In the waiting room at the Mayo Clinic yesterday, I picked up a Forbes Magazine. It’s not typical to see an outdoorsy “Field and Stream” looking image gracing the front of a business publication but the cover of the April 13th edition featured a man with a walking stick surrounded by the most magnificent Retrievers. The headline read, “What Recession?”. While I am hearing these words from my entrepreneurial friends, it was refreshing to see this in the media. The handsome man on the cover , dog breeder MIke Stewart, was one of six featured entrepreneurs whose businesses are thriving in this economic climate. Stewart has a long list of customers waiting to pay him $12,000 for one of his “finished” dogs. Also featured in the article was Charles Morgan, grandson of founder HFS Morgan. IN the 100th year of production, Morgan has an 18 month waiting list for the 150,000 Aero 8. Morgan’s sales are up 14% over last year. 32 year old , Sacha White didn’t inherit an auto empire. Vanilla bicycle’s founder started as a bike messenger, saw a need and filled it. White has a 180 unit backlog, a four year wait for his handcrafted bikes which sell for an average of $7000. He says most of his customers are middle class. Ninety year old Stanley Bogdan and his son Stephen have salmon fishermen waiting in line for their handcrafted fishing reels which sell for $1300 to $2300. Samuel Zygmuntowiczhas a five year backlog for his handcrafted violins and cellos which sell for $53,000 to $90,000 and are played by YoYa Ma and have been called superior to a 1686 Stradivari violin in large venues like Carnegie Hall. Zygmuntowicz says he wants to keep his instruments priced low enough that they are sold to musicians as opposed to collectors. He only produces six instruments a year, despite 15 hour work days. He says “you need to understand how the moves you make today will behave further down the line.” And while many people are putting off cosmetic surgery, Dr. Yan Trokel says his signature “Y-lifts” are in demand. He plans to license other surgeons in his procedure but will keep expansion slow “within the limits of quality control.”
How inspiring that all of these entrepreneurs had people waiting in line for very high end products and that these items were labors of love. Four of he six sold hand crafted, labor intensive items with working parts, something that a Chinese factory couldn’t knock off because the hand built quality is reflected in the function.
So, how are these entrepreneurs thriving in an economic downturn? A common thread appears to be quality control and supply vs demand. Slow, calculated growth and thinking ahead.. Having a distinctive product, staying small and flexible. Morgan made sure to make few enough cars to not have an inventory glut when the great depression hit. And like his grandfather, Charles is focused on “efficiency over expansion.”
What lessons can you take away from these unlikely entrepreneurs? If you are uneasy starting an upscale business in this climate, take it from these entrepreneurs who are thriving in an economic downturn. Decide what what will make your product stand out. How is what you do different or special enough to be exclusive, to be coveted? Take it slow, make calculated decisions and start now.