The Medium is the Message

Even at half the heft of the old stuff, lightweight concrete is an oxymoron. One reason Syndesis has remained largely a West Coast operation is that Syndecrete can't be poured on-site. It has to be precast in the Santa Monica factory and is heavy and costly to ship. Most of the company's revenues come from high-end residential sales. That was fine before the recession, but when the economy softened, so did the price of competing decorative materials such as natural stone.

Hertz's reaction was to lower his prices. The result: the old "volume" joke -- twice as many contracts, twice as many headaches, same dollar amount of sales. He had no formula for determining what it cost to produce his material and priced it based on the nearest comparable material. "I figured if granite is selling at $60 a square foot, I'll come in at $50, and that should do it." It didn't. Syndesis could make sales at that rate but not profits. When Hertz had to jack prices back up, he undertook a self-schooling campaign to learn business. The first subjects were job-costing and break-even analysis.

The misleading assumption was that Syndecrete costs next to nothing. The semiliquid brew it comes from contains such cheap ingredients as industrial throwaways and recycled postconsumer waste. A nearby screw manufacturer, for example, donates brass spiral-shaped shavings, which, Hertz marvels, "pick up the light beautifully." Nonetheless, Syndecrete remains labor-intensive to produce and tricky to bring to a smooth finish. Plus, its margins are low by the time it's installed. (Drop a section and you start all over.)

"I'm interested in developing some highly designed pieces and in producing them in mass quantities at an economical level," Hertz says. But the problem remains that Syndecrete doesn't readily lend itself to mass production. The company's tiny line of home decorations (vases, bowls, tabletops, soap holders) is sold directly to one catalog merchant -- instant cash flow, but barely profitable. Still, Hertz has taught himself enough about breaking even to have canceled production on a set of bowls when the pace of orders at a recent trade show suggested they wouldn't recapture fixed costs soon enough. "I never thought that way before," he admits. "In the early years, if I felt it was a beautiful object, I'd just make it."

Other studies at the Hertz School of Business include marketing and accounting, which the school's star pupil pledges he will have completed by the time this article appears. Until then, Hertz won't push for growth. "I haven't felt ready to go for aggressive sales forecasts," he says. "The last thing I want to do is sell a lot at a loss."

By now he's resigned to Syndecrete's relatively high price structure. Sold straight out of the factory, with no middleman markup, the product is still at a level where some 60% of potential clients for whom Syndesis generates proposals reply that they love the product but regret they can't afford it. If Syndesis can't manufacture competitively -- and it's doubtful it can, given set-in-concrete labor and materials costs that commodities such as granite and marble don't suffer -- Hertz knows he has to convince customers his stuff is worth the extra dough. That's where corporate design -- the business subject he's learned best -- comes in.

Hertz starts the process of communication by sending prospective clients an elaborate four-color brochure. "From the mailing label, to the way it's packaged, through the pieces of identity inside," he says, "customers can tell we're no uninitiated precaster, that we're a business architects and builders can relate to."

The recipient can request specific information by checking items off a list on the response card enclosed in the brochure. What arrives next is likely to be printed on cocoa-toned stock and wrapped in corrugated cardboard -- a curiously drab setting that risks being dismissed as the budgetary concession of a business short of funds. Hertz appreciates that his back-to-basics approach treads a fine line between sophistication and out-and-out cheapness. "Unless you do each element sensitively, so it's a recognizable part of the theme," he says, "it looks as if you're cutting corners."

In Syndesis's bootstrapped beginnings, standards were indeed tempered by economic necessity. "We bought rolls of that corrugated stuff," Hertz recalls of his early days, when he operated out of a garage, "because it was incredibly cheap, yet it made for interesting packaging." He still buys rolls of the stuff, he says, simply because "I rather like the aesthetic." A major difference: visual interest in the otherwise lackluster cardboard has been introduced by means of a cutaway, each one scooped out by hand, that reveals an address label.

The rough-finished binder that holds Syndecrete data also seems to be the mark of a tightfisted operation. Unbeknownst to the recipient, however, it costs about three times more than the usual vinyl-covered model. The extra cost is to get the manufacturer to interrupt its production run and not apply tacky plastic. "It costs more to get less," Hertz acknowledges -- meaning for raw goods, not cultivated effect.

Hertz has to be the only merchant in the world who delivers marketing matter on butcher paper, the same utilitarian stuff your rib roast is wrapped in. He considers butcher paper's suggestively stark ("Read this!") and grainy (like Syndecrete itself) veneer more suitable than conventional bond for presenting certain printed information. So much so that he doggedly shopped among grocery suppliers rather than printing-paper mills for a bulk supplier. "If I asked a mill for the effect I wanted," he says, "they'd have come up with some premium-priced designer paper speckled to look like granite. I got real speckles at a small fraction of the price."

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