Several times a year I find myself in conversations with people who say they’re going to start a tackle company. The conversations are pretty much the same, only the names and the products behind them change.
Invariably these people have a “new” product that’s going to “revolutionize” some aspect of the sportfishing industry. Those two words tend to fire up my skepticism like nothing else can, and I settle in for a description of a device that every angler simply “must have.”
Before they get started, though, I usually insist that they give me no details about the product. I don’t want to know if it’s a crankbait or a landing net, a sonar gizmo or a floating keychain. It doesn’t matter. Later on, though, I don’t want them thinking I spoiled things by telling other companies about the item. Wide-eyed enthusiasm has a way of turning into beady-eyed paranoia in this industry, and in this case what I don’t know can’t hurt me.
If I ask what aspect of the market their device will improve, they usually say, “Everything!” And if I ask who’s going to buy it, they always say “Everyone!”
I like passion as much as the next guy, but sometimes there’s a fine line between passion and lunacy, and a lot of these folks are on the wrong side of that line.
Sometime after the speech about how great this thing is, they’ll ask me what I think. I usually tell them it’s wonderful and I hope they can find a company to buy it. If I really think it’s a good idea, I’ll offer some contacts with the big manufacturers to get them started.
That’s when most of them make a big mistake. They’ll say, “No, we want to do this ourselves. Why should we let XYZ Company get rich off our idea?”
Then I have to break their spirit … or at least the spirits of the smart ones.
“What else ya got?” I ask.
“What do you mean,” they reply. “This is a billion dollar idea!”
“OK, but what other great ideas do you have?”
You see, one idea — even a great one — is a “product.” Multiple great ideas are necessary to build a company. Without multiple great ideas you have no legs, no long-term, no future.
If all you have is one product, you should sell it for the best price you can get. If you have multiple great ideas — and I mean really great ideas, not just stuff your wife and mother like — then you have a very slim chance of succeeding.
Show me a great product in the fishing industry, and I’ll show you one that will be copied and copied and copied until your share of the marketplace is so small you can’t pay your phone bill with it.
“But I have a patent!” they scream.
Good for you, but a patent is just a piece of paper. The real question is whether you have the financial wherewithal to sue the companies that infringe upon your patent (and there will be plenty) or is your budget limited to nasty form letters? If you lack the bucks to lawyer up and go toe-to-toe with the tackle giants, you might as well take your patent and use it to clean windshields on street corners.
Besides, it’s pretty easy to get around a patent … no matter what your lawyer says. The changes that must be made to the original product are relatively small in order to skirt the law. It could cost you $100K just to learn that you weren’t even infringed upon.
For now, though, let’s say you’ve found a place to manufacture your product and the audience is thrilled with it. You can’t make them fast enough! It’s a dream problem, right?
No … it is not. It’s actually another part of the “do-it-yourself” nightmare. When your supply cannot keep up with demand, someone else is going to fill that void.
So while you’re struggling with these “good problems,” guess who’s watching. If you answered “Every other manufacturer in the tackle industry,” give yourself an “A.” Now guess what “good problems” they have. Well, they don’t have any “good problems” because there are no “good problems.”
The better name for your “good problems” are “barriers to entry,” and these barriers are tall and they are wide.
The big boys have production that can make their knock-off faster and cheaper than you can make your original. They have distribution channels that can get them in stores long before you can even get your stuff made. And they have massive advertising budgets that will lead the public to believe they invented your whatchamacallit — not you. When they’re finished, you, your product and your business will be finished, too. What’s more, is a good bet that no one will ever have heard of you or ever seen your product in person.
In the tackle industry, imitation is not the sincerest form of flattery, it’s the most profitable form of theft.
This story is played out many, many times every year. You don’t hear about most of them because the collapse of the start-up company is so fast and so complete, it’s like they never even existed. And you know what they say, the victors write history.
Sound unfair? OK, we can agree it’s unfair. So what? It’s not about fair. It’s about business. And in the real world of the fishing tackle industry it’s played with few rules and little conscience, but it is always played for keeps.
How’s that for some tough love?
A rising tide lifts all boats. Let’s be that tide.