SPRING, 2007 BW SMALLBIZ -- INNOVATION Breaking the Mold The Web has made mass-producing and marketing custom products easier. How five small businesses excel at it Only a few years ago, the idea of mass-producing custom products was far-fetched, if not impossible, for small companies to envision. No longer. Many entrepreneurs are now launching companies, or expanding existing ones, by offering personalized products. "When you customize, you separate yourself fromthe pack," says Joseph Pine, author of Mass Customization: The New Frontier inBusiness Competition. "Consumers are seeing some companies offering it, so they think, 'Why put up with the standard when I can get something done just for me?'"The Internet, of course, has made receiving and fabricating custom orders easierand cheaper than ever, though finding the right Web team to take advantage of those capabilities can be a challenge. The best tactic is to spend a lot of time surfing, noting sites that both look good and work well, and then follow up with the Web design shops that built them. You'll also need to make certain you're hiring someone not just with good design skills but with serious Web development chops. And clever entrepreneurs that don't do much business online can still manage to benefit from mass customization, something shown by by Houston-based American Art Resources, which commissions and installs artworks for large health-care facilities.The financial calculations involved in customizing your products or services can be a bit tricky. Customers are often willing to pay more—about 20% more—to know that a purchase is exclusively theirs. But getting a build-to-order system up and running can cost hundreds of thousands of dollars. Off-the-shelf software and production machinery are nearly impossible to find, so you'll probably need to recruit programmers and engineers yourself and do a lot of work in-house. But for small businesses with the right products, such as the five companies profiled here, customizing can be the perfect fit.AMERICAN ART RESOURCESIn the late 1990s, Kathy Hathorn saw a new place for custom artwork. Hospitals and medical centers were starting to recognize the therapeutic value of art for their patients, as well as the ability of unique art to spiff up a brand in an increasingly competitive industry. Hathorn started American Art Resources in 1998 to commission and install artwork, from huge sculptures to photographs of historic buildings, for health-care facilities. "It's not about decorating the space," says Hathorn. "It's about the impact of the art on the patient and caregiver experience. The art becomes part of the message a hospital sends out."Hathorn commissions pieces from her network of about 1,900 artists working in practically every possible medium, including painting, photography, fiber, ceramics, and drawing. Many of those artists owe 15% to 20% of their annual sales to American Art Resources, so they are motivated to complete projects on time and on budget.American Art Resources, now a profitable 31-employee company, sells about 1,000 pieces each year, with revenues of about $5 million. Hathorn's staff handles every aspect of the job, including framing and installation, which she says keeps costs low and avoids third-party liability.Hathorn sends some direct-mail pieces to potential clients, but most of her marketing is word-of-mouth. Many of her company's works generate plenty of buzz, such as a recent commission for the University of Texas M.D. Anderson Cancer Center in Houston, which wanted something never done before. Hathorn commissioned a sculptor in upstate New York to design and build a "tree of life," and a year later, a 30-foot, 6 1/2-ton painted steel tree was installed in the hospital's atrium.CHIP-N-DOUGHTracy Snyder, the owner of Chip-N-Dough Cookie Co. in Santa Ana, Calif., had been selling cookies for about a decade when corporate customers began askingif they could put their logos on the cookie tins they bought from her. It took two years and a big dose of frustration, but Snyder developed a process that allows customers to put whatever words or images they want on tins of the company's all-natural cookies. "I wanted people to have exactly what they wanted," Snyder says. The response has been great: Last year, 30% of the company's $1 million in revenues came from the custom tins.At first, Snyder outsourced custom orders to another company. But that companytook more than three weeks to deliver the personalized tins, so she decided to explore the homegrown route. Snyder went through five programmers and $50,000 just to develop the software needed for customers to place online orders. That was only the beginning. She soon discovered that a machine to screen the designs on the tins wasn't available, leaving Snyder and her father to design the machines themselves. Next up were the chemicals and dyes, which they customized to create proprietary colors. "There were a lot of times where I thought I bit off more than I could chew," Snyder recalls. All told, she spent about $300,000 on the changes.Now customers can order between one and 1 million tins online. To date, the largest order has been for 15,000 tins—about 360,000 cookies. Customers can either upload images to the site and design the tins themselves or e-mail the images and leave the rest to Snyder's staff. Tins can be made in as little as one hour—less than the time it takes to whip up a batch of chocolate chip cookies.ZYRRAWith a hunch that women would pay a premium for bras that really fit, Christi Andersen and her business partner, Derek Ohly, plunged $40,000 of their savings into Zyrra, a Cambridge (Mass.)-based custom-bra maker. As a woman with a small frame and a large chest, Andersen certainly knew how difficult it can be to find the right bra. "The bras available in the stores look like something my grandmother would wear," she says.The partners, who both have technology backgrounds, started Zyrra in 2004 by tweaking off-the-shelf costume design software and creating 25 prototypes. "Mass-customization manufacturing is making it possible for us to have clothing that fits the way we are actually shaped," Andersen says.In September, Zyrra began selling bras through home parties, in which one of thecompany's three salespeople takes 12 different measurements for each customer. Customers then choose colors and trim. Andersen and Ohly work with a local factory to create the bras and are looking
View Full Document
Unlocking...