Category - Business

Back in 2005 I had an idea to create a site that allows artists to sell their wares through the site, with me collecting a small fee for each sale. As I outline in this post, I made some mistakes in my approach that ultimately resulted in other companies beating me to market with the same idea. For a few years following I sporadically worked on the site and concept but never with any real vigor or drive.

About two years ago I decided that the idea still had merit but that I’d need to focus on a specific market that would give me an edge. Given that I planned on launching with my wood turning products and the fact that I know that art very well, I naturally decided to focus in on that niche. I put a plan into place for how I was going to market the site, how I was going to maintain it, and when I was going to call it quits.

To arrive at my plan I stepped back and asked myself what I wanted to achieve with the site. I decided that what I really wanted was an outlet to sell the products I make anyhow, while making a little bit of money, and the ability to allow other artists to do the same, should they choose to do so. It was never intended to be anywhere near capable of producing enough money to support me and could not interfere with my day job or family life.

Having that concept as my base, the rest of the planning was pretty easy:

• I wanted the site to handle most of the day to day operations itself – sale notifications were automated, the site was designed so that customers could use self service features, other artists could interact through the site without my involvement (aside from the fee), etc. This would require a little bit more coding to automate some things that previously were manual, but not too much. In the end I basically had to drive products to the post office and the site handled the rest.
• I wanted to limit the amount of money I put into it as I didn’t foresee a huge return. I arbitrarily landed on $500 seed money. Once that money was gone, no more could be put in. Any profit made from the site would be added to the pot as operating cash.
• Once the money was gone OR one year passed by without starting to see at least a modest uptick in sales, I’d pull the plug. My choice which.

I was off and running.

As of today I am about a month shy of the 1 year mark. I’ve spent almost all of the money – a small chunk went to domain registration and hosting fees and the rest went to my marketing campaigns. The sales were able to cover the spread for a few months but haven’t averaged out enough to keep cash balances moving in the right direction. As of today, the site has $38.

So I’m sticking to the plan and calling it quits. Kind of.

I’ve been toying with the idea of pulling the plug for a few weeks now. While the site is pretty much fully automated, I still have to log in periodically to check security, logs, and other maintenance items, which takes up time that is in high demand right now. After thinking through the problems and my desire to still have an outlet to sell the art that I will make anyhow, I came to the realization that I should pull the plug on the site, but not the concept (yet).

I’ve decided to invest my remaining $38 into Etsy, the very company who beat me to the punch with the idea I was working towards back in 2005. With my product set it will cost me $7 to post my inventory for 4 months. If nobody buys anything at all, I can run Tanglewood for another 24 months ($38 / $7 = 6 payments [I’ll chip in a few bucks…]; 6 payments * 4 months each = 24 months) without having to worry about any sort of site maintenance at all.

Tonight I set up an Etsy storefront, shut Tanglewood Turnings down, and set up an automatic redirect from Tanglewood over to the Etsy storefront.

Was pulling the plug on my site hard? Of course. Was it the right decision? Absolutely. I made an objective line in the sand before I started and am sticking to it. Trying to trudge forward based on my emotional ties to what I’ve created simply doesn’t make sense. It isn’t hitting the business targets I set, thus it is failing. Bail out.

In this case I just happened to find an option that would allow me to extend the concept a little longer, while still not violating my objective exit strategy. The original Tanglewood site is sleeping now. In 24 months if I have no sales the Etsy Tanglewood store will be too.

This is why I don’t use UPS for Tanglewood Turnings:

• 4/2/12: Opened a new account and requested shipping api credentials.
• 4/13/12: Finally gave up on getting WORKING credentials for the shipping api. Multiple calls, multiple emails, still not working. FedEx and USPS were both a matter of an email or web form.
• 4/13/12: Closed account via web.
• 8/13/12: Received invoice for $306.42 for shipping a package from China to Idaho.
• 8/14/12: Called UPS.
  • Talked with 3 different people who all transferred me to someone else before the 4th person was the right area.
  • Each person needed only my 6 digit account number to verify who I was – there were NO authentication questions whatsoever.
  • The final person picked up the line, was silent, and only responded with “UPS.” when I finally said, “Hello?”.
  • After investigating my account the representative started explaining that the receiver had accidentally transposed some digits and proceeded to tell me what their shipping number is.

I decided not to use them originally because of their inability to supply me with some simple, working api credentials. I refuse to use them going forward because of their total neglect for basic security protocol.

There is no way that I should be able to authenticate to a point where I can make changes or bill charges to my account with just my six digit shipper number. This is easy to obtain and by no means guarantees my identity.

There is no way that any representative should EVER give me information about someone else’s account. Had I been a hacker I could have easily written down the six digit number and started shipping goods (or illegal materials) using the shipping number for this company in Idaho.

There is no way that a company should be able to fat finger their account number and result in the charges going to someone else. There should be at least two levels of authentication on this. At the very least the account name should be entered to avoid fat fingering (thought this would do nothing to prevent true fraud).

If you use UPS now take these things into consideration:

• They make it easy to get your information or to use your account to ship things. While the charges are easily reversed you have to consider what is being shipped. Are they using it to ship drugs? Arms? Black market goods? Funding, plans, or materials for terrorists? Your name is on it so if it gets picked up, who do you think the feds are going to come for? Even if there are no legal ramifications, do you want that on your social conscience?
• They make it easy to get your information. A series of phone calls to various departments would give a hacker the ability to get enough information to open accounts in your company’s name, yet because of the way they have their departments broken up, there would be no easily traceable trail of the hacker’s actions.

There are countless articles out there on this topic, none of which will help you actually make a definitive decision for when the right time to launch is. The reason they won’t help you is because launching a new business is intrinsically subjective. There are so many variables that go into launching and running a business that even the best articles can provide only guidelines.

I’ll sum up most of the articles out there on this subject: Launch as soon as you can.

If you look past the simplicity of it, the answer and advice is dead on. It is important get your name out there and start building a relationship with customers. You can’t really do that unless you are live.

So, diving in deeper, what constitutes being ready? That depends on you, your business, your market, and your goals for the company. I can’t provide the answer to you but I can tell you what drove my decisions for my recent launch, Tanglewood Turnings.

Tanglewood Turnings started out entirely different from what it is today. Back in 2005 I had an idea for a website where artists from around the world could come together to sell their products without having to worry about all the technology setup and headaches of running a website – they could simply focus on their art. The site was going to be called TanglewoodArts.com and was going to become the de facto place for artists to sell their wares.

It didn’t work out that way.

I kept tinkering with the code and kept adding “just one more feature” and adding “just one more cool technology” until it was too late and Etsy had burst onto the scene and carved out a place as the leader in this market. I waited too long and lost my opportunity.

I viewed the software I was writing in light of things I’d like to see go into the product and the technologies I’d like to use instead of things that will allow the business to start operating. In hindsight I didn’t need 90% of the crap that I wrote, at least not for launch. While much of it is useful and may eventually get some use, the only thing I needed for day 1 was a way for artists to upload their products, a way for users to look at the art, and a way to process payments and orders. Instead, what I was building was a complex system that gave artists and admins fine grained control over all sorts of different aspects – artist profiles, preferred shipping methods, custom order request capabilities, etc.

I missed the mark and I lost my opportunity to corner the market before Etsy did. I failed because I couldn’t draw a line in the sand and say, “these are the only things we need for day 1 and no more.”

The entire time I was adding feature after feature, Etsy was gaining market share and becoming a household name. What’s worse is that I didn’t realize my mistake until it was too late.

After my realization that I missed my window of opportunity I let the code float for a long time – multiple years. I’d write a little code here and there but it was never with the goal of launching anything. Instead, I wrote code because it kept my skills up to date and gave me a good opportunity to stay abreast of the latest happenings in the constantly evolving world of Ruby.

Last year I decided that I wanted to spin the idea up again. In thinking this through I decided to focus on a niche market that I knew well – wood turning. So I started doing research and found that while there are a bunch of sites out there that sell hand turned pens, pencils, bottle stoppers, etc., there are none that a) allow multiple turners to sell through the same site and b) provide a real time custom product builder. I decided that those were my differentiating features. The multiple artists at one site I had. I had already started on the concept of a much more generic custom product builder. I had a working shopping cart, order, and product system.

So I drew my line in the sand. I would launch as soon as the custom product builder was ready in its most basic form. I did. (Note that I did take a brief hiatus to pursue another project, otherwise this timeline would have been more like 2 months instead of 8.)

Now, I have a name out there and I have actual paying customers. I’ve got an offering that is truly unique, allowing me to build a customer base in areas that other sites and vendors can’t fulfill.

Is the site done? Hell, no. I’ve got a list of an additional 50 features or improvements I’d like to make to the site. Right now I have to manually process payments for artists, when it could be automated. Right now users simply get the lowest shipping rate available when I’d like for them to have an option so they can dictate preferred shipping speed. Today I have to manually update various data points such as prices, availability, etc. change in the market when this really should be automated. The custom product builder currently has the capability to support things like accessories, however I’ve not loaded any into the system. The list of things that would make the site better, but weren’t necessary for go live goes on.

Unfortunately it took me losing a really good business opportunity to realize that I didn’t need all the crap that I was writing in order to start the business. What I needed was quite simple but I made it much more complex because I liked writing the code.

Your case is likely no different. Put all the items you want for your product in a list. Now go through each item and individually decide if that item is an absolute must for go live. These are things that your site simply cannot function without or things that you’ll miss out on differentiation without. Once you finish this process you should have a much shorter list. Now do it again with that shorter list. When you are done with that, do it again. Keep doing it until you are sure that you have carved as much fat as possible. Now, when that list is coded and tested, you are ready to launch.

This is the process I followed for Tanglewood Turnings, which worked well. This is NOT the process I followed for Tanglewood Arts, which resulted in failure.