Editor: Designer and entrepreneur Pat Calello explains that in order to grow your business, you've got to start relying on other people. But what happens when those people let you down?
(If you missed Part One, where Calello first conceives of Automoblox, catch up on it here.)
As an entrepreneur, your roles expand exponentially and change by the moment. Sure, you're the President and CEO, but pursuing your own gig means you're also a Marketing Project Manager, Product Development Manager, Supply Chain Manager, Design Director, Public Relations Manager, Business Development Manager, Director of Customer Service, Mechanical Engineer, and a Lawyer... among other things. You won't have the competence needed in these areas, so you'd better have access to people who do. I have been blessed with a network of professional colleagues that were vital to this project, and my wife, Susan, can step into many roles when she's not changing diapers and chasing our two-year-old.
A good friend, Brett Marshall, called to tell me about a book he had just finished called The Mouse Driver Chronicles. He said that while reading the book, he was constantly reminded of me and my toy car project. I immediately went out and picked up a copy. It was written by John Lusk and Kyle Harrison, two Wharton MBAs who, upon graduation in 1999, took a pass on high-paying dot-com jobs and instead decided to manufacture and market a product (a computer mouse designed to look like a golf-club head) they dreamed up during their entrepreneurship class. With some seed money from their professor and tons of their own, they set up shop and were quickly in business. Their success was modest by their own account, but they did develop an impressive following. An e-mail update to some friends turned into a web journal that eventually became course material for entrepreneurship clases around the country, and, before long, guest lecture gigs turned into a book deal.
At the conclusion of the book, Lusk and Harrison welcomed people with new product ideas to contact them for advice. Not shy and always willing to take advantage of an intriguing offer, I promptly contacted them. At this point in the evolution of Automoblox, I was still at Colgate, and I had yet to select a supplier for the line. The three initial Automoblox products required quite a bit of tooling, which meant that a significant capital expenditure was needed to get started. Lusk and Harrison had positive experiences with their supplier, and suggested I contact the company for a quote.
Within a few days, I was on the phone with the Hong Kong trading company, Swift Tread*. (*Denotes that I've changed this name to protect the guilty.) Vinnie Meola* was a 30-something American who had been in Hong Kong for over 10 years getting his former employer's sourcing business off the ground. The company eventually folded, but Vinnie stayed and started his own trading company. His partner, Lenny Chang*, a Hong Kong native in his 50s who pretends to understand enough English to inspire a certain amount of confidence, is the actual liaison between the factory and the customer.
Doing business with an overseas supplier created some anxiety, but since Vinnie is an English-speaking American, I felt confident in Swift Tread. The fact that Vinnie and I are both Jersey boys further helped me to sleep at night—at least for awhile. Swift Tread submitted the low bid on the tooling and per-piece price, and came highly recommended by my entrepreneurs-turned-book-writers friends. It seemed that the stars—at least in the Far East—were lining up for me and my new toy company.
On my first trip to Hong Kong to meet my new manufacturing partners at Swift Tread, I visited the two factories they had identified to manufacture and assemble Automoblox. The plan was to have the wood factory ship the hand-made wooden parts to the plastic factory, where all the injection molding and final assembly would occur. The plastics factory Swift Tread selected was impressive. The list of customers alone sold me; they were shipping directly to all the big US retailers. They had earned Supplier of the Year from several noteworthy US manufacturers (I even took pictures of the plaques proudly displayed in their lobby), and they had in-house tooling capabilities, impressive engineering resources, a spotless factory and effective Quality Control processes in place. Swift Tread and I agreed on a timeframe of approximately 12 weeks from the time I placed the order for tooling and the time the first container of Automoblox products would be shipped.
But the plan—which at first seemed safe, simple and straightforward—eventually became the cause of anxious days and sleepless nights.
While the manufacturing work was underway, I made arrangements to showcase Automoblox at the American International Toy Fair in New York where I hoped to make industry contacts that would help launch the business. Prior to my association with Swift Tread, I had relied on Saunders Studios to craft two rounds of Automoblox models for concept evaluation and for product photography.
With the toy fair dates fast approaching, I decided to display appearance models, rather than actual molded parts of each of the seven Automoblox cars. I enlisted Swift Tread to do the models at a greatly reduced price compared to Saunders Studios. Swift Tread had the opportunity to examine the models that Saunders Studios had made for me—models that accurately represented the design aesthetic and the desired function. I was assured that Swift Tread would have no problem executing models of equal quality in time for the toy show.
However, in a phone conversation, Lenny warned me that the models were "not too good." I paced the floors, waiting with reluctant anticipation for the "not too good" models to arrive. My fears were confirmed when I opened with shipment to discover models that were far worse than "not too good." They were sloppily assembled and did not function at all. My Hong Kong suppliers had painted my precision/patented connection system to match the specified colors, adding thickness to the parts and resulting in tighter tolerances of the interlocking components. In other words, they didn't work.
With less than a week to go before the show, I had no choice but to use my original Saunders models for display purposes, and to employ the embarrassing models from Swift Tread for demonstrations. I spent the entire trade show trying to convince prospective customers that "the manufactured parts will work just fine when the final products are produced."
I took a few small orders at that trade show in 2003, but mostly licked my wounds and gathered leads. A call from the managing editor of AutoWeek magazine would normally be a welcome and exciting opportunity for free PR, but I had to apologize for being unable to send samples. He was enthusiastic about the concept, however, and said he'd be interested in writing a future piece about Automoblox. I promised to get him samples hot off the assembly line as soon as I could. That day couldn't come soon enough. When I finally received the first shots from the mold in September 2003—already far behind schedule—I was feeling reasonably confident about the work, but didn't know at the time that several more months would be spent in a futile attempt to correct the tooling needed to achieve the desired functionality.
Another thing I didn't know at the time: Whether I was ready or not, there was a big purchase order in the works...