Unbuilt Kit Mania

[Brian Wood]

Brian Carling wrote:

> On 11 Feb 2001, at 7:22, Jack Crenshaw wrote:
>
> > Sounds like someone could start a business just selling kits again.
>
> They did a couple of years ago. Carl Gelormini, WB1EYE started a company
called
> Vintage Radio Kit Company. He sold tube transmitter kits, receiver kits
and even a
> tube QSK transceiver kit...Hams did not support it, so he went out of
business.

Can you say "no marketing"? I doubt if it went out of business solely
because hams didn't support it. Making radio kits with tubes is a niche
within a niche within a niche! You better have a great business plan to make
that work. And a fair amount of marketing money. I have now run two sideline
businesses while working full time at HP (now Agilent) and have discovered a
few things:

1. Marketing/selling costs a lot and is hard work. Most technical types do a
great job on the product and forget about the marketing. You can have the
right product at the right time, but if no one knows about it, it won't
sell. My division, which makes test systems, once hosted a "thought leader
panel", consisting of experts from various industries. One guy said "You
make great stuff. Go tell someone." (I liked that guy - he said that
McDonald's' marketing plan was essentially "to provide our customers a
reliable hamburger experience." -- Not the best, not the cheapest, just the
most reliable and consistent.)

2. It is extremely hard to find partners who share your enthusiasm. And you
better have partners. If you try to do it all yourself, you WILL fail.

3. Five things are essential in business partners: They must have 1) time,
2) ability, 3) money, 4) desire, and 5) the ability to get along with you
and others. Good luck finding people with all five. Even if you have venture
capital, your partners must be willing to spend some of their money to help
the business.

4. You have to have a supply of money that will last while you figure out
how to run a business. How many people in your town have put their life
savings into a local business, opened the doors, and assumed that if they
made good stuff, people would come, then went out of business within the
first year? It can take years to get a business off the ground. That takes a
lot of money. Most people delude themselves into thinking that they have
enough, whether it's a local restaurant or a national mfg company.

5. Don't be fooled by percentages. "It's a $100M market. If I just get 1% of
it, I'll be rich!" True, but if you get 0% of it, you'll be poor. Or if you
get 1%, but it costs you 1.1% to run it, you'll be poor.

Just to justify using the bandwidth here, I'll relate this to Heathkit. They
had a lot of the above in the early days. They also benefitted, as did most
electronics companies, from a relatively slow moving market. Look at it
today! You turn around and someone's on your heels. It's very hard to
compete today without a ton of capital.

Despite what I've said here, I believe that kits will make a successful
comeback, a la Heathkit.

Brian Wood, W0DZ

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