Surtex… and Elephants

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Surtex is over. Many people walked the aisles, a bunch stopped at our booth, we had a great show and we are going to do really well because of it.
The End. 
It really can be that easy. Lost in all the post-show hoopla is the fact that Surtex is but one tool in an artist’s marketing program, and careers do not live or die because of it. There are many successful licensed artists and also many large and significant art licensees who never set foot in the place. Of far more importance is 1) the ongoing quality of your offering and 2) a well executed year-round marketing plan. Surtex is done and there will be endless postmortems, blogs and reports to digest but all (well, at least those who know) should pretty much tell you the same thing – traffic was down but the quality of attendees was up, not a lot of lookie-loos, and the licensees were focused and ready to commit. It was a decent show, full of pretty good to great art without a lot of clunkers, not a record setter but a nice solid three day event. 
We did not talk to many artists as we stay pretty busy, although we heard they were out in force and only one (it still happens!) marched right up into the middle of a meeting and started pitching – to all of us, client included. Funny in retrospect but not particularly so at the time. There was also the usual coterie of former exhibitors who seem to feel they now have the right to work the show aisles instead of actually paying for a booth, a position I will never understand. They clearly are not there to evaluate the “possibility of exhibiting” so I question why management grants them access. I would also extend that line of reasoning to those artists who are on their 2ndor 3rd (or greater) year walking the show while still claiming to be “thinking about” exhibiting. Seriously? Nobody’s buying that – either get a booth or stay home.
Speaking of things I don’t understand, there was some interesting discussion about the agents who charge their artists to be on the walls of the booth. Normally I would be of the mindset that how someone runs their business is not my business, but then I’m not usually one to ignore the elephant in the room. The amount charged can vary widely, however one agent reportedly collects a 4-figure fee to be on the wall of the booth – a 10 foot booth with a dozen or more artists displayed, arranged 2 or 3 to a banner. Do the math – 10, 12 or 15K collected to support a 5000 dollar booth? Sure, there could be a couple of thousand dollars additional (maybe) in other expenses, however that still puts a lot of excess cash into someone’s pocket.
Brand licensing agencies have long operated on the commission plus expenses (shows, travel, advertising, etc.) model, however they charge a smaller percentage which offsets what can be significant expense billings. It is one thing to require your artists to help defray the cost of exhibiting, even though I do not agree with that practice (what’s the 50% for?), but turning those artist contributions into a profit center is reprehensible.
Anytime you are paying out money you should fully understand how it works. If it’s for a booth at a show request a full accounting of all the expenses you are “sharing” so you can see how your portion fits into the big picture. Ask for photos. When in doubt you can check with other artists or agents about what is normal practice, at least as much as there is such a thing, but no one collecting expense money from you should ever object to answering ALL your questions about where that money goes. You will need to invest in your career but first make sure your dollars are being spent wisely.
And now back to that bunch of client requests…

Actually, It IS Your Job

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A lot of people are telling those coming into art licensing that this is a business and you need to approach it as a business – but I think you should go even farther…
You are an owner. This is a different experience than working for somebody, you now work for The Me Company.
You are the receptionist, the first point of contact and the public face of your company, so plan to look and act like a professional.
You are the marketing officer, so you need to understand where your products fit – and where they don’t.
You are the production department. Quality with efficiency is your goal.
You are the CFO, deciding how to apply limited assets to reap the greatest return while you constantly and realistically assess the probability of becoming profitable.
You are the sales person, so you need to find, initiate and follow through with your customer contacts.
You are the operations manager, arranging priorities and scheduling the work.
You are the quality control officer. Every product is inspected and flawless before it goes to…
You, the shipping department. Delivering your product as promised – accurate and on time.
You also have the big job in the big office: you are the CEO, the Director of Innovation, the Department of Strategic Thinking, so you need to work with the big picture. Your business will evolve and change constantly, the markets will shift and what is going to work tomorrow is always a question, and you have to answer that question. There are very few things on this path that are truly out of your control, so whatever happens will be your fault. The success or failure of your company – whichever it is – is whatever you decide to make it. Always.
The sooner you accept that the sooner you can choose success.
And don’t forget to make a fresh pot of coffee before you sweep out the back room…

10, oops, 17, Things You Need to Learn to Make It in Art Licensing

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It started with 10, but then there was this… and that… and soon what you see. In no particular order:
 1. Content expires. You need to rewrite, redo and refresh. Constantly.
2. Customer acquisition is both the hardest and the most important thing you will do. Customers make a career.
3. Even your best customers will wilt and eventually fade away without attention. Nurture them.
4. Passion and innovation are worthless without good execution.
5. Marketing is a solutions process that encompasses the product, placement, price and promotion. Anything less is simply advertising.
6. How you did it yesterday is irrelevant, how you do it tomorrow will be different. Look for insight into what is successful today.
7. Every business relationship you have is predicated upon making saleable product and not upon the advancement of your career or brand.
8. Often licensed products don’t get made, or don’t sell well and are cancelled, so you need to accept that with a shrug and a smile and have your next idea ready.
9. Art directors have many excellent artists to choose from and will pick the ones that are easiest to work with.
10. The market is a filter. If you cannot get traction in the marketplace you need to be open to change. Kick your ego to the curb and listen to what the outside world is telling you.
11. Your customer knows their product capabilities, markets and end user far better than you do. Trust in their judgment.
12. You need to be all in. This means sparing no time or effort to master your craft, paying for the best software, investing in trade shows and travel. Halfway in won’t cut it.
13. Selling is an essential skill and if you are not good at it, or won’t take the time to learn the skill, then you need to find someone to do it for you.
14. The message often trumps the art. Economics trumps both. If the licensee cannot make and sell the product at a profit they won’t be interested.
15. Know thy customer: provide the right art for the right people. No one spends more than a few seconds on something that is not right for them.
16. There is a balance between being true to your art and doing what you want, and creating only for the customer needs and ignoring your muse. Too much of one will make you unhappy, and too much of the other will keep you poor.
17. The majority of what you create for licensing will never be licensed, so you need to create constantly and keep feeding it into the pipeline.
Anything to add?

Some Surtex Thoughts

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Surtex is coming. This of course will come as news to you only if you have been locked in a basement with no access to all the art licensing hoopla that goes on out there. There is no end to the how-to’s, how I did its and what you should be doings available for consumption. Some are actually pretty good, some others, well, maybe doing one show is not enough to forge an expert…
SO, given that, here are a few extra tidbits they may not mention:
Don’t clutter up the booth with too many disparate or confusing images. The purpose of the art on the wall is to STOP someone so that you can engage them, not to educate them as they walk. You have about 5 seconds to get their attention before they pass by – think about that when you choose the wall art. The opposite – a super minimal booth – is also a mistake.
If you are new at licensing your focus at the show should be building relationships, not selling art. (Unless you sell outright, but that’s a different model). Ask your attendees lots of questions. You are interested in learning all you can about what they do, for a couple of reasons. People love to talk about themselves, and I mean that in a good way, so be fascinated with what they do and how they do it. Then, and only then, can you accurately gauge what work of yours may make sense for them. Until you know them do not ask what they are looking for because they probably don’t know. Your job is to discover enough information to tell them what they need to see.
Lock eyes, SMILE and say Hello as people walk by. Write that on your hand – it’s amazing how many exhibitors sit in the back of their booth and scowl through the entire show. The attendees have a lot of booths to choose from and you want them to find yours inviting. Have chairs out front and keep them open for clients, which may mean shooing the friendly neighbors away until they get the point. Stand up when you are not with clients – that’s the show version of “leaning in”.
Always have your one-sheet available, that single sheet with a few typical designs that tells who you are, what you do and lists your contact info. Use good design sense when you lay it out (white space is your friend) and remember you are not trying to sell with it, just making it easy for them to see what you do and how to get a hold of you. Have them out within easy reach for those people who do not want to stop and talk, and leave a few on the counter whenever you are not in the booth, including after hours.
Manage your expectations. There are nearly 300 registered exhibitors as of this week, and many of them represent more than one artist, some more than a hundred. Sixteen long rows of booths filled with designs from a couple of thousand artists, some with decades of experience displaying the best licensing art in the world. Can you say “intimidating”? Bring your “A” game, leave the rest at home. Show what you love and love what you’re showing because you need to exude confidence while you meet, greet, ask questions and build your contact list. Sales trainers talk about the 100-10-3-1 system, which basically means for every 100 contacts you make, your art will be actively reviewed by 10 of them, 3 will be interested and you’ll sign a contract with 1. Which means you need to get in front of a lot of people to make things happen, so don’t expect to be coming out of the show with a pile of contracts, that’s not how it works. Forget that benchmark and work on building future business.
It takes time to penetrate the market. The common wisdom is that you need to exhibit 2 or 3 times before you see any real results. Of course that translates into 2 or 3 years of significant investment, but this is a get rich slow scheme, a one licensed product at a time building process. Make that your goal and you will be a lot happier with the outcome of the show.

Just Keep On Movin’

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I am often amused when someone asks our opinion on the “licensability” of their work, and then insists on arguing about the answer because it wasn’t what they wanted to hear. Not that we are the infallible oracles by any stretch, but I do think we have learned a couple of things over the years, and hey – you asked… It turns unfortunate, however, when the same person comes back again a year later, with the exact same art, asking “how about now?” Or seeing the posts, month after month, from someone hoping to break into licensing by offering the same (apparently rejected) style of designs. Sorry, but the answer from the market is still the same. Time does not force the square peg into the round hole.
I get it that people feel they are following their dream, pursuing their passion or just looking for another path, but that doesn’t mean they are always on the right one. The path will always have zigs and zags, forks and dead ends. That is just how it works. Of course that is not news to anyone, but even people who acknowledge that fact get caught up in thinking that art is exempt, that somehow the investment of time, personality and passion means the world will just need to accept it as they created it.
That’s fine for work hanging in the galleries, but in our biz… not so much.
One of the most difficult aspects of product development is learning that, when something is not going to work, it’s time to put it aside and move on. It’s a skill that all successful creatives have mastered. Every journalist has reams of rejected articles, musicians have books of bad songs, Broadway shows close quickly, movies tank, painters have stacks of half finished canvases – it happens everywhere someone creates. Economics has a concept called “sunk costs”, meaning that the investment – time, money, passion, take your pick – has been made and cannot be recovered. It’s not human nature to just walk away from those, but sometimes that’s the best way forward. Learning to accept that not everything works is a big step toward making things that do.
“Every failure brings with it the seed of an equivalent success.” 
 – Napoleon Hill

Escape From Chicago

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Whew – just made it out of Chicago before the real slipping and sliding started. We had spent the last 3 days there attending the International Home and Housewares Show and flew out as the blizzard moved in behind us. Hugged a palm tree when we got back.
The IHHS is a mammoth once a year event held in the beautiful McCormick Place on Lake Michigan. If you have never been there, it is the largest convention center in North America with 2.6 million square feet of exhibit hall in four buildings, and this show fills three of them (North, South and Lakeside). Soaring 50 foot ceilings, sweeping curves, fountains, even decent food options – it is by far my favorite show venue. And the IHHS with over 2100 exhibitors is a pretty impressive show too.
This is a shot of one quarter of the South building from an elevated restaurant in the middle – just a fraction of the total show.
 
The Housewares Show is a little different from most others in that it’s a bit more formal – we have always said it’s a “suit” show. Literally. The place is awash with men in dark suits because that’s still largely the nature of the home and housewares business. Casual is the exception. The exhibitors cover an amazingly wide variety of categories, from the expected tabletop, cookware and kitchen accessories to appliances, cleaning products, storage, food vendors, pet products and much more. This show is also THE place to see new innovative products and beautiful industrial design. It’s everywhere, but I’m tellin’ ya nothing energizes your creativity like a walk through the High Design section, the ergonomic OXO displays, or especially the Inventor’s Corner. The show is a hotbed of smart innovation and it’s contagious – we find ourselves stopping constantly to discuss and make notes about “what if” ideas as we walk the aisles. A host of the “As Seen On TV” type companies are hawking their latest crop of “miracle” products – some of which are actually quite clever and useful. There is even an area called the “Hall of Global Innovation” displaying the IHA Innovation Award projects, some winning design student projects, a Going Green area and the Pantone Color Watch exhibit with 9 large panels of color and inspiration matched up to actual products found on the show floor.
So much great information, so little brainspace…

 Lots of candy colors in evidence, many shades of pink and green, a lot of yellow
Licensing is a big part of the home and housewares business. Most of the time the licensor/licensee matchup makes sense, but once in a while you just shake your head and wonder “who thought THAT was a good idea?”  Art, product design, celebrity, entertainment and brands all find their way into and onto products. Most artists in licensing tend to limit their thinking to the “onto” part of that equation, but it can be a lot bigger than that. There is unlimited licensing opportunity for someone who can not just make something LOOK better but can make it WORK better. A new shape, a better widget, a new twist on an old concept… artists are uniquely well suited to master these creative tasks, and you can teach and train yourself to get better at it. Work on your product development skills, beef up your creative chops, become good at seeing what others don’t and you can write your own ticket in the business.

Get A Leg To Stand On

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For some time toy designers have been lamenting the dumbing down of toy design so they can be sold in the mass market stores. Mass market sellers aim for the widest customer base possible, and unfortunately they tend to do it by aiming low. No long explanations, complicated instructions or complex outcomes are allowed for their toys, and celebrity and entertainment licenses reign supreme. But while toys for big box are fading into little more than licensed product lacking any real play quality, the smart companies are realizing they are part of a gigantic “Play Industry” which includes much more than toys – video, apps, interactive electronics, 2D and 3D craft, even social. They are not looking for just 24 or 48 inches of shelf space anymore, because what used to be of primary importance has been replaced by the need to find different revenue models in a disrupted business. They now are in a fierce competition to capture some of the kid’s attention, and need to construct and operate from a bigger “platform”.
Similar changes have come to the advertising game. People have long hated wasting their precious time on commercials, so digital disruption has hit hard as DVRs allow people to skip the ads, and to make matters worse the new entertainment and social mediums don’t mesh with traditional advertising methods. Ad agencies are faced with the prospect (necessity actually) of blowing up their traditional business methods and building a new multi-faceted platform from which they can engage people in multiple ways to successfully get their attention. Scary work.
Both of these are prime examples of what our new “connection economy” is doing to industries closely related to ours, and it shouldn’t be much of a leap for you to see how it affects you as an artist. I think the concept of working from a broader “platform” can be a useful one. Look at your business as a big picture, all of your creative and marketing efforts in total – how do they relate and support each other, and more importantly how do they relate and support building connections with your customers? Try putting together a structure chart. Identify what supports your platform and consider eliminating anything that doesn’t help build it. Leave some room for experimentation, float some balloons and pay attention to what works and why, because it changes.
I believe you need to think and act like a start-up business regardless of how long you have been in the industry. History is no longer a predictor of the future and the new mantra is “he who gets there first wins”. Stay in front of it.  

It’s A Good Bonkers

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“The day before something is a breakthrough, it’s a crazy idea. If it wasn’t, it would just be an incremental improvement.”
– Peter Diamandis, founder of the X-Prize Foundation
And the day AFTER the breakthrough it becomes known as a Brilliant Idea. Let’s not forget that the execution of that idea may have taken weeks, months or years, but that is the nature of crazy ideas – they require focus and persistence to make them work. Art licensing is a business where the great majority of the participants (on both sides) tend to approach it from safe ground, that incremental improvement viewpoint, basically offering up slightly different designs or products that will work in already-proven formats. Worse yet is what can be called a fractional viewpoint where the intent is to peel off a fraction of the existing market to call their own by offering “me too” artwork or products that match what is already out there.
Don’t get me wrong – these approaches can get you some work, and I suppose one could argue that incremental improvement is the path people may need to take – both to learn the business and to GET some business. Licensees are notorious for playing it safe. Of course there’s not much buzz about the artist who paints a few more cute butterflies or bunnies, or creates yet another graphic pattern, because generally those approaches just don’t leave much of a lasting impression.
But the artist with all those crazy ideas… the one enthusiastically spinning off a steady stream of concepts, some good, some off the mark, and occasionally a great one…
Everybody remembers who that is.

The Scientific Method

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There’s a lot of talk now about how tough art licensing is getting and how you will need to give it more than a 100% effort to get ahead. But what does that mean? What makes 100%? How does a person give more than 100%, and where do you put your efforts?
Sometimes it helps to look to science for a solution, so here’s a little mathematical formula that might help you answer these questions:

If the letters A thru Z are represented as 1 thru 26, then, A-R-T  L-I-C-E-N-S-I-N-G

comes out to: 1+18+20+12+9+3+5+14+9+14+7 = 112%
So, to achieve our goals in this business it appears we will need to give 112%! So, how does one do it? Well, note that:

H-A-R-D-W-O-R-K:  8+1+18+4+23+15+18+11 = 98%

K-N-O-W-L-E-D-G-E:  11+14+15+23+12+5+4+7+5 = 96%
and

A-T-T-I-T-U-D-E:  1+20+20+9+20+21+4+5 = 100%

So, those three will get you close, however look how far this will take you:

G-R-E-A-T D-E-S-I-G-N-S:  
7+18+5+1+20+4+5+19+9+7+14+19 = 128%, and
I-N-N-O-V-A-T-I-O-N:
9+14+14+15+22+1+20+9+15+14 = 133%
So, one can conclude with mathematical certainty that while Hard Work, Knowledge and Attitude will get you close to Art Licensing success, it’s the last two, Innovation and Great Designs that will finally bring you results.
Of course, someone had to point out that this REALLY puts one over the top:
W-H-I-N-I-N-G AND G-R-O-V-E-L-I-N-G = 212%
Well, whatever works…

Know Thy Plan

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After much discussion and some interesting phone conferences we decided to turn down a licensing deal today. It seriously pained me to do it because it had the potential to sell a ton of product, probably well into 7 figures at retail, and those situations are just not as plentiful as we would like.
So why, you ask, would anyone be nuts enough to pass that up?
It was not just the licensee, we like them and hope to continue working with them for a long time to come. Nor was it just the level of distribution, typically we love mass market deals and the volume they turn. It certainly wasn’t the art, as this brand does well in the market and has many loyal licensees. It was not any one of those things, it was actually the combination of ALL those things.
Mass market exposure is akin to a hurricane: a lot is being thrown at you with great force, and as an artist or brand you need to be like the proverbial palm tree – both deeply rooted yet flexible enough to remain standing afterwards. Many artists, brands and even manufacturers who make the leap into mass market don’t survive. We refer to it as “burned up” – you’re hot for a few weeks or months and then you’re gone. It can be a fabulous opportunity, or it can be a trap, or even both. 
The problem with the mass market level of retail is that the goals of the mass retailer do not align with the goals of the artist or brand, and if you are naïve enough to think they do you can be heading for burn territory. (Note this is not the licensee, but their customer – the one who is calling the shots.) The mass market retail business model is two-pronged – (1) volume and (2) low cost – and EVERTHING they do is in support of those. You may note that excludes a few things such as artist promotion, integrity of design, supplier profit margins, even basic survival of the brand or supplier – all those and much more are never on the radar unless it directly affects (1) and (2). Which is OK, it’s just the way it is, but never, ever forget it.
I’m not talking here about getting a gift bag, or maybe a set of paper tableware or a roll of wrap in Target or Wal Mart, because, contrary to popular opinion – nobody really notices. It’s in and it’s out. But if you are building a brand, crafting an identity or pushing a Big Idea into the marketplace, then having a plan and controlling your distribution becomes paramount. The prize is no longer a quick run on a mass market store shelf where you sell a bunch of product in 60 days but in 90 days no one can remember you were there. Now it becomes something bigger, and the timeline stretches longer. You won’t want to sacrifice the brand equity you have so painstakingly built, the goodwill of your other licensees or even the ability to leverage that special relationship you have with your posse just to have a brief run as a commodity in a big box store.

It’s a tough decision to make but so much easier when you already know the answer.