The Brat Economy
Tuesday: September 25, 2007 10:38 AM
When we think of traditional manufacturing, we think of huge capital investments where profit can only be obtained with mass volumes of production. The obvious products are things like the automobile, clothing, and book publishing. In fact, I was chatting with a friend of mine that owns a plastic form company and he indicated that my not so brilliant idea would cost me $250,000 just to get setup. Then, another $100,000 in production costs before attempting to sell the first product. Nothing new in this model, based on my past experience in Web 0.0
However, two of those examples I provided are no longer true. In the past, you would need to sell 100,000 copies of a book to even get started on a profit. An author friend one commented on writing a technology book: “it’s the best job you can get for $0.05 per hour.” Enter LuLu.com publishing that turns this model upside down and should strike fear into everyone from Morgan Kaufman to Wiley Publishing. In this model, the author performs all of the basics services or purchase services like editing, cover design, or graphic design from the publisher. The books are sold and printed on a single run cycle format. In other words, they can sell and print any book with a single order; not 100,000. Yes, the books are available on Amazon and BN.com. The most important aspect is that with a traditional book publisher, it might take 6-12 months to get the book through the review process and channels. The question on the table is waiting for a perfect book worth the added expense and 11 month delay? Would you rather buy a book that 95% edited or wait 12 months for one that is perfect? What’s the value of the information if you can get it early?
How about clothing? Take a look at a site called Threadless.com. From what I can tell, you upload your t-shirt design and people can comment and rate your design along with the other 10,000 ones in the inventory. More importantly, you can buy a single shirt if you like one of the designs submitted. What seems to be happening in industry after industry is the barriers of mass production, controlled messages, and large capital investments are fading away. Not to mention, they made 7 million in profit last year and didn’t need to hire a single designer.
We could easily say that these are just two isolated examples and Hanes has nothing to worry about. Or, we can rethink the essence of where this is heading. End user generated products and services are already here. Ok, if you’re not writing a book then the publisher model might not hit home. If you never had a design floating around in your head then Threadless might not be interesting. But all of us have eaten our fair share of M&M’s. With 22 colors to choose from, you can even have your chocolate fix designed your way. You can also add your company logo or special event such as weddings on the very tiny pieces of candy.
We are getting to the point where I can have what I want, when I want and How I want. The "Brat" Economy is emerging...
When we think of traditional manufacturing, we think of huge capital investments where profit can only be obtained with mass volumes of production. The obvious products are things like the automobile, clothing, and book publishing. In fact, I was chatting with a friend of mine that owns a plastic form company and he indicated that my not so brilliant idea would cost me $250,000 just to get setup. Then, another $100,000 in production costs before attempting to sell the first product. Nothing new in this model, based on my past experience in Web 0.0
However, two of those examples I provided are no longer true. In the past, you would need to sell 100,000 copies of a book to even get started on a profit. An author friend one commented on writing a technology book: “it’s the best job you can get for $0.05 per hour.” Enter LuLu.com publishing that turns this model upside down and should strike fear into everyone from Morgan Kaufman to Wiley Publishing. In this model, the author performs all of the basics services or purchase services like editing, cover design, or graphic design from the publisher. The books are sold and printed on a single run cycle format. In other words, they can sell and print any book with a single order; not 100,000. Yes, the books are available on Amazon and BN.com. The most important aspect is that with a traditional book publisher, it might take 6-12 months to get the book through the review process and channels. The question on the table is waiting for a perfect book worth the added expense and 11 month delay? Would you rather buy a book that 95% edited or wait 12 months for one that is perfect? What’s the value of the information if you can get it early?
How about clothing? Take a look at a site called Threadless.com. From what I can tell, you upload your t-shirt design and people can comment and rate your design along with the other 10,000 ones in the inventory. More importantly, you can buy a single shirt if you like one of the designs submitted. What seems to be happening in industry after industry is the barriers of mass production, controlled messages, and large capital investments are fading away. Not to mention, they made 7 million in profit last year and didn’t need to hire a single designer.
We could easily say that these are just two isolated examples and Hanes has nothing to worry about. Or, we can rethink the essence of where this is heading. End user generated products and services are already here. Ok, if you’re not writing a book then the publisher model might not hit home. If you never had a design floating around in your head then Threadless might not be interesting. But all of us have eaten our fair share of M&M’s. With 22 colors to choose from, you can even have your chocolate fix designed your way. You can also add your company logo or special event such as weddings on the very tiny pieces of candy.
We are getting to the point where I can have what I want, when I want and How I want. The "Brat" Economy is emerging...
