T-Shirts and Suits blog

This blog section contains new information, ideas and examples for creative people who want to make their businesses and organisations even more successful.

Written by business adviser, trainer and creative industries consultant David Parrish, these articles add to the ideas and examples published in his book 'T-Shirts and Suits: A Guide to the Business of Creativity'.

Blog posts are listed by category - see below right.
Or go to a complete list of blog posts.

Business Models - a Starting Point

A Facebook friend called Phil sent me a message asking for advice about creating an effective business model for his creative enterprise. I didn't have much time - but I didn't want to ignore it either - so I sent a quick answer. This is what I wrote:

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Here's the starting point of a business model:

1. Identify what you excel at in relation to the competition. In other words, pinpoint what you are especially good at that most others aren't.
2. Focus on the type of customers who want that thing you do really well.

Hope this helps!
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I think this summarises the essence of any successful creative enterprise, so it's a good starting point when devising a new business.

It can also be used as a 'reality check' to keep an established enterprise on track as things constantly change: rivals are improving their offerings, new firms are entering the market, client requirements develop and new customer segments emerge.

These two questions also act as an effective 'acid test' to use when evaluating a lengthy business plan. In other words, they ask whether or not the fundamental assumptions are valid before going into further detail.

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See also the article 'Create your own Business Formula' on the T-Shirts and Suits iPhone App.

P.S. For a more detailed answer, and a process to work through, get a copy of 'Designing Your Creative Businesss'  

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Discuss this on the T-Shirts and Suits Creative Enterprise Network.

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Raise your Prices!

Thanks to Leslie Burns for highlighting this article in the MIT Sloan Management Review about pricing.

All of the issues it raises about pricing strategies and pricing mistakes are relevant to the creative industries, whether you are selling products or services, even though the examples are from big manufacturing firms.

The article underlines and expands on various advice published in the book 'T-Shirts and Suits: A Guide to the Business of Creativity', connects with some posts on this blog, and links in with discussions on the T-Shirts and Suits Creative Enterprise Network.

I think some of the most important points are:

1. Look at your offerings from the customers' point of view and understand how they see value in your products and services. This new perspective may allow you to increase prices.
(See also: 'What are you selling, really?')

2. Set prices according to what the customer gets out of it, not what you put into it.
(See also: 'Art is not what you see...'.)

3. Instead of competing on price with lots of competitors who do much the same as you, focus on what you can do that they can't. In other words, focus on the areas of the marketplace where you have a competitive advantage. This will lead you to particular types of customers who need and value the things that you excel at in relation to competitors. These customers are more likely to pay higher prices because they recognise you are the best in your field.

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Discuss this with creative entrepreneurs world-wide on the Creative Enterprise Network.

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iPhone App from T-Shirts and Suits

Coming soon!
The iPhone App from T-Shirts and Suits.

The iPhone App will contain new information, ideas, examples and inspiration for creative entrepreneurs, to help them make their businesses and organisations even more successful.

The App is currently in development and being written by David Parrish, author of the book 'T-Shirts and Suits: A Guide to the Business of Creativity', the T-Shirts and Suits blog and a number of other publications, articles and blogs about creative business and the creative industries. He is a specialist business adviser and consultant with a background in the creative industries, working internationally.

Register for updates about the App and to be informed as soon as it is launched by entering your email address in the 'Receive Updates' box on the right.

We want you to help us make the iPhone App as useful as possible, so please let us have your suggestions and ideas at this development stage.

For example, let us know the areas of business development you would most like to be included in the App, eg: marketing; intellectual property; leadership; business growth; raising finance; organisational structures; competitor analysis; financial management; development strategies; etc.

Please also comment about the format, style, price - and any other issues or ideas.

You can also contact David Parrish directly with your ideas and suggestions.

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You can also discuss the T-Shirts and Suits iPhone App on the Creative Enterprise Network.

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How to make enemies

Here's a great way to multiply the number of commercial competitors you're up against - if you really want to! (OK, maybe the word 'enemies' is a bit strong.)

Many early stage businesses that haven’t yet found their specialist niche sometimes offer a very wide range of creative services (or products). This approach is often a desperate attempt to find work by 'offering everything to everybody'. Unfortunately, the 'jack of all trades and master of none' will generally lose out to a 'master' in each competitive field.

This ‘jack of all trades’ tactic instantly creates a multitude of rivals as the enterprise announces its entry into many different competitive fields. It also slams the door in the face of partnership working at a stage when the company can least afford to do so.

On the other hand, many of the most successful creative enterprises don't try to do everything - they specialise and become excellent at a few things. They then work in partnership with other businesses, devising creative collaborations that suit the client's needs.

There's more about partnership working and creative collaborations on my guest blog for Vision and Media, with examples of how businesses have worked in partnership to win work - including making TV programmes for the BBC and major international projects such as the design of the Liverpool Pavilion for the Shanghai World Expo 2010.

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Join the discussion about Profitable Collaborations on the T-Shirts and Suits Creative Enterprise Network.

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Design, Pricing and Profit

Here's a fascinating article in Wired magazine about the graphic design of restaurant menus.

This is essential reading not only for graphic designers but for anyone in the creative industries interested in marketing and pricing. So that's everyone then.

Amongst other things it includes interesting insights about the psychology of pricing. For example, a very expensive item makes other expensive ones look reasonable in comparison. This 'extremeness aversion' means that people avoid the most expensive - and the least expensive items.

This approach can be used in selling any range of good or services.

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That photo of Che Guevara

You know the one I mean. The the famous one of Che Guevara wearing a beret. It's been reproduced millions of times, not least on t-shirts and posters. You'd think it was in the public domain but actually the copyright belonged to the original Cuban photographer, Alberto Díaz 'Korda' Gutierrez - and now to his estate following his death in 2001.

Korda took the photo in March 1960 and didn't mind it being reproduced world-wide, even though he didn't benefit financially, because the image became an icon of the Cuban revolution.

He did object, however, when it was used to sell alcohol. Che Guevara, a doctor by profession, was teetotal. Korda sued Smirnoff Vodka and prevented the use of his photograph for this commercial purpose. His daughter is now involved in similar lawsuits according to the Guardian.

The point is that copyright isn't just about money. The creator's moral rights establish their authorship independently of commercial considerations. (So the credits for the song 'Yesterday' remain with Lennon/McCartney, even though they signed away the commercial rights many years ago.)

Copyright also allows the creator to control the use of their creation, preventing its inappropriate use. This applies to photos, music, film, writing and all other art forms protected by copyright.

Moral rights as well as commercial rights are important for creative entrepreneurs. All the more reason to understand copyright law and use licences such as those offered by the Creative Commons to control the usage, adaptation and commercialisation of creative works.

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Discuss this on the T-Shirts and Suits Creative Enterprise Network

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Think inside the box

I’m often asked what I believe the year ahead holds for creative industries, and this is often followed by a second question - what can be done to remain strong in the tough economic climate we are experiencing?

It may sound rather absurd, but my advice is to think inside the box during hard times.

I’ve worked in more than 20 countries over the past 12 years and helped hundreds of creative companies to grow. It’s vital creative leaders get smart, take a detailed look at the sources of business, and adopt a more tactical approach to winning new contacts.

Economic conditions are tough and if you’ve relied on hard work and enthusiasm to get results, it’s likely you’re not seeing the same level of results now. When work slows down there can be a knee-jerk reaction to go off in all directions chasing new business, but it’s not just about getting new clients, it’s about getting the right ones.

Right now the average lifespan of a SME in the UK is just 24 months, which is why it is so important to take the time to evaluate your business and work more strategically. By focusing on a just few key areas you can not only survive the recession, but emerge stronger when the economy recovers.

One common flaw I often come across is where creative enterprises haven't fully evaluated their position in a competitive market place. Even if you’re really good at what you do, if several others are better still, it's going to be difficult. So look around and identify the goods or services at which you excel in relation to competitors. In this way you can find your competitive advantage and a profitable niche.

It’s also important to remember that marketing isn’t just about winning new clients. Many businesses are so excited by the prospect of finding totally new customers that they overlook existing ones. It's much easier to keep your existing customers and win more business from them. Your current and past customers are also the best marketing department you'll ever have so look after them!

Here are my top tips for success in the creative industries:

1. Focus your financial goals on profit not turnover. As they say, "turnover is vanity; profit is sanity".

2. Identify the goods and services you excel in over and above your competitors to find your competitive advantage and a profitable niche.

3. Remember business takes place between people, not companies. Don’t hide your people, show them off by giving contact names on your websites and marketing materials.

4. Cash is king. When winning new business check credit references and ask customers pay a percentage upfront. A customer who doesn't pay, or even one that pays late, can cripple a business.

5. Marketing is not just about winning new clients. Look to your existing clients as a source of further business.

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Article first published on 08BusinessConnect

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Discuss this and add your own experiences, opinions and tips on the Creative Enterprise Network.

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Don't hide your people!

Why are you hiding?!

That's what I think when a website invites me to contact "info@abc.com" instead of a named person. Are there real people in there? If so, why are they hiding?

Customers want to do business with people, not with a website. As a potential client, I want to know who you are before I'll do business with you. (So do you - just watch yourself when you are a buyer rather than a seller.)

It doesn't matter much if I'm buying stationery supplies or other commodities, but if I'm buying a service I need to know that I can do business with you, that I can trust you, and that I like your style.

And if I'm buying a creative product I'd like to know something about the creator, their inspiration and creativity. As a customer I want to buy into you, not just your products. (See: What are you selling, really? )

Word of mouth marketing works so well because happy customers tell other people about your personality as well as your competence. But this 'personality' is much harder to get across on a website. Customers need to like you as well as respect you. Presenting your creative enterprise as a professional but faceless corporation to get them to respect you more, has the downside of making it even harder for them to actually like you.

I'm very much in favour of professional presentation, but pretending you are a huge company when you're a small or medium sized enterprise ultimately kids nobody. If they are going to do business with you, they will have to respect and like you for what you actually are. Sooner or later you'll have to 'come out', so why not do it sooner rather than later to save everyone's time? If you think some people won't want to do business with you because of your age, gender, nationality, race, location or personality - you might be right. But by the same token, other customers will love you because of what you really are!

It's worth alienating some people to attract the right kind of customers.

So don't hide your people and the personality of your creative business - show them off!

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Let's publicise creative businesses who are doing a good job of showing off their people and the personality of their enterprise. Publish your links, opinions and experiences on the Creative Enterprise Network.

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Alienate and Embrace Customers

The most successful creative entrepreneurs deliberately alienate those customers who don't matter in order to more strongly embrace those who really do matter.

This is my version of something I read the other day in the free report 'The Lateral Action Guide to Becoming a Creative Entrepreneur' by Brian Clark. 

Not all customers are good customers and marketing is about choosing the right customers; it's not about trying to please everyone. Of course this means you have to choose which customers not to deal with. It's scary to deliberately turn your back on potential customers - but not if you end up facing the right ones and then have the time, energy and resources to serve them wholeheartedly.

Alienating the wrong customers isn't a matter of being rude or unprofessional. Put your prices up and unprofitable customers will walk away; ask for a percentage of the fee upfront and the non-payers won't sign the contract; shout loudly about your values and the people who don't share them won't knock on your door (but those who do, will ).

So your marketing strategy involves deciding which types of customers to alienate so you can really embrace the right ones.

Read more about how to market creative businesses in the free eBook version of 'T-Shirts and Suits: A Guide to the Business of Creativity'.

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Discuss this article on the Creative Enterprise Network 

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Powerful Customers

My aunty is 85 years old and recently she got a new digital TV with a Sky Box. I was showing her how to use the remote control and I said, “Look at this. Imagine you’re watching a TV programme and you want to take a break or make a cup of coffee. All you do is press this button and the programme stops.” And she looked at me, in all seriousness, and said, “But what about everybody else?”

What that illustrates is the mindset of somebody who was brought up in the last century, whose social habits involved going to the cinema to watch, with everybody else, at the same time, the same films. And even more recently we all watched TV at the same time. Whereas younger consumers expect to be able to record a TV programme to watch later, or to watch it on the internet. For shorthand, we might call these ‘old consumers’ and ‘new consumers’.

In the age of Web 2.0, the interactive web, what we are witnessing is a fundamental and irreversible shift in the balance of power in favour of consumers. We no longer have passive consumers who are told what to watch, when to watch it, how to watch it - but a new breed of much more informed, demanding, tech-savvy and communicative consumers.

Consumers are no longer passive. They are creators too. Consumers are also acting as marketers and even as financiers. Technology has enabled this shift in power, but it’s consumers who are driving it and becoming much more powerful. So we need to understand the new economics of the age that we’re living in and this underlying shift in power – a shift which makes things in some ways more difficult, and yet also brings new opportunities for entrepreneurs.

Business models that deny or resist this shift in power are doomed to failure. And that includes many established businesses that are stuck in their ways, who will not or cannot change. They won’t change because they’ve invested so much in the old way of doing business: their assets, financial structures, their mindset, their skills, their staff and their whole way of thinking is based on an outdated assumption that customers are passive and can be treated as one mass.

At the same time, on a positive note, new business models that embrace the fact that consumers are now ever more powerful will succeed. As a business adviser in the creative sector I am helping creative entrepreneurs in the UK and world-wide to develop innovative ways to create profitable business models based on the new opportunities to engage with powerful customers.

The most successful creative businesses in the future will be those which follow this approach.

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This is an edited extract from a longer article based on a speech by David Parrish to a conference of TV producers in Finland. To watch the video of this speech online, visit: www.t-shirtsandsuits.tv  

This article was first published by 08BusinessConnect

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Discuss this post and add your experiences, business strategies and ideas on the T-Shirts and Suits Creative Enterprise Network.

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Profitable Collaborations

What are the essential elements of profitable collaborations when creative businesses work together?

Some ideas about effective business collaborations in the creative industries are in these articles I've written:

 - Creative Collaborations and other essential C-words published by Creative Choices (2009)

 - Creating 'Interprises' published on the T-Shirts and Suits blog (2007)

I'm interested in your experience and looking for case studies about creative businesses working together. 
 - What were the challenges?
 - What were the solutions?
 - What's your advice to other creative enterprises considering collaborations?

Please tell us your own ideas, experiences and advice about profitable creative collaborations on the T-Shirts and Suits Creative Enterprise Network.

Join the Creative Collaborations group on the Creative Enterprise Network.

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CC: Control your Copyright

Creative entrepreneurs are rightly concerned about controlling their copyright ('not getting ripped off') and generating income from their copyright through licensing, ie being a creative entrepreneur.

It seems that we used to have only two options about what to do with our copyright material - either give it away into the 'public domain', or heavily restrict its use, quoting one of those 'all rights reserved' paragraphs often found on copyright material.

But creative people often want to be more flexible about how they restrict or permit the usage of their copyright material - writing, photographs, music, designs, video, artwork, computer programs etc.

Sometimes we want to allow people to reproduce our works, but only on certain conditions, for example that they don't change it or use it commercially. Sometimes we want others to develop the work, but still credit the original artist. We might want to apply different conditions to the use of our copyright material depending on the circumstances, the works themselves or our business strategy. Sometimes we do want to adopt the 'All Rights Reserved' policy and at other times we want to take a 'Some Rights Reserved' approach.

This is where the Creative Commons movement can help. It began when creative people got together with lawyers to explore these different options for use of copyright material and then express these different options both in straightforward language and also in the form of legal contracts. The Creative Commons now offers a range of legally-watertight but also easily understood copyright licences that creative people can use.

For example, the free eBook version of my book 'T-Shirts and Suits: A Guide to the Business of Creativity' has been made available for people to copy, print and redistribute - provided you don't change it or sell it. This is what the publisher and author wanted to do, so we selected a Creative Commons licence to suit this purpose: the "Creative Commons Attribution-Non-Commercial-No Derivative Works 2.0 UK: England & Wales Licence".

Some people seem to think that the Creative Commons movement is telling us to release our copyright, but that's not the case. It's for us to decide what we want to do - the Creative Commons enables us to do it with a legally valid copyright licence.

More information and a range of copyright licences are available on the Creative Commons website.

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Discuss this on the T-Shirts and Suits Creative Enterprise Network

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What Google has found to be true

One of the Ten Things Google Has Found To Be True is:

"It's best to do one thing really, really well."

I agree.

It's all about strategic focus.

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See also: Chase One Rabbit

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What do you think?
Comment on the T-Shirts and Suits Creative Enterprise Network.

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New Business Models

Customers are more powerful than ever. Because of changes in technology, particularly the interactive internet (Web 2.0), there has been a fundamental and irreversible shift of power in favour of consumers.

Creative business that embrace this change will thrive, by using new business models such as crowd-sourcing, viral marketing, crowd-financing, buzz marketing and plogging.

The bad news is that businesses that deny or ignore these changes by continuing to regard customers as passive targets will fail.

'New Business Models in the Creative Industries' was the subject of my keynote speech to the Media and Message conference of indepedent TV producers and media professionals in Finland.

We need to be innovative about how we do business and devise new business models centred on demanding, talkative and creative customers.

Presentation by David Parrish at Media & Message, Finland.
Watch the video here (if the embedded video above does not play)
[or go to the Media & Message site and click "Puheenvuorot" (speeches). It's the last one.]

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Share your own experiences, ideas and opinions about this on the Creative Enterprise Network.

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Iron Sky: a crowd-sourced movie

Iron Sky is a sci-fi movie that will be produced collaboratively on the internet using the Wreck a Movie site and partly funded by selling 'war bonds'. Iron Sky is the next movie from the creators of Star Wreck.

It's a creative collaboration using crowd-sourcing and crowd-financing - two of the important new business developments in the creative industries which I spoke about in my keynote speech at the 'Media & Message' Conference in Finland for independent TV producers and media professionals, organised by satu.

At the conference, Timo Vuorensola from Energia Productions Oy explained how they are using the internet to help creative people work together to make a film - and the business model behind it.

The project has 1,207 members and uses the collective creativity of the people involved by breaking down a huge project into small tasks - a classic crowdsourcing technique.

Some of the capital required is raised through crowd-financing. For 50 Euros you can buy 'War Bonds' in the movie. They explain that these are not really bonds or shares, so in fact this is a donation to support the project, for which you receive a limited edition  'supporter's pack' of goodies.

For more information about the project - and how to get involved - see the Iron Sky website.

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Learn more about Crowdsourcing and Crowd-Financing in film and other creative businesses - and share your own ideas and experiences - on the T-Shirts and Suits Creative Enterprise Network.

Several more examples are in the replies on this discussion forum on the Creative Enterprise Network.

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Do you give discounts?

Thanks to Natalie Bolton from Lion Eyes Television for telling me about this amusing video.

It's fun to watch - and it raises some important issues about pricing and customers for creative businesses and cultural enterprises.

If customers believe they can get a discount from you, it's because they think they can go elsewhere and get the same thing cheaper. If they can in fact get the same thing cheaper elsewhere, then you are in a marketplace with lots of competitors offering similar products or services, all competing on price. So you are in a poor negotiating position. It's a losing battle.

Instead, build your business around those goods and services at which you excel in relation to the competition. Better still, focus on your uniqueness, providing goods and services that nobody else can. Customers will then have nowhere else to go and your negotiating strength increases dramatically.

To do this requires an understanding of your competitors and your market positioning. It means that you need to choose your customers carefully, selecting those people who want what you can uniquely offer.

So be prepared to say No when people ask for a discount. Only the wrong kind of customers will walk away, which is good because you can never build a thriving business around them. The right kind of customers - the ones who recognise the how special you are - will pay the price. These are the kind of customers to build your creative enterprise around.

 - What's your business policy when it comes to giving discounts?
 - Do you know how special you are? In other words, do you know at which products/services you excel in relation to the competition?
 - Do you target those only those customers who want what you are especially good at?

It's only when you have devised your own unique business formula, based on your speciality and your special customers, that you can say No to customers asking for discounts.

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Discuss this with other creative entrepreneurs on the Creative Enterprise Network.

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Too much advice !

Although I'm a business adviser, I rarely give direct advice to the creative entrepreneurs I'm helping. Instead, I help them to reach their own conclusions by asking questions, providing information and guiding them towards the kind of success they seek to achieve.

There's no shortage of advice. Often my clients come to me with an abundance of ideas, plans, schemes and tactics. They are weighed down by advice that has been heaped upon them by well-meaning colleagues, friends, relatives and professional advisers. It's easy for people to suggest good ideas but the effect is that the person receiving the ideas ends up with a to-do list which is impossibly long. Then they either burn out or just feel overwhelmed.

My job is to help them sort it all out and select the ideas and advice that fits best with their overall objectives. By helping to remove the burden of too much advice, I can help them to focus on the few important things that must be done next in order to become even more successful.

When people offer you ideas and advice about developing your creative business, I suggest you do two things:
1. Thank them sincerely - because no doubt they mean well.
2. Add it to your list of things to consider - but not necessarily a list of things to actually do. 

Since they want to be helpful, you could also ask them which of the things already on your to-do list they suggest you remove - to make space for their idea. It's a tough question!

The art of developing a creative enterprise isn't just trying to do more and more - it's about intelligently selecting the best things to do (and therefore actively deciding what not to do) in order to prioritise and focus energy and resources on the most important things.

We don't need more things to do. We need to decide which things are the most important things to do.

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Comment on this blog post on the Creative Enterprise Network.
(It's free to join and easy to promote your enterprise with links, photos, videos, etc)

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The Creative Business: 12 Modules

The Creative Business is a series of 12 modules of information about developing creative enterprises, written especially for people running businesses in the creative industries.

The information is particularly relevant to creative businesses and cultural enterprises in the fields of Advertising, Literature and Publishing, Visual Arts, Performing Arts, Music, Design, Cultural Heritage, and Crafts.

Published on the Creative Choices website, this series of 12 articles covers a range of business issues facing creative entrepreneurs:

1. It's Creative but is it a Business? Business Feasibility - deciding whether or not to make a business from your creativity.

2. You're Creative - but so are they! Dealing with competition - understanding your competitive advantage in relation to rivals in the marketplace.

3. Not All Customers are Good Customers. Choosing Customers - finding the right customers to fit with your creativity, ambitions and values.

4. Precision Marketing. Advertising and Publicity - communicating your key messages to customers.

5. Structuring Your Enterprise. Setting up a Business - choosing the best structure: self-employed, not-for-profit company, or commercial enterprise?

6. Make Money While You Sleep! Protecting your Ideas - using intellectual property rights to protect your creativity and make money while you sleep.

7. Creative Collaborations and other essential C-words. Working in partnership with other individuals and businesses in the creative or other sectors.

8. Raising and Managing Money. Financial Management - getting the right financial result by managing your income and expenditure.

9. Customers as Partners. Keeping Customers - listening to customers and building closer relationships with your best customers.

10. Reassuringly Expensive. Pricing - deciding how much to charge by looking at pricing and value from the customers' point of view.

11. Focusing your Enterprise - selecting priorities for development as new opportunities arise.

12. Growing your Business - key issues ahead as your business grows. 

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Read and comment on these articles by David Parrish at The Creative Business blog on the Creative Choices website.

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Raising Finance from Fans

Raising finance from loans or investments can be a major challenge for all types of businesses, and it’s especially difficult when credit is scarce and investors are feeling the pinch. So any alternative ways of raising funds are worth exploring.

Enterprises in the creative, cultural and digital sector have creativity at the centre of their products and services, yet don’t always apply that same creativity to the business side of things, such as marketing, leadership or finance. But some do. True ‘creative entrepreneurs’ are not just creative people doing business – they are creative with business too. Some of these creative entrepreneurs - especially in music and film - are exploring innovative ways of raising serious amounts of money by asking lots of people for modest investments. This ‘Crowd-Financing’ approach can be labelled ‘Fan-Financing’ when fans are the focus for investments. Here are some examples:

 

Australian musician Clint Crighton has devised a way of raising funds from his fans to record his next album. For 100 Australian dollars (about £50) you can join an exclusive club of fans which gives you special privileges: a lifetime free entrance pass to all his live gigs, a signed pre-release version of his next album, and a chance to win a trip to Los Angeles to be there at the recording of his next album. A membership of 1,000 true fans will raise the 100,000 Australian dollars he needs.

In the USA, singer-songwriter Jill Sobule invites fans to invest in her enterprise at different levels to receive a range of different benefits. From just 10 US dollars for a digital download, the investment levels rise in steps to 1,000 USD for a specially-written song for your voicemail greeting. For 5,000 USD she will perform a concert in your home and if you want to invest 10,000 USD you can sing along with her on her next album.

In the UK, Slice the Pie is a sophisticated music investment site which allows you to invest in the future success of a wide range of musicians. (I’ve invested £100 in Sarah Grace.) This model also uses a voting system to find and filter talent and then voters are invited to invest. Like the X-Factor and Britain’s Got Talent, this model cleverly involves the ‘crowds’ in voting - and at the same time builds a base of followers who eventually become customers or investors.

Three British teenagers raised £105,000 by selling credits in their film - for just £1 you can have your name listed in the closing credits. Award-winning Merseyside writer and film director Fiona Maher sold bit-parts in her film on eBay to raise money for her first full-length feature film. A new film called The Age of Stupid is using crowd-financing to raise investment from the public by selling shares priced £10,000 which entitle investors to a share of the profits.

 

Music and film are leading the way with fan-financing in the creative industries, but surely other enterprises - in the creative sectors and elsewhere - could adapt these models to their own situations and raise much-needed cash by adopting this crowd-financing approach.

 

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This article was first published by 08businessconnect.com   

Copyright David Parrish 2009. Some Rights Reserved.

 

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20 Things You Must Know

Thanks to Alun Parry for telling me about Andrew Dubber's excellent free eBook
New Music Strategies: The 20 Things You Must Know About Music Online.

It's a must for anyone in the music business.

And for everyone else too.

For other creative entrepreneurs it has lots of useful information about Web 2.0 business strategies, the Long Tail, and lots of good advice about internet marketing in general.

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Art is not what you see...

"Art is not what you see, it’s what you make others see"

 - Edgar Degas, French artist (1834-1917)

 

I agree with this statement, which switches things around nicely, so that instead of thinking only about our own point of view as the creator, we also look at things from the point of view of the audience/client/customer.

 

In the context of combining art and business, Degas helps us to think about Marketing and Quality in useful ways. I suggest that:

 

 - Marketing is about looking at things from the point of view of the customer (or "audience" or "client" if you prefer).

 

 - Quality is not what you put into it, but what the customer gets out of it.

 

I'm sure Edgar Degas would agree.

 

Furthermore, what you 'make others see' might be a variety of different things. According to Charles Leadbeater in his essay 'The Art of With', the writer Umberto Eco "long ago declared that works of art were open to multiple interpretations; the reader was as active in creating meanings as the writer."

 

In business terms, we need to be open to these various 'meanings' or 'customer interpretations' because otherwise there can be a big difference between what you think you are selling and what the customer is actually buying. What you consciously or unconsciously 'make others see' could be a lifestyle, a feelgood factor (or even a 'feelbad factor'), or maybe a 'talking point' or a 'story' when they buy your creative product or service.

 

What both Degas and Eco are saying is that we need to be aware that other people (the audience/reader/consumer/customer) might see things differently than we do.

 

Understanding how clients see things and perceive customer benefits helps creative entrepreneurs to become even more successful in terms of marketing, pricing and choosing the right customers.

 

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Share your own thoughts and experiences about all this on the Creative Enterprise Network.

 

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Raising finance the AEV way

Steve Messam is a talented artist - and a shrewd creative entrepreneur.

Steve was approached by Cumbria Tourism in the UK to create an art installation to help publicise the launch of their campaign for cultural tourism. The budget offered was a modest £4,000 GBP so Steve put together a business case for a bigger budget. He knew that the client wanted publicity and so argued that a bigger investment in a more impressive work of art would pay dividends in terms of 'Advertising Equivalent Value' (AEV) - in other words, the cost of the publicity in column inches if it were paid for as advertising.

Steve pitched his idea and business case to the PR Agency Colman Getty, who specialise in arts related work and had been commissioned by Cumbria Tourism to publicise the art installation and campaign for cultural tourism. Using data from previous projects, Steve calculated that the Advertising Equivalent Value should be at least £150,000 GBP and possibly as high as £250,000 GBP, provided the budget for his art installation was increased six-fold. Colman Getty understood the commercial value of the PR that could be generated and helped Steve to convince the client to invest accordingly.

The result was a spectacular installation called 'Drop', a huge inflatable sculpture modelled on a drop of water. The sculpture was installed at various scenic locations in the English Lake District. Part of the publicity campaign was to encourage tourists to take and publish photos of the huge silver sculpture and this viral marketing helped to promote the campaign further.
See photo below. More images of Drop can be seen in this pool of photos on Flickr.

 

With the help of Steve Messam's art, the campaign was highly successful and exceeded its targets in terms of publicity. In one weekend alone, over 10,500 people went to see it. News and images even reached the world's biggest circulation newspaper, China Daily.

Steve's reputation - and his creative enterprise - goes from strength to strength. He will be exhibiting his latest art installation at the Venice Biennale in June 2009, raising finance in a similar way using the business case of Advertising Equivalent Value, rather than an application for an arts grant.

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Discuss this and other ways of raising finance on the Creative Enterprise Network.

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'Crowd Financing' to fund a film

How do you raise finance for a feature film?
(Or any other creative enterprise, for that matter.)

It's an expensive business, but some creative entrepreneurs think imaginatively about raising money, including raising small amounts from lots of people. Like 'crowd-sourcing', 'crowd financing' allows many people to participate in a small way to have a great collective effect. This 'crowd-financing' approach is now more feasible than ever before because of online networks and ecommerce technology.

Fiona Maher sold bit-parts in her film on eBay and now three British teenagers have raised £105,000 (105,000 GBP) so far, by selling credits in their film for just £1 (1 GBP) each, according to this article in the Guardian.

Congratulations to these entrepreneurs for using their creativity to think also about finance as well as their film projects !

PS: Thanks to Felix Holm for his reply on the discussion forum, letting us know about 'Boy Called Twist', a South African film financed this way.

PPS: Thanks also to Hannah Rudman for providing links to the excellent site The Age of Stupid (Crowd Financed film with funding models, budgets etc) and the fundraising/campaigning site The Point.

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Join the discussion forum about Crowd Financing on the T-Shirts and Suits Creative Enterprise Network.

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Creative Enterprise Network

T-Shirts and Suits has set up an online Creative Enterprise Network to help creative people world-wide to promote their enterprises and to network with each other across national and cultural boundaries.

It's free to join - and easy to upload photos, videos and information.
The network includes blogs, events and discussions.

There are specialist groups within the network, including:
 - Creative Collaborations 
 - Digital Creatives
 - International Connections 
 - LatinoAmerican Creatives
 - Freelancers
 - Creative Students
 - Graphic Design
 - Business Partnerships 
 - Advertising and PR
 - UNESCO Project

You are invited to join the network and to invite friends, colleagues and contacts to join too.

The network welcomes anyone involved directly or indirectly in the creative industries, cultural industries, creative businesses, cultural organisations, cultural enterprises and creative industries support organisations.

The network is especially useful for creative entrepreneurs in all sectors of the creative industries: design, music, publishing, architecture, film and video, crafts, visual arts, fashion, TV and radio, advertising and PR, literature, graphic design, marketing, computer games, the performing arts, including designers, photographers, advertising and PR, musicians, writers, new media professionals, artists, marketers, publishers, fashion designers, architects and designer-makers.

Creative industry organisations world-wide are also invited to join.

www.creative-enterprise-network.com

   

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The Business of Culture

For many people, the words ‘business’ and ‘culture’ don’t sit comfortably side by side. Some people assume that culture has to be non-commercial to be valid, and therefore to apply commercial thinking to cultural endeavour is to pervert it. But even charities and ‘non-for-profit’ organisations in the arts and cultural sector need to be business-like, even though the traditional business motive of profit maximisation does not apply.

Many people in the arts are reluctant to use business terminology, despite being very professional and successful in achieving their aims. When I was interviewing creative enterprises for my book ‘T-Shirts and Suits’, several managers said that they had never devised a ‘business strategy’ or used ‘market research’. These terms were simply alien to them. In fact they did do these things, but didn’t use those words or document these processes conventionally. More often than not they were skilled at growing their business and excellent at listening to customers. Ironically, cultural organisations and creative businesses are often keen to shun commercial jargon whilst actually using smart ‘business thinking’ to achieve success in their own terms.

My own background is in the cultural sector and later I also studied at business school, so I’m comfortable with business jargon but at the same time I understand the sensitivities within the arts about business vocabulary. Recently, in preparing a training workshop for arts organisations I was asked not to use the term ‘customers’ but use ‘audience’ instead. It’s a matter of choosing vocabulary appropriate to the context. In my book I feature the Windows Project, a cultural enterprise which devised a ‘Development Plan’ rather than a ‘Business Plan’ because that term fitted better with their ethos. Despite its name, it’s as robust as any business plan from the commercial sector.

The cultural sector can and should learn from other sectors, but it’s a matter of sensitively adapting techniques to fit into a different context - and maybe changing the terminology too. Equally, the commercial sector can learn from the cultural sector, but need to see what’s actually happening rather than being put off by the lack of business jargon. For example, I’ve been engaged by international corporations for revealing to them management techniques which are commonplace in the arts world, but I’ve expressed them in business-speak to make them more acceptable to pin-striped clients.

So it’s the terminology that’s the issue, not the reality. Lack of business jargon doesn’t indicate an absence of smart ‘business thinking’. It’s a point worth making, for two reasons. Firstly to dispel the myth outside the arts sector that cultural organisations are somehow ‘amateur’, simply because they use different language. Secondly to challenge the belief held by some in the cultural sector itself that using business terminology to describe what they do inevitably means somehow ‘selling out’.

In the end, it doesn’t matter whether or not we choose to use the jargon of business. What really matters is being clear about our definitions of ‘success’ and then achieving it. Then we can all become even more successful by using appropriate management methods and techniques which fit the objectives and ethos of our organisations - in the cultural sector or elsewhere - whatever vocabulary we choose to use.

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This article was first published by www.08BusinessConnect.com  
Copyright David Parrish 2009. Some Rights Reserved.

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Creative Enterprise Network

Creative businesses and cultural enterprises can promote their organisations, products and services through this online network.

This free network for creative people in business can be found at:
www.creative-enterprise-network.com  

This creative entrepreneurs' network features videos and photos from creative enterprises and allows creative entrepreneurs to interact to publicise events and share smart business ideas through discussion groups, blogs and even live chat.

An international creative industries network, CEN was launched as "T-Shirts and Suits (Creativity and Business)" by David Parrish, author of the book 'T-Shirts and Suits: A Guide to the Business of Creativity'.

There are other T-Shirts and Suits networks for creative entrepreneurs, including a group on Facebook, and T-Shirts and Suits Coffee Club events, which are also free to join and open to everyone involved in (or interested in) creative businesses, cultural organisations and the creative industries.

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Three Top Tips

I was asked to give "three top tips" to creative entrepreneurs in an interview about how to successfully blend creativity and business.

Ellie Stevenson interviewed me, along with Nick Williams of 'Inspired Entrepreneur'.
Read the full interview on the ArtsHub website.

Here's an extract:

Can you give us three top tips for running your own successful creative business, David?

1. Firstly, define what you mean by success – it could be a mixture of financial success, creative challenges, recognition, job satisfaction, quality of life, etc, and that formula will be different for everyone. Define what you mean by success, don’t let others define it for you, and know where you want to go.

2. Be clear about your market and don’t try to sell to everyone. Choose your customers. Choose customers that fit your objectives and your ethos and that deliver the financial results you want. Don’t have a scattergun approach, looking for any old customer. Choose the customers that work best for your business strategy.

3. Understand intellectual property (IP), because IP is at the core of the creative industries. It’s important to make sure you don’t get ripped off by other people, so it’s about defending and protecting intellectual property; but just as importantly, it’s also about how to commercialise that IP so you can make money from it, through sales and licensing, for example. Given that IP is so central, I think most creative businesses could do with knowing a bit more, and learning how to use it.

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Note: This is an extract from an article by Ellie Stevenson, first published on ArtsHub UK.

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Share your own Top Tips with other creative people in business on the Creative Enterprise Network

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Creative Business Guide

A useful and readable 'Creative, Cultural and Digital Industries Guide' has been published by Business Link West Midlands

It is available in hardcopy from Business Link West Midlands and downloadable as a free eBook in PDF format below.

This creative business guide was written by David Parrish, author of the book 'T-Shirts and Suits: A Guide to the Business of Creativity'.

The 48 page publication covers a range of issues relevant to enterprises in the creative, cultural and digital sectors.

Sections include:
 - Strategic Planning
 - Understanding your Customers
 - Profiting from your Ideas
 - Organisational Structures
 - People and Skills
 - Promoting your Products / Services
 - Financial Management
 - Legal and other issues
 - Links to useful organisations and resources for creative enterprises

There are also four case studies featuring creative enterprises from the West Midlands region: 383 Project, Stan's Cafe, Gas Street Works, and Capsule.

Download PDF:
Creative, Cultural and Digital Industries Guide (PDF) [3.2 MB]

Businesses in the West Midlands region of England can obtain a hard copy of the Guide.
Contact Business Link West Midlands on 0845 113 1234.

The creative industries guide was designed by iDM Design, Wolverhampton

This creative business guide was written by David Parish of TShirts and Suits.
David Parish retains copyright in this material and other writing about the business of creativity, as published in the book 'T-Shirts and Suits: A Guide to the Business of Creativity', the publication 'Designing Your Creative Business' and a series of other articles, blogs and 'Ideas in Action' features.

Similar creative business guides can be written for other organisations in the creative, cultural and digital sectors.
Contact David Parrish to discuss options and possibilities for your own version of this creative industries guide.

 

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Are You Busy?

"Are you busy?" is often a conversation opener between creative people in business.

The implication is that you should be busy; if you're not busy, then something is wrong.
So it seems that the 'correct' answer is "Yes, very busy!"

But wait a minute !
Busy doing what ?

It's easy to be busy, busy, busy. Mainly because it gives us an excuse not to Think.
Thinking is difficult. Running around being busy is actually much easier.
There are many "busy fools" out there, trying to do too much - and achieving nothing.

"Action is easy; thought is hard", wrote Goethe.

“Being busy is a form of laziness – lazy thinking and indiscriminate action”
says Timothy Ferris in his book 'The 4-Hour Work Week'.

I'm writing this at the end of the year, which is a good time for reflecting on the past and making plans for the future. (But we should reflect and plan more often than once a year, so anytime is good.)

Personally I'm going to make a resolution to be less "busy-busy" and focus on doing a few things really well and in a less frantic way. Then my answer to the common question "Are you busy?" will be an uncommon "No not busy - but highly effective." (Wouldn't that be a cool thing to be able to say?)

But first, the hard part. It means I need to stop and think, then decide what are the most important things I need to do - and therefore what not to do - in the coming year.

I'm going to think and make some strategic decisions.

What about you?

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Winning in Hard Times

How will creative businesses cope in the economic downturn?

That’s a question that I have been asked many times recently, both in the UK and overseas.

In response, I make the following points:
 
Though the general economic situation is difficult, the recession will not affect all businesses equally. It is not inevitable that all businesses will suffer. So individual entrepreneurs need to look at their own specific circumstances. There are opportunities as well as threats in times of economic hardship.
 
Hard times affect competitors too. If your competitors are hit harder than you, then the economic climate can provide some competitive advantage. In my book T-Shirts and Suits I use the analogy of running uphill to point out that though it hurts, you can still get ahead of your rivals if it hurts them even more and you are fitter at uphill running. Some businesses will become insolvent – make sure you survive when your competitors don’t.
 
In a meeting in Liverpool with the UK Minister responsible for creative industries, Barbara Follett MP, several creative enterprises reported that the recession had prompted them to tighten up their systems and practices, especially credit control, which actually helped them to make their businesses more efficient and financially stronger. In some ways, the recession is a blessing in disguise.
 
The economic downturn will undoubtedly put pressure on businesses in the creative sector. This pressure will reveal weaknesses in individual firms that have so far gone undetected. Various crucial aspects of business will be tested, for example: customer relationships, fixed/flexible cost structures, credit control and cash flow, customer base (eg overseas clients), staff loyalty and commitment, and other factors.
 
Now, more than ever, businesses need to concentrate on the basics.
 - Focus on the products and services at which you excel and make you stand out from the crowd. Play to your strengths and make the most of your competitive advantage.
 - Keep your existing customers and build on the client relationships you have nurtured.
 - Pay close attention to cash flow planning and management – “cash is reality”.
 
There is no better time than now to focus on the essentials of your business strategy.
 
For some creative businesses, the economic downturn will be a time for winning, not losing. 

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Copyright © David Parrish 2008.
First published in Creative Times Online

The LEGO Crowd

Lewis Pinault from Lego Serious Play addressed the Creative Clusters Conference in Glasgow - and I had fun making a duck (see photo).

Lego Serious Play helps businesses think creatively using Lego in group settings to discuss business issues. For example entrepreneurs can express their shared vision for the business by first creating a model which expresses their hopes and fears. This fun activity leads to serious discussion and new insights.

As a bonus, the manual dexterity needed for this kind of creative play stimulates parts of the brain that other activitie do not reach, apparently.

Lego also invites its millions of users to design new bricks and kits for the company. As Lewis Pinault said "this open platform needs tons and tons of volunteer designers." In other words, adopting the Wisdom of Crowds or Crowdsourcing approach, the company uses the ideas and energy of people outside the business to create new products it can sell.

Another example of Crowdsourcing, from the book Wikinomics, is about a Canadian gold mine, Goldcorp Inc, which published its geological information on the internet and offered $575,000 in prize money to anyone who could help them find more gold. Submissions came from all over the world and transformed the $100m company into a $9bn giant.

Instead of keeping information and ideas in-house, sometimes it's better to share data and engage with the crowd to collect new ideas and design better products and services.

PS: The crowd of Lego fans also promote the company indirectly using viral marketing by publishing more than 55,000 videos of their Lego models on YouTube.

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Let me know how your creative business uses Crowdsourcing techniques.

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Business Growth: Does Size Matter?

Part of my job as a business adviser in the creative sector is to ask questions – sometimes awkward or unexpected questions. So when entrepreneurs ask my advice about how to grow their businesses, my first questions are: “Why do you want to grow?” and: “What do you want to grow?”

Why grow? There is often an assumption that bigger is better, but this is not always the case. It depends on what we mean by ‘Better’. Defining ‘Success’ is my starting point when discussing business development with entrepreneurs and clearly this is a matter for them to decide, not me. For some people it’s purely about money, for others a particular lifestyle, and other factors such as creative passion, autonomy, recognition, and social impact are often part of the mix.

Grow what? Many businesspeople express the growth of their enterprise in terms of their turnover, or number of employees. These are useful measures, but are they the most important? When I watch PowerPoint presentations about the growth of a particular business and the graph of increasing sales is displayed with pride, I ask about profitability. Profitability can actually go down, at least in percentage terms, as turnover grows. As the saying goes “Turnover is vanity, profit is sanity”. We need to measure the most important things that are part of our definition of success.

“And cash is king”, the same saying concludes. Growth can often lead to severe cashflow problems, especially if fixed costs increase as businesses develop. Having high fixed costs can lead to desperation for cash to pay monthly overheads, and as a result, many enterprises have accepted unprofitable work, which makes problems worse. The businesses best placed to survive the credit crunch are those which have flexible costs and are able to grow and contract according to the volume of work, month by month.

Some businesses grow by design, others by default. When I ask business owners about their plans to grow to the size they now are, the response is sometimes: “We didn’t plan – it just happened”. In other words, they got busy, took on a couple of employees, moved to a larger office, attracted new clients, employed more people, and so on. Sometimes they find themselves in an unhappy and uncomfortable position. The creative entrepreneur sometimes looks back wistfully on the days when they were hand-on themselves instead of managing others doing the creative work. And they remember fondly the nights they slept soundly, without worrying about how to pay everyone at the end of the month. For some enterprises, they have grown too much, almost by accident.

Some entrepreneurs design a business which ultimately they can sell as a going concern, without it needing them to be involved. They work ‘on’ the business rather than ‘in’ it. They design themselves out of the picture. Instead of creating a trap for themselves, they achieve liberation. For creative entrepreneurs, the key to doing this can be found by using intellectual property rights to create income streams independent of their ongoing labour.

In conclusion, the most successful enterprises have business growth strategies which are based on a clear definition of what they mean by ‘success’ – and they evaluate progress towards their goals by measuring the right things.

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Discuss this subject on the Creative Enterprise Network

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Copyright © David Parrish. 2008. Some Rights Reserved 

First published by 08businessconnect

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... and what we didn't do

The most focusedcreative enterprises are clear about where they want to go and have a clear vision of the future and exactly what 'Success' means.

In a 'Designing Your Creative Business' workshop for creative entrepreneurs in Taipei, sponsored by the British Council in Taiwan and the Taiwan Design Centre, I suggested a technique to help develop a business strategy.

1. Firstly, imagine you are already in that successful place in the future. Maybe you are being interviewed by a journalist about your journey to success.

2. Then look back on the most important things you did to get to that point. These are the things that really made a difference - the things you are most proud of when you look back.

3. Now return to the present, and those key things you were looking back on are now still in front of you. They are the main elements in your business strategy.

In my book T-Shirts and Suits I recommend that sometimes we need to Say No in order to focus on the right things to do. This came up again in a conversation after the workshop.

So we also need to reflect on what we deliberately didn't do, which helped us achieve success.

And these 'Things Not to Do' in your business strategy are just as important as the things you must do.

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Viral marketing - MUTO video

Thanks to Danielly Netto from Newcastle University Business School, who's researching business models in the creative industries, for including this viral video in her presentation.

This is a video from artist BLU showing the awesome MUTO 'animated graffiti' work in Buenos Aires.

Published on the internet using a Creative Commons licence, it's already had about 3,000,000 views on YouTube so far and received nearly10,000  comments.

The business model used has been categorised as 'Findability/Creative Investment'. In other words, the creator gives something away for free in order to reap financial benefits by other means. It's one of the 3 (or 14) Kinds of Free.

It's a brilliant example of viral marketing !!

See also Viral Marketing Video from Berlitz.

See also Buzz Marketing

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Don't be a 'Poor Pioneer'

I often advise creative entrepreneurs who have innovative products or services. Sometimes it's a completely new idea and they are planning to open up a new market for it.

Someone asked me whether I'm ever tempted to 'steal' the ideas people tell me about when I'm advising them. My answer was firmly No, for two reasons - more later.

My job as an adviser is to ask questions, including tough ones, to help entrepreneurs make their creative businesses even more successful.
One question that goes straight to the heart of business strategy is this:
"If you are successful in developing your new product or service, and open up a lucrative market for it, what is to stop other businesses (perhaps bigger businesses with more resources and power than you) following you into the marketplace and taking most of the profits?"
It's a killer question that sometimes people cannot answer.

Sometimes the truth is that there is nothing at all to stop others joining the party once all the hard work has been done. In this case I fear for the business concerned. I tell them that they may end up penniless after opening up new frontiers - they may become a 'Poor Pioneer'.

Creative people take pride in being 'groundbreaking'. But breaking the ground for others to make all the profit is not so smart!

In other cases the entrepreneur's answer is that other businesses cannot enter the market and take the profits, because they have created some sort of 'barrier to entry' to prevent others joining the party. In creative enterprises the barrier to entry is often some kind of intellectual property such as a patent or copyright-protected work. In this case copycats cannot easily follow them into the marketplace with 'me-too' products or services.

Intellectual Property Rights are the creative entrepreneur's defence against commercial predators.

Which takes me back to the question of why I don't copy my clients' ideas and set up a rival business.
The first answer is that it would be unethical to do so and I have a reputation to protect.
However the second answer is more pertinent and more powerful; it is in two parts:
1. I don't want to steal something that in turn can be stolen from me. In other words, if there isn't a barrier to entry for me, then there isn't a barrier to entry for further competitors. I too could end up being a Poor Pioneer.
2. The business initiatives I really do envy are those that do have barriers to entry, that have some kind of monopoly rights for the owner to exploit alone. But of course these are the very ones that I cannot steal!

So I either (1) don't want to, or (2) cannot set up as a competitor to my client after hearing about their new business initiative.
I'm still ethical, of course, but that's not really relevant here.

The most successful creative enterprises are capable of both (a) developing new products or services and (b) using intellectual property rights to protect their position against competitors so they can enjoy the fruits of their creativity without 'new entrants' stealing market share. 

So don't be a Poor Pioneer, looking back bitterly on all the creative work you did, only to find that other people made all the money from it. Use intellectual property rights in partnership with your creativity, to devise a successful business model.

It's much more fun to be a Rich Pioneer !

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See also: Creative Labourer - or Creative Entrepreneur? and Let's follow George Lucas

Artist's 'Second Life'

Artist Ken Walters sells his work in the virtual world Second Life, as well as in real life to galleries, individuals and companies.

I met Ken when he attended one of my training workshops for creative people in business and I was fascinated by his personal story as well as his artwork. A feature in The Guardian tells how a stroke made him into an artist, giving him another kind of 'second life' after previously working as an engineer, without any kind of artistic training. He now runs a successful creative business from his home in the North of England.

He has combined his new talents as an artist with a marketing strategy which includes a variety of online and virtual media including Second Life. Ken also publicises his work through social networking sites and has published images in the "T-Shirts and Suits (Creativity and Business)" international group for creative people in business within Facebook.

His income is derived from direct sales and through the licensing of his intellectual property.
Global corporation EA Games were impressed with his work and commissioned him to design 100 digital dinosaurs for a new educational game called Spore. Ken retains ownership of the copyright in the designs and gets a cut of merchandise sales as part of the licensing agreement.
In this way he is developing additional income streams as a Creative Entrepreneur.

Ken Walters can be contacted by email (mail@kwdag.biz) and his website address is http://www.kwdag.biz/.
His character name in Second Life is Blunt Fhang.

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3 (or 14) Kinds of 'Free'

Thanks to Hannah Rudman for sending me a link to an article on Chris Anderson's 'Long Tail' website about '14 Free Business Models', which is based on a paper entitled 'Copying and Copyright' by Google's economist, Hal Varian.

The 14 business models which involve giving things away free include: 'Sell Physical Complements', 'Advertise Yourself', 'Sell Information Complements', 'Site Licences', 'Sell Other Things', 'Sell Personalised Versions' and 'Ransom'.

Another blog post by Chris Anderson is about The Three Kinds of Free, ie (1) 'Cross Subsidy', where giving away one thing leads to sales of another, (2) 'Third-Party Subsidy', where advertisers, for example, pay for free content and (3) the 'Freemium' business model, where the vast majority of consumers get the product for free and a small percentage pay a premium for some kind of enhancement which subsidises free distribution to the majority. "In this model, charging a small percentage of a large user base beats charging a large percentage of a small user base", Chris Anderson says.

There are plenty of good reasons to give things away for free - including making more money.
The decision to publish my book 'T-Shirts and Suits: A Guide to the Business of Creativity' as a free eBook was based on the same kind of thinking as the business models described above.

Read also 'Give it away free' which includes example of how creative enterprises in Brazil and China have given things away free for smart business reasons.

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Creative Times: Getting ideas from unusual places

A great place to get ideas is from business sectors outside the creative industries.
Why not buy a few magazines you've never read before?
Or go to a networking meeting of professionals from an industry you've never engaged with.
Creative people should get out more!
Read article >

Creative Times is now online ! 
Link: www.creativetimes.co.uk

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Passion in business

"Do you have to abandon your creative passion to become more businesslike?" is a question I am sometimes asked when I'm talking with creative people in business. My answer is that passion is essential in a creative business. We need to harness it, not deny it. And we must stay true to our values as our creative businesses develop and grow.

Randy Komisar's book Monk and the Riddle, The: The Art of Creating a Life While Making a Living is a modern fable about life and work, set in California's Silicon Valley. It emphasises the need to integrate passion and values into your business objectives. It's an inspiring read. Its main audience is businesspeople who are driven to make money, so they can indulge their passions later, what he calls their 'Deferred Life Plan'. Komisar's message is about the importance of passion at the heart of a business strategy.

Creative people in business have plenty of passion - it's the business strategy that's sometimes the weakness. That's why my own book 'T-Shirts and Suits', written especially for creative entrepreneurs, starts with the assumption of a creative passion then explains several crucial business issues which must be combined with passion to create an effective enterprise.

Komisar and I agree: it's not a matter of choosing either/or, whether to be passionate or businesslike, as if one excludes the other. It's a matter of integrating both, in harmony. The metaphor and philosophy of 'T-Shirts and Suits' is about bringing together creative passion and smart business thinking in intelligent ways that are consistent with our values.

The best strategies involve passion - and other essential business factors.

Jim Collins' Hedgehog Strategy involves identifying what you are passionate about - plus an understanding of how you create value and in which area you can excel in relation to competitors.

Rob Kinsey is an artist with a passion - and a focus. His focus is to select a particular market he knows well and he has become successful because of this focus combined with his passion.

Sara Lönnroth's phrase "Let your heart drive you and your head guide you" emphasises the need to combine heart and head - passion with clear business thinking.

Passion is vital, but it's not enough. Necessary but not sufficient.

But passion at the heart of a creative enterprise which also uses its head to devise a clear business strategy is a potent combination.

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Chase one rabbit

Here's some ancient wisdom from a Chinese proverb:

"If you chase two rabbits, both will escape."

A useful thought for all creative entrepreneurs.

It can be applied to:
- deciding which creative speciality to choose, from all the creative things you can do.
- deciding which particular market segment to focus on, rather than trying to appeal to many types of customer.

This is discussed in more detail in my article: Create your own Business Formula.

See also: Ten Things Google Has Found To Be True

PS: Another animal to take inspiration from is the Hedgehog.

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The Art and Science of Advertising

The best advertising agencies know that the 'creative' elements of advertising are just the tip of the iceberg - or the 'icing on the cake'. Less visible, but equally important, is the market research and clear understanding of customers' want and needs. Advertising legend David Ogilvy emphasised the importance of researching how customers think in his book Confessions of an Advertising Man.

The science of psychology has a lot to offer too. A fascinating book called Yes! 50 Secrets from the Science of Persuasion uses psychological research to demonstrate how advertising can become more effective by using science as well as art.

Here are just a few examples:
- setting a very high price for one option in the pricing range makes the other prices look very economical. In other words, the £2,000 version doesn't look so expensive any more, once a £5,000 version is added to the range (even if it doesn't sell). This applies to services as well as goods.
- customers are more likely to behave according to what other people do, rather than what they 'ought' to do. In other words, it's more effective to appeal to customers' need to be part of the group than their sense of what's right or wrong. The example in the book is about a campaign to encourage people to re-use hotel towels. People responded better to the fact that other guests were doing this, rather than to an appeal for guests to 'save the environment'.
- loyalty cards with a few free stamps already attached are more likely to be used by customers. (A ten-stamp card with two already attached is more likely to be used than an empty eight-stamp card). Still needs eight more purchases but it's perceived very differently.

These 50 secrets from the science of persuasion can be used by any creative business, not just advertising agencies, to help make any kind of promotion, publicity and sales initiative more effective.

We need to underpin our creative advertising with the scientific facts.

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Get out more !

At the launch party for Creative Times Online, which was full of 'creative industries' people clustering together, I met a civil engineer.

Civil/structural engineers don't normally attend these gatherings of 'creatives' (fashion designers, musicians, writers, film-makers, advertisers, artists, website designers, broadcasters and publishers, graphic designers, performers, computer games programmers, designer-makers, etc.)

So I was intrigued. This engineer was looking for new ideas from outside the world of engineering, by learning from people in other sectors.

I consider that kind of lateral-thinking to be creative.

It reminded me of Peter Drucker's criticism of how people tend to stay within their comfort zones:

"Most [executives] think they are in touch with the outside world if they play golf with the vice-president of another company in the same industry."
- Peter Drucker. Management Guru. (Financial Times. London. 16 November 2004.)

In contrast, the most effective (and most creative) people learn from other industries and sectors. (See article on Lateral-Thinking Leadership.)

I then looked around the room and wondered how many of these 'creative' people ever go to gatherings of engineers, hoteliers or bankers in search of new ideas, business methods, or customers.

Probably very few.

We should get out more.

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Rolls and Royce

Successful creative businesses need a combination of creativity and business strategy - what I call 'T-Shirts' and 'Suits'.

Sometimes, one individual has both of these elements in good measure, but more often than not, the harmony of creativity and business is formed by two people, or a larger team.

Frederick Henry Royce met Charles Stewart Rolls in Manchester in 1904. Royce was the engineer and Rolls the businessman, and their partnership formed the world-famous company Rolls-Royce.

Jennifer Harris, writing in Management Today, points out that different skills can combine in a complementary way but different attitudes cannot. I agree.

There must be a shared vision for the enterprise, even if the partners involved are very different characters with different skills. So the shared vision is in many ways the starting point. If people are working hard together but with different goals in mind, conflict - or at least stalemate - is likely to occur.

Matters of risk, growth, financial reward and lifestyle are all issues about which partners might have different views. If these are not in harmony, each person may have a valid, but different, business strategy in mind as their road map to different destinations.

Success means different things to different people, so simply agreeing together that you want the business to be 'successful' is not clear enough. Working towards different definitions of success will inevitably bring problems. That definition of success needs to be clearly defined and agreed.

"Start with the end in mind", says Steven R Covey in his bestselling book The Seven Habits of Highly Effective People.

Having that clear vision of the future, and then starting with that end in mind, is exactly what successful creative entrepreneurs do.

Good Enough...

Thanks to Phil Birchenall for sending me this article about the Flip Video camcorder. It's about a simple and inexpensive camcorder that's "good enough" rather than being "the best". It has just the right range of features to be usable and useful, at a reasonable price. It's opened up a new market of 'ordinary' users, not just video enthusiasts.

It got me thinking more about Quality.

Creative people in business are rightly concerned about Quality. However, quality is subjective, not objective. And in business terms, the customer's perspective is vital. Sometimes creators add "too much" quality, not because the customer demands it but simply because the producer wants to - or thinks they ought to.

I recently bought a digital camera. Not the 'best' or the most complex, but one that is small and light enough to take with me without having to decide every day if I really want to carry the extra weight. As a Nikon, it's well built and I expect it to be reliable. Also it was easy to obtain and sold at a reasonable price. It does the job for me, it's 'fit for purpose', therefore it's 'quality'.

Quality has many dimensions because the consumer takes into account price, convenience, speed of delivery, maintenance costs and usability in deciding their own definition of quality. So we need to think about offering Quality in different dimensions.

For example:
- Artists sell limited-edition prints. Not as good as the original but good enough for many people.
- A product can be designed to be biodegradable - so it deliberately doesn't last too long.
- Publishers can offer an eBook version now instead of the paperback delivered by Amazon next week
- Websites can be designed without too much technical complexity so they are accessible to blind people using speech synthesis software
- Film-makers can also create short videos instead of a full documentary, quickly, in an internet-ready format, on a fixed budget, without compromising quality.

Not everyone wants the biggest, longest, most expensive or most complex version of what you can offer.

Is a Rolls Royce better than a bicycle? It depends on what the customer actually wants.
Is a bicycle a poor-quality Rolls Royce? No, it's a different product and can be even 'higher quality' in many ways.

By understanding customers' perspectives on quality, the most successful creative businesses use their creative talents to produce goods and services which fit customers' definitions of quality as well as staying true to their own sense of artistic integrity.

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Update: See article in Wired magazine August 2009 'The Good Enough Revolution: When Cheap and Simple Is Just Fine'

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Read also what Edgar Degas and Umberto Eco say about the customer's view of Quality.

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Film funding through eBay...

Financing a feature film can be a complex and expensive business, and most talented film directors never get a chance to make a full-length feature film because of lack of finance.

But with her 'can-do' attitude, resourcefulness and determination, Fiona Maher has made a film on a micro-budget, raising cash from a variety of sources, calling in favours and getting in-kind support from suppliers and a wide range of talented people in her network.

One of the creative ways she raised funds was by selling roles in the film on eBay to people wanting to take part in the film project.
(See also Crowd Financing to Fund a Film.)

'The Tree of Death' is a comedy feature, described as 'Blair Witch meets Spinal Tap'
The film will be released later in 2008.
In the mean time, here's a teaser from YouTube...

CCTV = PR

Manchester band The Get Out Clause used CCTV as PR - and then were publicised on Sky News!

With the help of public relations expert Liam Walsh of AskMe PR, the band performed under Closed Circuit TV cameras in various places around Manchester - then demanded the footage from the CCTV operators under the Freedom of Information Act.

They then used the footage to make their promotional video!

This 'guerrilla marketing' stunt resulted in the band's video being featured on Sky News. Watch video here.

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Cate Blanchett 'Sparkles'

Congratulations to one of my client creative businesses, Sparkle Media on their successful projects in Australia !

The visual effects and animation company has recently worked in Australia with Oscar-winning actress Cate Blanchett and Joseph Fiennes, producing video footage for the multimedia theatrical performance Minutes of a Separation.

Sparkle Media also worked for Reebok whilst in Australia on an 'advanced fitness' website project.

It's a pleasure to work with creative entrepreneurs like Glenn Maguire and Andy Cooper, who are the company's directors.
Over the several months I have been involved in their business growth, I have been able to advise them on matters such marketing, intellectual property and enterprise development.

Sparke Director Glenn Maguire said:
"Since attending David's workshop and then engaging him as an adviser, Sparkle Media has gone from strength to strength. The company now operates on a global level, going head to head with world wide agencies - and beating them. We've never looked back and have a lot to thank David for."

Working internationally from their base in Liverpool, Sparkle has worked closely with creative industries support agency Merseyside ACME.

Creative Times: Leading Creative People - it's like herding cats!

Leading Creative People ...
                                       ...."We say it's like herding cats!" was a comment about leading and managing creative people when I was a guest speaker at the Munich meeting of MAGNET - the Marketing and Advertising Global Network.

My presentation to the owners of advertising agencies from around the world was on the subject of Leadership. One aspect they were particularly interested in was how to lead 'creative' staff.

Link to full article: Leading Creative People 

Creative Times is now online ! 
Link: www.creativetimes.co.uk

The Price of a Bed

Would you pay 50,620 Euros for a bed?
(That's over £40,000 GBP, about $78,000 USD)

Probably not. But apparently some people do. Why? What's going on here?

I'm fascinated by pricing strategies and run workshops for creative businesses on the subject.
There are different ways to decide on your pricing strategy and I'll be writing more about them soon.
Certainly, customers are often buying more than the just the bare object - they are buying into something much bigger.
See What are you selling, really?

In the case of a Hastens bed, you are invited to buy into the story of a small family firm in Sweden.

The advert asks "Who would spend 50,620 Euros on a bed?"
It continues "Most people would not or could not. A select few could and would..."

Are you one of the select few?

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I'm interested to hear from you about pricing strategies - especially about businesses in the creative industries.

Carnaby Street W1

Westminster Council bought the copyright in the design of its iconic street signs (pictured).
This means that it can now generate income fom licensing this intellectual property to businesses.

The designs were created by Misha Black in 1967 and the copyright remained with the designer until his death, when it passed to his estate. Black's son then sold the copyright to Westminster Council in London for £50,000 GBP (100,000 USD).

The Council plans to charge licence fees to more than 100 companies that use the design on popular tourist souvenirs and other products.

Designers should follow Misha Black's example by retaining copyright when creating designs for clients, to make a profitable sale later - or to generate licensing income themselves.

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Photo credit: DearCatastropheWaitress.

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See related blogposts:
Protecting - and profiting from - your IP 
Whose photos are on your website? 
Let's follow George Lucas 

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