no inventory, and there are still cost to be considered.

Yep, thats what nearly killed me. I failed to consider the cost of distribution, and the logistical cost of getting things around. I suppose, this is an area that I have very little experience as this aspect of the business I deal very little with at my day job.

Here are the things to consider which I did not!

1) Cost of shipping a product is based on exact weight. Do test runs, get a weighing scale, but you need to calculate you cost exactly. This is very important especially if your business, like mine, runs very lean. I totally miscalculated my shipping cost, barely breaking even for each T-shirt.

2) Cost of travel for you to deliver or get things done. I totally missed this. Having to lug 35 orders, approximately 60 T-shirts, to the post office is no laughing matter. Furthermore I had to make 2 trips to the post office as I had to buy packaging materials first.

3) Cost of your time. How much is your time worth? This is normally known as the “administration” cost to the lay man. What else can you be doing instead of spending this time, the opportunity cost of doing this activity?

4) Finally the cost of working in a different currency. The logistics of moving your money. Yep this was one of the contributing factors that ate into my bottom line and the cost of doing business. The strengthening Singapore dollar meant that the US dollars I was selling my iPoor T-Shirt in, was worth less. Even in small amounts, my cost for shipping grew and was not covered.

At the end of the day, I failed to make correct calculations and my bottom line was eroded. I did not have much choice, but to cover the remaining cost, I had to increase my shipping and handling cost for each T-Shirt.

Oh well as they say nothing ventured nothing gained, or nothing learned in my case!

A few quick pictures of my little booth at the MAAD Sunday Market last Sunday!

MAAD with stands for Market for Artists and Designers is a little flea market focusing on original wares from Artists and Designers. You can be rest assured that anything setup there is original and designed or made in Singapore.

So if you are a budding artist or designer, hungry for a place to hawk your stuff, have a go at MAAD!

Recently I have been exploring the highs and lows of Paypal.com while managing payments for my iPoor T-shirts. It’s not the world’s most perfect banking system, but in my opinion its a great online banking system that allows transactions to anyone or anywhere with a paypal account espically if your transactions are in small amounts.

Paypal started as an on-line escrow middle man for eBay payments where you can pull funds from your credit card AND your bank account for payment to someone else.

For small business it’s very ideal as it’s very low cost to operate the account. There is no minimum account keeping fee for very small amounts (even at $0). Operations wise, you can for accounting purposes, download transaction data into a spreadsheet or Quicken to track purchases or transactions. Also for each of my T-shirts sold, I can print out shipping receipts to insert with each of my transactions for easy reference of delivery information and order details. On the whole very professional if you ask me.

If your business conducts the majority of sales online, you can receive money from your buyers from either their Paypal account or from their credit card. This means you do not need to setup expensive credit card merchant accounts nor require minimum monthly transactions as Paypal is now your middle man. There is however a small commission about USD$1-2 depending on amounts, which I forgot to charge for my iPoor T-Shirts! How ignorant of me! But this is how Paypal makes money.

Also Paypal works in only a few major currencies such as US dollar, Euros and British Pounds, so if your local currency is not of their major currency, you will have currency exchange risks. However after comparing their exchange rate with XE.com, I find their rates pretty fair, but you will just have to deal with the ups and downs of the global currency market.

For example when I calculated my pricing for my T-shirts I calculated it based on 1US$ = 1.70SGD$, the Singapore Dollar has since strengthened and it’s now in the high 1.58SGD$ eating into my already low margins.

There are however quite a few limitations.

One is the ability to pay someone without a Paypal account. If that person needs to receive money, he/she needs to setup a Paypal account, other wise there is no way to receive the money. But in most cases I just transfer the monies from the paypal account to my personal account and pay conventionally.

However let me warn you, setting up the linking banking account is “Nasty”. I suggest you read all the instructions carefully before you set-up you Paypal account as your Paypal account and your Bank Account name needs to be exactly the SAME.

Another problem as mentioned is customer support. I made a mistake in my Paypal account and account name and have been sending emails to them to change it. They still have not done anything to date after 2 weeks of 5-6 emails sent.

In the end, with the help of my designer friend, I’ve decided it’s easier to set up multiple papal accounts which you can transfer money to each other just like having multiple accounts in a bank.

The last and biggest problem is I constantly worry about how safe your money is on this online “bank”. A bank securely holds your money in a “pool” and unlike traditional banks there are no “bricks or mortar” institutions or government backing on your money. Some advice that has been given to me is pay thru Paypal, but when you recieve payment, get your money out ASAP dont leave it in the account.

Check out Paypalsucks for some more horror stories. Good site for more information on the short comings of Paypal.

At the end of the day it does take some getting use to, as well as a change in mindset and getting over the online issues and horror stories. This is especially if you are the type, like me, that gets frustrated easily and want to pick up the phone to yell at someone. But after getting over the “teething problems” I find the pros do outweighs the cons.

Just an update that we will be shipping the iPoor T-shirts to all customers by the middle of next week! So your wait is almost over!

Sorry for the lack of posts, I’m currently in Hong Kong for a quick holiday.

Furthermore in the last couple of days, I’ve been washing and testing iPoor T-Shirt samples with friends of different sizes. This is so as to give you the best possible customer satisfaction when you receive your purchase!

Here are the compiled feedback from my 5 “testers”.

1) As the T-shirt is 100% cotton, it does shrink in the wash. After washing a few shirts, we tried them on and here are the results.

If you are 159cm, weight 50kg, waist 27″ then the S is comfortable and slightly baggy.

If you are 184cm, 80kg, with waist 32-33″ and the L fits just right, but it will not be baggy grunge style.

If you are 192cm, 100kg, and 36″ waist you will need to go with the XL. Again the fit just right.

Anyone larger will not be able to fit the XL.

2) Finally please wash all the t-shirts before you wear them, especially the black. The black T-shirt’s color DOES run. So please soak for a bit before you wash it in the washing machine!

Yep we are back in stock! But thanks to my wonderful supporters we are actually 60% SOLD. Also the hot favourite Black XL is already sold out!

Click on the image for ordering information. Please do allow for 4-6 weeks for shipping and delivery.

Gosh at this rate I may have to do another run of hundred pieces. What do you guys think?

Wow, my iPoor T-Shirt is on Engadget!

Well unfortunatly its only the chinese version but hey its still Engadget!

As my Chinese is pretty bad, fellow BL blogger did a quick translation for me:

They say that it’s looks cool and fashionable, for those who don’t want to spend $500 for a IPod Nano, you should consider this economic choice.

They also said that iPoor does not need battery and electricity and you don’t need to worry about whether it works or not.

It’s a good product and they urge people to buy one for themselves.

Thanks BL!

I cant imaging anyone wearing this Levi’s iPod Jeans, and like all Levi’s and iPod related accessories, I bet you it costs a bomb.

Not only is it atrocious, it somehow does not blend with the minimal iPod look.

Why not wear my iPoor T-Shirt instead? Did I mention we are more than 50% pre-ordered? The T-Shirts are running out fast so do get them while they are hot!

And I can promise you, you wont look like a walking grape vine.

Via: Engadget

So from Part 1 we really get a gist of the direction of where digital businesses are moving.

If we use Crowdsourcing, which is a way to generate ideas and source for labor, and The Long Tail Effect which tells us that people buy niche products almost as much as mainstream, as a basis for our discussion we can now proceed to flesh out a product marketing plan for the new Web 2.0 environment.

To further solidify my discussion, I will also sprinkle this discussion with examples on how I applied this analytical thinking to my small entrepreneurship project the iPoor T-Shirt and iPoor product brand.

It’s amazing but I always find what you learn in school still applies today. I suppose I was awake eh?

If there was any take away from my marketing class, they were the 5 “P”s, People, Product, Price, Promotion, and Place (distribution). Till this day, I still apply such fundamentals to my design work, and I will do it again here.

People

Always know your market. Personally as a designer and entrepreneur, I find this is the most important category. Thus it’s the first order in any marketing plan.

Most people come up with great product ideas but have no idea how or who to sell the product to. Let me put it straight to you, you don’t earn anything if nobody buys your product, period.

Understanding your customer’s view on consuming behavior, product selection, likes and dislikes, needs and wants, spending power and even web surfing habits are powerful indicators on how you can tailor your product to them.

With the internet you can even afford to conduct super focused marketing and creating products that fit 100% of their needs. But do note the more specific a tailored product the smaller the volumes so you will need to balance it some how.

My iPoor T-shirt is targeted at a group of design savvy people that appreciates a clever design and the deeper meaning it entails. When looking at the Cult of the Mac, my target market are often in the peripheral looking in and may or may not own an iPod. They are internet savvy and because of that, they are well aware there is another world out there other than that of Apple’s viewpoint.

Product

So by knowing your market or the people that you want to sell to, you can now comfortably define your product.

It is not necessary to identify your market first then your product. You could do both concurrently. You could create a product idea first and then refine it or adjust it back and forth until it meets the needs and wants of your target market.

However if we are looking at in a frame work of a “Small Start”, one of the first things we need to look at is a product that is easily sourced and made. There is really no point looking at revolutionary products that will re-invent the wheel as you don’t want to kill yourself by high risk capital investment.

Of cause if you have the financial capital, by all means, but in “The Art of the Small Start” simple products like cups, mobile phones, MP3 players, T-shirts, buttons, prints, scarves, iPod accessories etc are great products to get yourself going.

The trick here is the differentiation factor. What makes your product different from the others out there? Determining this is perhaps is the most difficult part.

Is it a clever idea, a cool looking design, or even something cheaper than the competition?

iPoor was conceptualized as a design that used simple graphics but applied it in a form of a gestalt illusion that is not common in T-Shirt designs in general. That was the main appeal of the product.

At the end of the day, you need to ensure that you are able to source or manufacturer the product to your requirements. Thus again, this supports my list of examples above as almost all are easily obtainable in some way.

Price

There is a certain level of “bootstrapping” in regard to “The Art of the Small Start”.

Therefore product cost and cash flow is very important, you need to carefully calculate all manufacturing and purchasing cost. Also you need to ensure that your margins are comfortable enough for you to survive. Dont forget your break even point.

The trick here is though you need to work both ways, you cannot just flog a product based on cost + your operating markup. You need to know your customer well and the type of pricing he or she is willing to pay for what you are offering.

This is really where Crowdsourcing can help. Your “Crowd”, which you know best, determines the price they are willing to pay and will let you know some how. Or better still, like with what I did with iPoor, I priced the T-Shirt at a lever lower then what my “Crowd” was willing to pay.

At this point in time you might be thinking how T-Shirts of cups are going to make me millions? Think again.

From The Crowdsourcing Blog on Pure, Unadulterated (and Scalable) Crowdsourcing just look at the combined product and pricing strategy of Threadless:

Threadless is a perpetual, online T-Shirt design competition. Artists submit their designs; users vote on them; the highest-rated designs are printed and sold back to the community. Simple. Brilliant. Most importantly: Ridiculously cost-effective. When I talked to him this morning, Threadless Creative Director Jeffrey Kalmikoff told me the company is selling 60,000 T-Shirts a month, has a profit margin of 35 percent and is on track to gross $18 million in 2006. This, for a company with fewer than 20 employees. Crowdsourcing can be very good business indeed.

Promotion

The internet is responsible for the paradigm shift of power from big name manufacturers to mini-product entrepreneurs.

The internet has allowed almost pin-point advertising and promotion to target users. This allows the “small fishes” to apply Niche Guerilla Marketing strategies more efficient than ever.

One of the interesting aspects of the internet is the power of web communities. That’s why myspace.com was worth so much to News Corp.

The lynchpin of Crowdsourcing, web communities, are a bottom up approach to building your business. Focusing on creating a community buzz is extremely relevant in today’s modern internet marketing strategies.

Many companies don’t get it, but digital business today all have strong web communities which further allows the companies to have an intimate knowledge of their prospective buyers. Other benefits include test marketing of new products are virtually free!

This leads me to talk about that “other” community, the blogging community. Blog marketing or viral marketing is done best when it’s genuine. As an example when iPoor was posted on my blog, the “link love” I received was amazing. It even got me a slot in the Sydney Morning Herald’s Domain section on new and notable products. My product moved from internet into a real life publication.

Nothing beats Viral Marketing, and did I mention it’s free?

Place or Distribution

I like to complete my discussion with the 5th “P” which is place or distribution. In other words how on earth are you going to get your product to your customer?

Also if you recall in the “Product” section, we selected products that were small, easy to sourced and handle? Well the main impact of this in “The Art of the small start” is the cost of inventory and distribution. We need ensure that we reduce inventory cost as much as possible.

From Guy Kawasaki’s great post on the tactical implementation of the Long Tail he describes succinctly:

Near-zero inventory carrying costs. If you plan to sell a few units of lots of things it can’t cost you much to keep those things in inventory. This is separate from the cost of production. It might cost Ferrari a lot of money to make cars, but if it will consign them to you for free, what do you care?

Actually, you do care: there’s warehouse space, insurance, and shrinkage. Even digital content like music, movies, ringtones, and photographs require bandwidth and storage. Not only must the product be cheap to make, it must be cheap to keep in inventory.

In our case as we are selling tangible products, there will always be somekind of inventory. For me I did a limited run of 100 Pieces of iPoor T-Shirts that when delivered only takes up about 3 Feet by 1.5 Feet high stack. Perfect for tucking under my son’s cot!

One down side though in “The Art of the Small Start” is you will have to man handle every single piece of inventory you sell. You will need to lick every single stamp, and seal every single padded envelope or box. Nobody said it will be easy, but if you are like me, I enjoyed every single step of the process.

I wish you all the best in setting up your “Small Start” in entrepreneurship! The best part is I now have funds to roll into my next venture. The best things in life come in small packages!

If you have any more questions, please do not hesitate to leave a comment or email me. I’m no expert but I love to share and swap stories.

Updated: New links added and my usual poor grammar corrected.

A Web 2.0 marketing plan focusing on real tangible products, really only made possible for our discussion today because of the pipeline pathway open by the Internet. The Internet is amazing in a sense that it is creating a whole new way of doing business.

My little (why little? more later) entrepreneurial project, The iPoor Product Range and The Firmwareproject are really a reflection of my long term interests and study in spotting consumer trends. A lot of the information presented here has been synthesized from one of my favorite design cum business websites Trendwatching. I highly recommend you to sign up for their newsletter as its a great primer for business ideas as I for one much prefer to generate business ideas from a bottom up approach that is based on trends and satisfying needs.

There exists a phenomenon called:

Increasingly, consumers are participants instead of passive audience members, and this mega-trend manifests itself in a variety of ways. In fact, the more we hear about GENERATION C making money from its creations, and the more we focus on the financial rewards consumers are reaping from participating in CUSTOMER MADE projects, the more the myriad of other entrepreneurial undertakings by ordinary consumers makes sense.

We have dubbed this trend ‘MINIPRENEURS’: a vast army of consumers turning entrepreneurs; including small and micro businesses, freelancers, side-businesses, weekend entrepreneurs, web-driven entrepreneurs, part-timers, free agents, cottage businesses, seniorpreneurs, co-creators, mompreneurs, pro-ams, solopreneurs, eBay traders, advertising-sponsored bloggers and so on.

Essentially micro, very niche business selling unique and very focused products to equally very specific customer base. Do click on the title for more in-depth information.

Minipreneurs are again made possible due to the Internet, as there exists on the web many pathways for the man on the street to create his own product. Business models like Cafepress, Threadless, and online prototyping portals are real avenues to production and manufacturing once only attainable to large corporations due to high costs.

Really this consumer, also called the GENERATION C consumer focuses very highly on content, in particular, content that is relevant to them. However the take away is in general consumers today are so varied that companies are not able to provide the experience that consumers crave.

The situation gets worst. Consumer products today are much more of the same, as many products are created from the same electronics base or manufacturing. Outsourcing strategies to OEM (Original Equipment Manufacture) and ODM (Original Design Manufacturers) are here to stay. This causes GENERATION C consumers, tired of the same mass products, to rise up, be pro-active hyper consumers and start dictate what they want.

Also called CUSTOMER MADE, Open Sourced design, Crowd sourcing and the Long Tail effect, businesses are wising up and creating platforms for consumers to tell them what they want. Unique business ideas like Cambrian House have their entire business model based totally around this trend.

Interestingly a lot Crowdsourced and Long Tail effect products are very intangible products such as software or provide a services like iTunes. Their theories are all nice but how about applying it and doing it for real in the creation and selling of tangible products instead of intangible products like software?

I’ll end part 1 here to let you read and reflect on the links. In part 2, I’ll look at what you should consider in your marketing plan.