Back to the Futures

My first few posts this year will look a lot like those from January 2007: I am pondering possible futures again, but more urgently now. I need to choose a path, plan a route down that path, and start the journey within the next few months. This runs smack into one of my deepest character flaws: I avoid big decisions because I don’t like closing off options. Choosing one path necessarily abandons the others. It increases the danger of failing at the same time that it raises the stakes of success. I am comfortable with small, manageable, and low-risk endeavors. But business success entails risk. Entrepreneurs are high-stakes players. Like it or not, I have to confront that.

To move forward, let’s first go backwards. Last year, I laid out five possible futures: Curio City Offline (opening a store); Curio Metropolis Online (expanding the website); Tentacles of the Kraken (starting additional websites in parallel with Curio City); A Curious Hobby (getting a job and operating Curio City part-time); and Exile on Main Street (opening a store in a low-cost area).

Today I’m going to dismiss the three least likely options, and add one new, if unlikely, possibility.

Exile On Main Street – moving Curio City to the Berkshires (or some other lower-cost area) -- is not going to happen anytime soon. Although my wife and I would very much like to spend a substantial part of our summers there, we will never live in the Berkshires year-round. The Boston area does have its drawbacks – cost and traffic chief among them. The Berkshires have their drawbacks, too; basically, we would get bored during the winters and chafe at the isolation and inconveniences. Braintree is where we live, and it’s where Curio City shall remain for the foreseeable future. Reluctantly, I relinquish my fantasy of living on a country estate and owning a business in a small community out west. If I go the physical store route, maybe I can still expand out there someday...turn the reins of my Boston empire over to a manager, and run the Berkshires store myself.

A Curious Hobby – getting a conventional job and relegating Curio City to part-time – is a defeat that I don’t need to admit yet. Curio City was profitable in 2007. It’s still growing at a respectable clip, and should continue to do so unless the recession is worse than I anticipate. I still have startup money in the bank. I’ve learned enough over the past two and a half years that I’m starting to get good at this. If Curio City still shows little hope of supporting me a year from now, after my money is all spent, then I’ll have to resurrect this option. But for now, I choose to relinquish the comfort and safety (and utter boredom) of getting a normal job. I can’t see myself ever going back to a professional desk job again anyway; at most, I’d bag groceries part-time while continuing to pour my heart into Curio City. Minimum wage would be an enormous raise for me!

Tentacles of the Kraken – launching a constellation of parallel websites – is just a marketing ploy. I don’t have enough personal interest in any particular merchandise category to really engage myself, and I don’t see how fracturing my limited time and attention is going to help anything. It would be an organizational nightmare for very little potential gain, unless the tentacles reach into something completely outside of my retailing comfort zone – in which case I would have to learn a whole new business from scratch. No, I don’t see this happening until Kraken Enterprises is a much bigger company, capable of devoting managers to each new area. So I happily relinquish this idea.

That leaves Curio City Offline and Curio Metropolis Online for further discussion. Those were always the strongest contenders; focusing in on them is not exactly a big leap forward, but at least it’s a start. The interested reader would do well to read those links. I’ll be dredging them up and debating them in depth in coming weeks, but I won’t be rewriting them.

For the sake of discussion, I hereby create one more possibility: “Steady As She Goes”. It’s Curio Metropolis with one twist: What if, instead of injecting a lot of money and professional talent, I only need to keep getting incrementally better at what I’m already doing? I’m on a decent glide path right now. January’s sales to date are blowing LY right out of the water: On Jan. 7, I exceeded the total sales for all of January 2007, and as of today I’m just $277 shy of my plan for the whole month. Although business is slowing daily, yesterday was my first zero-sales shutout since the middle of November. The big open-to-buy deficit that I expected to persist through February is already half erased. If this pace continues – a huge IF, given that we’re only in the second week of the year -- I could double LY’s performance. Even though the dollars remain dismal, the percentages have got to get one’s attention.

To pay me an acceptable salary, my business has to grow by an order of magnitude (that’s ten times, for the arithmetically challenged). Even if I could indefinitely maintain the 25% annual growth that I ambitiously planned for 2008, it would take about 40 years to get to 1,000%. I don’t have 40 years.

However, if I could double my sales from year to year, it would take only four more years to reach my success level. It’s probably going to take that long for either of my other possible futures to pay off. So, as a thought experiment, let’s consider what would happen if I really did reach my success level without making any drastic changes or pouring more money into it.

Business is running at double LY’s pace without any marketing, advertising, or other promotion. If I got smart/lucky at marketing, I might be able to maintain or even increase this pace. Or it might skid to a halt as the recession blossoms...but I really can’t factor that.

Physically, I can handle this pace without even breaking a sweat for 10 months out of the year. The Christmas season is a different matter. During the weeks between last Halloween and Christmas, I was easily working 50-60 hours. Physically hauling the merchandise in and out of my cellar was challenging – remember, I’m 50 years old. Even if I only had to work 50% harder to do 100% more business, I’d still be facing 75-90-hour weeks for two months. I don’t have the stamina to maintain full efficiency under that kind of load. Something would suffer. If I’m spending all of my time shipping and receiving, how can I monitor my inventory and customer service? What if I get sick, or injure myself? Routine operations require me to work (at least a little bit) seven days a week for six months of the year, and two of those months are intense.

Then there’s storage and transportation. Even with most of the sales coming from high-volume, fast-turnaround Panther Vision caps, I ran out of room in my cramped portion of our cellar and had to stack boxes in the living room. During the peak weeks I was schlepping 15-20 boxes per day to the post office and UPS Store, and hauling a comparable volume of new merchandise back home. I can’t fit twice as many boxes in the Curio City delivery van (pictured below), so I’d be making twice as many trips instead, further straining my time.

The conclusion is same one that Curio Metropolis Online inevitably leads to: The two frenzied months out of the year will force me to move this business out of the house. Steady-As-She-Goes may not hit this hurdle as quickly or expensively as Curio Metropolis Online would, but it doesn’t get around it.

Since today’s post has already run longer than I like, I’ll leave further specifics for next week’s reevaluation of Curio Metropolis. The two paths are similar enough to be discussed in parallel.