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Secret Identitee Merchandising
Los Angeles. Nature of start-up: creating and marketing promotional items for movies, TV, and the music industry. Founded: 1984. Estimated 1991 revenues: $3.6 million. Employees: 15.
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"I had to give credit: No credit, no business. There were so many vendors like me that wanted in that customers made me wait. for three years I negotiated continually: 'We'll send a check Friday.' 'I'll call you next Monday.' 'Send us a letter.' Once I had to drop an account; they insisted on paying at 120 days, but we couldn't hold off our vendors that long." -- Marc Sirkin
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From his position as a TV-show production manager, Marc Sirkin observed Hollywood's huge appetite for gimmickry. In 1985, at age 25, Sirkin and an associate set up a promotional-products business to feed clever notions to the Tinseltown beast. They would create ideas -- submarine pens to pitch the movie The Hunt for Red October, foam rocks for the song "Like a Rock," T-shirts for "The Simpsons" -- sell their concepts to promotion-minded customers, and coordinate the manufacture and delivery of the finished goods.
At first they labored out of an apartment bedroom. "Eight people would show up at 7 in the morning," Sirkin says, "and by 8, UPS and Federal Express were already ringing the bell." In an elbow-to-elbow setting like that, hiring is difficult. "Credibility is the crux," Sirkin notes. "A prospective employee would come to this tiny apartment, and I'd have to tell him, 'That corner is where you'll be working. If you use the bathroom, everyone will hear you. Your benefits are that you have a plant next to your desk."
In 1986 two do-or-die selling trips to Manhattan led to the company's biggest order yet -- 25,000 jackets at $22 each to promote Arnold Schwarzenegger's role in Raw Deal. The $550,000 commitment was enough to buy the fabric, move into legitimate commercial space in West Hollywood, and hire 45 garment workers to fill it. No sooner did Sirkin do so, however, than the order was canceled. He reminded the buyer that the buyer's good name was etched in solid show-biz faith on the purchase order. Secret Identitee wound up getting a recommitment for 15,000 pieces. "That," says Sirkin with a sigh, "was the closest we came to losing everything."
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LaMarca Group Inc.
New York City. Nature of start-up: buying media advertising space. Founded: 1974. Estimated 1991 revenues: $73 million. Employees: 35.
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"Big corporations do not like the idea of putting someone into business. They want to deal with companies that look solid and are going to be around. Working out of the basement of your house doesn't fit their image." -- Jim La Marca
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How do you react when you see a way to do something better than your employer is doing it? (1) Drop a note in a suggestion box, or (2) leave and start a business that does it your way.
While a media buyer at an established advertising agency in 1975, Jim La Marca opted for choice two. "I had looked on the buying of advertising media as a craft. At the agency, I wasn't allowed to apply the craft properly," he complains. "I was a stepchild, while creative services got all the attention."
Yet for many consumer-product companies, media was a significant budget item, sometimes as much as 30% of gross sales. Indeed, for one client, Richardson-Vicks, the largest vendor cost in manufacturing and marketing its products was for airtime from CBS. The solution? La Marca persuaded Richardson-Vicks (itself a bootstrapped enterprise, started in 1890, when its founder, Lunsford Richardson, concocted a balm called Vicks Magic Croup and Pneumonia Salve, later renamed Vicks VapoRub) to help him start his own business, by promising to save the company some meaningful money if he did.
The client spun off one of its products, Lavoris mouthwash, for a test. The ad agency already had specified what the campaign was going to cost: $700,000. The difference therefore would be documentable; on his own, La Marca promised, he could bring it in at considerably less, or Richardson-Vicks could give Lavoris back to the agency.
The client said to give it a shot. With that, La Marca went out and bought a set of tools of the trade -- a calculator and a telephone -- brought the campaign in at $500,000, and charged Richardson-Vicks a fee based on the savings. "With comparatively little work," La Marca admits, "I took a negligible investment and parlayed it into a base to start a business."
To expand he needed support staff, computerized controls, a waiting area -- in sum, identity. So La Marca struck a deal with another, more affluent firm: give me a desk and make me look as if I belong, and I'll give you a share of the profits as my business grows. "With that association," he says, "I created instant credibility." He now has his own floor-through in Manhattan.
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Alpha Products And Bulldog Movers
Atlanta. Nature of start-up: manufacturing plastic visors; transporting household furniture. Founded: 1982. Estimated 1991 revenues: $20 million. Employees: 250.
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"There were a lot of vultures who wanted to take us over when the chips were down. We didn't let them. It was physically and mentally hard fighting back from adversity, but you can't give in." -- Jim Scott
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At age 20, sitting in a college classroom in Georgia, Jim Scott leaned over to the guy next to him and whispered, "Rich, do you understand any of this stuff?" His friend said no. "Neither do I. Let's get out of here and do something constructive."
The two chums quit school and decided to construct strapless sun visors. They drove down to Florida to do some market research, on which they spent what little money they had. "T
