Aaron Schwartz is Founder and CEO at Modify Industries, Inc., which creates custom, print-on-demand watches, t-shirts and cell phone cases. You can see it all at Modify Merch. He loves working on startup ideas and has spent innumerable (happy) hours advising friends and former students on how to grow their ideas.
From the beginning, Modify has been focused on high-touch customer service. We're of the mindset that if you're going to reach into your pocket to buy one of our custom watches, we really want to make sure you love it. To that end, more than a few thousand customers have received business cards with my cell phone number on it. If they ever had an issue -- or, sure, a pat on the back -- I wanted to hear from them.
Shortly before Christmas 2014, I received an email from a customer with the subject line, "Modify Copy." She alerted me that a big-box store had an exact copy of one of our best-selling designs. She attached a photo, and my worst fears -- the worst fears of any small business -- were confirmed; one of the "big guys" was knocking us off. At first I was kind of proud ("We made it!"), but then I actually processed how bad this was for our business.
We immediately scanned their website and, sure enough, they had multiple replicas. We needed to be sure, and bought the products: exact matches. We had to respond carefully -- you can't just run to the press and say that a big company is carrying your product. And I realized that the big-box store, one with tens of thousands of products, may not have acted with intentional malice. After some digging, we learned that the retailer had relied on a manufacturer and wholesaler of watches to stock their shelves. Now I was angry. We had worked hard to build Modify and this didn't seem just.
First, we made sure we had copyrights on the work from the U.S. Copyright Office; then, we emailed the manufacturer.
That was in February 2015. The big-box store eventually removed the products from their store and site, though after the holiday season, when more than 1,000 units were sold. While they may not have known about their supplier's activities, I believe that size is no excuse and that no business should allow itself to grow without investing in the foundation to know the origins of everything that they sell.
Having gone through this incredibly stressful experience -- and having spent a lot of time and money in the process, two things a startup cannot spare -- I decided to to use my time and effort to help other startups. Here are a few tips to protect yourself in case you find a copycat, and how you can turn this type of bad news into an opportunity for your team to coalesce:
Protect your work.
We've designed thousands of watches over the past five years. We were naive to think that others wouldn't copy it, and we were too broke in the beginning to have a strategy around copyrights. But as much as you can, make sure to document the creation of all of your IP - from your logo, to your designs, to your code. We created a rubric for when we should invest in trademarking. For us, that's any design that will sell more than $1,000 of product; of course, this is different for every business. And of course, we protect our brand name and any taglines we intend to use for more than a month.
Find a great law firm.
We are fortunate to have legal support from the Bend Law Group, a great startup and small business lawyer. The law is complex, and you need experts on your side. If someone infringes on your work, you're going to be angry. An incredible legal team can help you channel it in the right way.
Focus on the core of your business.
While the legal discussion is ongoing, I've focused 99 percent of my time on our current business and team. We're a startup and, as much as I'd like to fight what I perceive to be a gross injustice, Modify will lose if we're distracted from building our business. In this case, after commiserating with my team for a day, I kept them away from our legal dealings. They didn't need to be updated on every discussion I had with our lawyers. And more importantly, I carved out specific times with our lawyers and our Board to discuss this topic. Since the copying didn't pose an existential risk to our business, I never let it become my biggest priority.
This might sound trite, but without a fan of ours who lives across the country being outraged, we might not have found out for a while about this. We put a ton of effort into our customer experience and in some small way, I think that made our customer as outraged as we were. There are some incredible books on how to delight customers; I recommend Delivering Happiness by Tony Hsieh. As a startup, your early customers will be big advocates of yours, and you should instill this passion by letting them into the inner workings of your business.
Use the bad news as a rallying cry.
I don't think Modify had ever been as tight-knit as we became upon receiving our first purchase of these knockoffs. We huddled around my desk and were amazed to see a Modify Watch by some other name. The team was united. This is our product. We built this. Competition in any form is an incredible catalyst for you to come together. It's very easy to get lost in the day-to-day and forget why you're working. Having a common enemy led to a fresh discussion about all of our goals and our commitments. As a result, our team has become even more open -- and connected -- with our audience. We have more than enough proof to validate our investment in our community.
In the end, none of the above matters if you haven't built a great business. A competitor copying your product is a setback, but so is a supplier's delay, or a website bug, or just dumb luck of some snowstorm preventing shipments from arriving on time. And that's the attitude we have internally -- keep fighting every day to make Modify a great company. Maybe one day we'll be as big as that big-box company.