Recipe for success: smart partnering can transform a lone inventor into a market force
PRODUCT DESCRIPTION: Karyo’s company produces a line of silicone bakeware cooking tools with superior heat transfer and nonstick properties. The odor-resistant products, priced from $15 to $25 apiece, let users bake more efficiently, thanks to such features as even cooling and heat distribution. Silicone products had been used in commercial kitchens previously, but Karyo was the first to create a consumer line.
. FIND A VOID IN THE MARKET. “I was working as a consultant to develop a kitchenware [line] for a company that primarily sold silicone products to the medical industry,” says Karyo of how he uncovered this market opportunity. “I found that, while several European companies were selling silicone products to the commercial market, no one had a true consumer product. I felt that consumers and home bakers could benefit from silicone technology. I verified [this] with buyers for kitchen stores.” But by that time, the company he consulted for had changed its mind about entering the market, so Karyo went out on his own to develop a silicone line. The typical drawback to filling a market void is that you have to create a market for your product. Fortunately, Karyo didn’t have to deal with this obstacle–the existing popularity of silicone in commercial kitchen markets convinced buyers to give Karyo’s products a try.
2. DETERMINE HOW TO STAY IN A LEADING MARKKET POSITION. Karyo knew that being first to market wouldn’t be enough for him to remain a market leader. “I felt from the beginning that the key to staying on top in the market was to have ‘better than them’ product quality, unique designs and moderate prices that would give us a competitive advantage over much bigger housewares companies,” he says. So Karyo expanded his vision to include features that would differentiate his product from competitors: “The surface of SiliconeZone products is high gloss, not matte, and the product comes in vibrant colors that competitors can’t duplicate.”
3. IF NECESSARY, FIND A PARTNER. Karyo is a sales and marketing person–not a manufacturer. The high quality he was after called for manufacturing expertise and a willingness to help develop the product. Karyo knew he couldn’t afford to pay someone for development, nor could he afford to buy from a factory as a customer and keep prices down. “I knew I needed a partner company experienced in silicone,” says Karyo. “I talked to my father, Maurice, who had done business in the Far East for 40 years. He [found] a company in Hong Kong that made silicone products for the electronics industry. We formed a 50/50 joint venture with the owners, Ken and Ricky Yeung, where [they paid] development and tooling costs, while I paid for sales and marketing. Then we split the profits.” If you don’t have a connection to find a source you need, go online or to your local library to check out the Thomas Register of American Manufacturers, which lists manufacturers you can talk to about potentially setting up a partnership.
4. SELL THE MARKET ON WHY YOUR PRODUCTS IS THE CLEAR CHOICE. With some products, customers can tell right away which product is best based on visual clues, such as fit and finish, expensive materials or packaging. But in Karyo’s case, buyers didn’t understand that his product was of higher quality. So Karyo gave them a straightforward pitch: “I showed buyers the factors that determined a quality product.” He pushed three main differentiating factors: the high quality of his proprietary silicone formula, a denser and heavier product that provides better heat conductivity; the high-gloss finish, which calls for a slower production process and hand-polished tooling; and the vibrancy of the color, which results from using high-quality silicone material and pigments.
5. STRENGTHEN YOUR BRAND. Karyo ran an ad campaign to get the word out about his business. “We didn’t have any sales, but I wanted buyers of independent stores and major retailers to know and remember that we were the first ones in the market,” he says. “I took out ads in key trade magazines like HFN (Home Furnishing News), Home World Business and Kitchenware News.” He says people still remark to him at shows, “I remember you being the first in the market
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