Spill the beans to a potential partner. Owades actually had one advantage: several years before, she had dealt with one grower who had supplied flowers briefly to Gardener's Eden. She talked to the grower, Peter Barr, on the phone about her idea, then drove out to Watsonville, Calif., to meet with him at his business, Sunbay Growers. After reading her business plan, he was intrigued enough to do some testing with her.
* * *
"We have an industry that's oversupplied with flowers," says Barr, "and I'm always looking for different ways to sell them." In February 1988 Owades and Barr dived into figuring out how to preserve flowers during shipping. They experimented with different sizes of boxes, various ways of securing the flowers, and an assortment of padding. They did test shipments to a dozen sites (family and friends) across the country. Barr wasn't charging for his time, although Owades was picking up the cost of materials. After a couple of weeks the basic concept of shipping bundles of flowers seemed feasible.
"My reaction to the idea, candidly, was that I was glad it was her money," says Barr. "The mailing lists, the computer systems -- I knew catalogs were expensive, but the size of the venture just to start and the amount of money she had to raise made it risky. I agreed with the concept from the beginning, but I was more leery when I saw the numbers she had to generate." Still, Barr agreed to be a partner if the company took shape.
With one grower in her pocket, Owades was ready for the next step: finding a shipper to work with her.
* * *
Evaluate other potential partners. "Instinctively, because of the reputation and stature it would give our business, I felt my shipper had to be Federal Express," says Owades, who had researched carriers the way she had investigated growers -- by reading articles at the library and annual reports. With help from Fran Wilson, who had begun working informally on the venture, Owades went through the motions of talking to other candidates. "Airborne, Emery, and a variety of others at the time were very eager to have the business and were very competitive on price but could not promise the lift capacity, the airplane space out of specific locations -- growers often are located out in farm country -- and a guarantee on a day-in, day-out basis to move product. We were guessing that some growers might eventually need to ship 5,000 boxes on a given day, and the other carriers just couldn't commit to it.
"Thinking about Federal Express was tough because it's so big," she continues. "Who was I? I was nothing. I didn't have a business, I had an idea." (She didn't even have a name: the company wouldn't be dubbed Calyx & Corolla until right before the catalogs were printed.) And she was asking for more than just an account number: she needed her partner to offer competitive prices, install a computerized package-tracking system at her office, and agree to such things as leaving flowers at a customer's door without a signature.
Figure out whom to contact first at potential partners. In approaching Federal Express, there was an obvious place for Owades to start: the company has district managers who handle different areas of the country; their job is to get new accounts and service them. That's where Owades began in February 1988.
Wend your way through the corporate structure. "Lynn Anderson, the district manager, was saying, 'Your idea is impossible -- but wait. Maybe if you call so-and-so in Memphis [the site of Fed Ex headquarters] . . . ' " explains Owades. "I'd call Memphis and ask people what their roles were, could they help me. I was respectful of busy people's time, so before the call, I made sure I could articulately say what the concept was and what I wanted from them. I'd write it out on paper.
"Every person I talked to gave me a little information. I'd ask, What are Fed Ex's goals with the catalog industry? Is the company currently in flowers? You don't always get answers, but you might. Very often it took half a dozen calls to get through to these people. I never expected them to call me back; they didn't know me."
* * *
"At the center of Ruth's effectiveness," says Stanford lecturer Grousbeck, "is that she can sit down across the table and get you to do almost anything."
Owades's persuasiveness served her well in plowing through the Federal Express maze. She was referred to a consultant named Jay Walker, who was searching out catalog business for Federal Express. He hooked her up with Fed Ex marketing chief Richard Metzler and with Mike Glenn, now senior vice-president of catalog services. "It helped that she'd done a lot of homework," says Glenn. "Plus, we had just begun an initiative to get more involved in catalogs." Nevertheless, between February and April of 1988 there were infinite phone conversations, faxes, and letters. Finally there came a definitive conference call involving Owades, the bigwigs in Memphis, and the local Fed Ex rep. Setting aside details of pricing, systems, and timing, Federal Express confirmed that it was on board to help make Owades's idea work.
* * *
Negotiate. The Federal Express negotiations were done without in-person visits. Owades agreed to take on legal liability for packages left without signatures, negotiated a volume-pricing schedule, and determined what size her company would need to reach within a year to keep everybody happy. Similar negotiations had to be made with the growers, who were being asked to prepare for unknown volumes of orders. "I can't say strongly enough that we were all figuring it out together," says Owades. "This wasn't something I rammed down their throats. I didn't know what the minimums would be, and neither did they. Everybody just knew that by the time the year ended, if we didn't reach certain volumes, no one would be very happy, most of all, us. It was a real experiment."
Impress potential investors. Owades put $150,000 of her own money into the company to show her commitment, and took a reduced salary. In addition, she went out on a limb: she sent potential investors flowers in boxes via Federal Express, the way they'd receive them if Calyx existed. It was a risk: if the flowers didn't arrive in good shape, she'd have blown her chances. The first business plans were sent out in May, and by June, 18 people had committed to the full $2 million Owades was seeking.
