Independents' Day

Want to start your own revolution? It's easy. Just bring together a group of strong-willed entrepreneurs and form an alliance. Your independence may depend on it.

Something curious happened recently when 27 advertising agencies were vying for the business of a prestigious car company. The Chrysler Group invited the agencies, most of them small shops, to compete for its "multicultural account." It was a big deal. The winner would mastermind the advertising campaign of Chrysler, Jeep, and Dodge cars and trucks to the "urban" marketplace. The company's request for proposal laid out the many requirements of the account. What if a small agency couldn't meet the RFP terms? Chrysler had three words of advice: Form an alliance.

"Seven alliances came back to us in two weeks," says Jeff Bell, Chrysler Group's vice-president of Jeep marketing. Last spring, when Chrysler announced the five semifinalists, all five were alliances. With names like "PASS Urban Powertrain," the alliances each consisted of two to four agencies. "We're not asking them to stop being individual agencies," Bell says. "But if you come together in an alliance, you don't need to open an office in Miami. It's already there."

The Chrysler competition illustrates why independent-business alliances are hot. What's striking is how adamantly Bell opposed hiring a large ad agency. He valued the creativity of the independent entrepreneurs. But he also wanted scale. Hey, customers want what they want.

Clearly, the changing face of customer needs (or make that demands) is driving more entrepreneurs to team up in groups of 5, 50, or 100 companies. It's a great hook when you can present your alliance as a single-source solution, especially in a tough economy.

Just ask soloist David Kowal. After toiling on his own for years as a public-relations professional, he recently gathered together 11 of his soloist friends. "We said if we could only harness all that talent into a single group, that would be great," he recalls. So he and another sole practitioner started a new company, called 3D-PR, an alliance of 12 soloists. Dan Cote, marketing director for nSight, a print and interactive communications company with some $10 million in sales, liked what he saw in 3D. "We were looking for veteran PR people we could afford, and they fit the bill perfectly," he says. With the alliance, Cote says, he's getting more bang for the buck. It looks as if Cote has something in common with Chrysler's Jeff Bell.

An alliance's mission is often simple: increase sales and profits. But many alliances also appeal to an entrepreneur's deep-rooted sense of identity. The people who start and join alliances believe unceasingly in the advantages of remaining independent and are willing to defend that unalienable "right." (See " Declaration of Independents," September 2001.)

But the best of the alliances are pushing the boundaries of what independent means in some very inventive ways. And by joining forces they're finding even more freedom -- truly the best of both worlds.

Wheeling and Dealing

The Alliance: YaYa Bike (www.yayabike.com)
Founded: May 2001
Members: 67 independent bike dealers
Driver: A consolidation of suppliers is creating a power imbalance in the industry

If you wander into @ The Hub Bicycles, in Athens, Ga., you'll have no trouble finding name bikes like Cannondale and Gary Fisher. But against the back wall you'll also find niche brands you've never heard of. It's that variety, says owner Chris Dupuis, that attracts both weekend riders and more serious cyclists who spend $1,500 and up on high-end road bikes.

If the top bike manufacturers had their way, however, @ The Hub wouldn't be nearly so eclectic -- or so profitable, says Dupuis, whose store had sales of $785,000 in 2001, its first year. And customers would have far fewer brands to choose from. The four "really powerful" suppliers to bike shops don't like store owners who pick and choose from their product lines, he adds. "They've got it down to a science: 'If you want our bikes, you need to take our clothes, helmets, and pumps.' Retailers jump through hoops to have the most desirable brand. But every decision has financial repercussions. I don't want any supplier to be 100% [of my business]."

As Dupuis, a 15-year veteran of the bike business, watched the big suppliers consolidating their power, he came to the conclusion that he needed to have more clout in the industry. So this year he did something radical -- he joined a new co-op alliance of independent bike dealers known as YaYa Bike. Four other Georgia bike dealers have also joined.

The expression ya-ya is baseball slang for home run. YaYa Bike has yet to hit a home run, but industry insiders say it has the potential to. "This could be really big," says Larry Carder, national sales and marketing manager for the Hawley Co., a distributor of bicycle parts and accessories in Lexington, S.C. In April, Hawley agreed to be a YaYa "preferred distributor." That means it will give YaYa members a rebate on its 12,000 products -- on top of whatever individual deals the store owners have with the distributor. What's in it for Hawley? New customers. "We've already seen an effect -- a dozen new stores in the Midwest and West," says Carder.

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