This article first appeared in the St. Louis Beacon, Dec. 27, 2012 - Mark Harris and Dana Askew-Harris had an idea for a simple gadget that they would call “the easiest way to hold an iPad or tablet since . . . HANDS!” Ten months later, they have an inventory of several thousand that they’re selling at a kiosk at the Galleria. And they’re talking about seeking the necessary capital and distribution agreements to take their product nationwide.
If they do, they will share the credit for their local-inventors-make-good story with several businesses in the St. Louis area, and they plan to keep the manufacturing here.
The gadget, the iSucker, is a suction cup inside a ball that attaches to the back of an iPad or other smooth-back tablet with a lever. It becomes a handle that can be held with one hand or a stand to prop the iPad on a table at an angle. It’s made of brightly colored plastic and comes in a package printed to look a little like the silver-colored back of an iPad.
They’ve sold about a hundred online and about a hundred more in a couple weeks of kiosk marketing. But that’s just market research, in preparation for the Consumer Electronics Association trade show in Las Vegas next month where they’ve booked a booth.
Following a dream
In his previous sales jobs at McDonnell-Douglas Corp., Essex Cryogenics, and TBI Corp., Harris had “been responsible for close to 500 trade shows,” he said. So he managed to get a booth in the entrepreneurs’ section of the world’s largest consumer-electronics trade show, where big companies like Microsoft unveil their latest products.
When Harris parted company with TBI in January, Askew-Harris pushed her husband to follow his dream.
Harris, 48, said he “always wanted to be responsible for a product from beginning to end,” from invention to design to manufacturing to marketing. “It took me until now to figure out how to do it.”
Askew-Harris, 44, is the primary financial backer in the operation so far, using proceeds from her late husband’s auto touch-up business. She had been the bookkeeper for that business and took over the whole operation when he died suddenly at the age of 35 in 2003. She sold the business, Midwest Touch-Up Plus, in 2006 and got a job as a computer technician with Triad High School in Troy, Il., near where she lives. She and Harris met in 2009 and married in 2010. She quit the school tech job last year.
So while both had business experience and were comfortable with technology, they had a lot to learn about manufacturing and entrepreneurship.
“You think you’re organized, and you look back, and realize oh my gosh,” Askew-Harris said. “It’s like one of those Russian nesting dolls: You think you’ve solved one problem and then you open it up and there’s another problem inside and another inside that.”
The iSucker inventor entrepreneurs have gotten this far through local networking. Although they began with some national and international contacts that Harris had from his previous career, they found a manufacturer, packaging company, printer, logo designer and patent attorney -- all in the St. Louis area.
Harris said, “One thing I’ve learned in this process: Everything is local in the beginning. You have to learn how to control in the smaller realm before you start managing in the larger realm. So everything is local at this point.”
They looked offshore, he said. Before they found a local manufacturer, they contacted a firm in India about making a computer-aided design (CAD), but “they had their own thoughts; it wasn’t our vision,” he said. “We could’ve had it all done in China, but we didn’t know what we were getting.”
They were uncomfortable about sending drawings or designs out of the country. Before they started looking for a manufacturer, they began the patent process with Thompson Coburn, a law firm in St. Louis. Defending a U.S. patent is difficult enough, Harris said. Going overseas is even riskier while your patent is pending, as theirs is.
None of the large manufacturers would work with them, he said. One of the contacts suggested he look for local companies that would consider making small amounts of his product.
Local, local, local
Their biggest stroke of luck, the couple said, was finding Specialty Plastics Inc., an injection molding company in St. Peters. The company went far beyond quoting prices for a small lot of plastic parts. Company employees offered CAD expertise, tested materials and helped design the parts of the gadget for manufacturing efficiency and cost-effectiveness.
“I looked in the phone book and found Specialty Plastics' website,” Harris said. “They said they would work with small runs.” Their first contact, Tom Rowe, sales manager at Specialty Plastics, became their mentor, Harris said. “We understood we needed tooling, but we didn’t understand injection molding. It’s far more intense than I thought.”
Rowe says that kind of mentor relationship is part of Specialty Plastics’ business. “We’re there for anybody who’s got an idea. We’ve worked with many people whose product never got off the ground. What made the difference was that Dana and Mark were receptive to any ideas we had.”
Askew-Harris agreed. “They tweaked it, and we’d say we didn’t like this, we wanted that. They’d come back with something else. We did it by trial and error -- and error and error.”
Rowe said, “We told them the up-front costs to build molds. They needed four molds, and they’re not cheap. You’ve gotta have the dollars to do what they did. There’s a lot of people with good ideas, but they don’t have the money to do what it takes.”
Small is beautiful
Mike Couviom started Specialty Plastics 32 years ago. After working for people in the industry, he said, he “saw a niche that most people at that time didn’t want to address. The stuff nobody else wanted -- the short run, exotic material, the clean room type stuff. Everyone else wanted high volume, where you put it in and let it run forever.”
Couvium saw more profit in small lots. “So we created a market. Somebody wants a thousand pieces of something, most manufacturers won’t talk to you. They want to run a million parts -- everybody wants that kind of business. But the margins are skimpy. When you make a thousand, five thousand of something, there’s more margin.”
Couviom declined to put a dollar figure on his company’s annual revenue or profit. Instead, he said the company runs 21 machines -- which cost about $150,000 each without accessories -- in a 14,000-square-foot factory, and employs 45 people running 24-hour shifts five days a week. The company makes products or parts for the automotive, medical instrument, home appliance, sporting goods and landscaping industries.
Despite the up-and-down economy, especially for consumer products, Specialty Plastics has been growing since 2008, Couviom said. Some of that growth came from absorbing the customers of other small molders going out of business.
That’s where customer service enters the picture. “Because you take care of the little guy, you get loyalty,” Couviom said. “You take a lot of small guys and you grow as they grow. We’ve had customers grow. We haven’t had anyone outgrow us. We’ve grown as their needs have grown.”
Clifford Holekamp, an entrepreneurship professor at Washington University’s Olin School of Business, says starting local “makes a lot of sense” for entrepreneurs developing new products. “They do prototyping and small batching,” he said. “They get more counsel, more help from the manufacturer. It’s more of a consultative relationship. That’s what domestic manufacturers offer.”
But domestic manufacturing presents a problem with balancing cost, Holekamp said. “What often happens, once they get to a larger scale, they switch to foreign manufacturers who will come with the cheapest price. To get any kind of manufacturing efficiency, you need to be doing [runs of]10,000 units. The injection molding business is a total commodity process. It can be manufactured overseas so much cheaper.”
Harris feels comfortable with iSucker’s price of $24.95. He said he has priced other accessories for computers, cell phones, smart phones and tablets and "the majority of products are selling for $35, $40 or $45. I figure for that market, if I could keep it under $25, it would be a real niche.”
Askew-Harris estimates she has spent about $100,000 on start-up costs so far. Harris says he estimates they would need to sell 25,000 to 50,000 of the gadgets to break even, depending on the method of distribution.
“I have 30 spreadsheets with all kinds of models and costs,” he said. “I can tell you what everything costs right now to the third decimal place in pennies. I’ve modeled this in quantities of 500 to 50,000, on how quickly we can pay off our investment if sold in different ways.”
The kiosk strategy
Having the company’s two principals staff a kiosk 12 hours a day, seven days a week is not one of the distribution plans.
“Gosh no,” Harris said. “It’s backbreaking work. But as owners standing in this kiosk, we might run into someone interested in our business, someone you wouldn’t ever meet if you were sitting at your house, waiting for an order.”
The kiosk marketing is “just to get the product into people’s hands,” Askew-Harris said. “It’s hard to get it to sell online. Here, it’s out for the public to buy. We want to have a track record to be able to answer the question if investors want to know, how have your sales been?”
Although they live in St. Jacob, Ill., 35 miles northeast of St. Louis, they chose a kiosk in the Galleria in Richmond Heights because of the Apple Store there. They got in late -- a week after the start of holiday shopping -- at one of the mall’s last booths, on the same level as the Apple Store but dozens of storefronts away.
Some Apple sales staff have been their most enthusiastic lookers, Harris said. “One of the clerks said people are always asking for something like that.”
Harris also took a sample into the Brookstone store at the mall, where “the guy was interested and said he would talk to someone in corporate.”
The couple are planning to enter the Arch Grants business plan competition, which they learned about from Holekamp. The competition is sponsored by several St. Louis headquarter corporations and by the Downtown Community Improvement District. Last year, the organization gave 15 grants of $50,000 each to promising start-up companies that agreed to locate (or remain) downtown. This year, the group plans to give 20 such grants. The deadline is Dec. 31; the grants are awarded in April.
The headquarter requirement does not include manufacturing in the St. Louis area, but Harris is pretty certain he wants to remain with Specialty Plastics and his other local suppliers.
“I know the general consensus is to go overseas for million-batch runs,” Harris said. “But my goal is to be loyal to the people who got me here as long as possible, so that they are as profitable as I am.”
Holekamp said such a commitment to local manufacturing “puts you in a difficult expense position. . . . If you have no competition, if people loved the product, you could just charge more, or make less -- if your passion was to keep the manufacturing local.”
Harris said, “I’m all for profit, but I also know success isn’t defined purely by the balance sheet. I mean how many new cars can you buy? Success for me is defined differently than it was 20 years ago.”
Rowe, of Specialty Plastics, praises the couple’s business sense. “They knew what they were getting into. I hope they sell millions of them. If they do, we’ll make millions of them.”