This is a cautionary tale about the danger of going to market with a product before you’re truly ready to handle the crush of consumer demand. It may sound like a dream come true in these tough economic times, but it was nearly too much for Ron Vigdor and his 70 employees.
It all began about four years ago when concern was growing about Bisphenol A, also known as BPA. The presence of this substance in plastics was creating concern among young parents who worried that their babies may be exposed to it. So Vigdor developed a line of products that were guaranteed not to contain any BPA.
The response was overwhelming.
“We saw a tremendous spike and upsurge in demand for our product,” says Vigdor, founder, president and CEO of BornFree Inc. “So much so, that we probably had to work 13 to 15 hours a day literally manufacturing the product and flying it internationally to the United States for next-day delivery.”
When you have a product that everybody wants, you have a choice to make: Spend what you need to in order to meet the demand or wait until you’re sure you’re ready to handle it. The problem, of course, is the demand may not be there anymore if you decide to wait.
“You have to do more or less a cost analysis of what it’s going to cost you versus what kind of market share or gain you’re going to receive,” Vigdor says. “We spent millions of dollars getting the product to the shelves.”
Vigdor was confident that revenue would make up for the costs incurred in the beginning.
“Our manufacturing capability was roughly 1/10 of our current manufacturing capability,” Vigdor says. “Everything was exponentially anywhere from two times to 10 times the demand or needs we originally envisioned in our business plan. At the end of the day, it was a smart decision. Financially, I don’t know if it was the smartest decision, because we had to spend so much money.”
The decision to try to meet the demand created a high level of stress for Vigdor and his employees for a period of about six to eight months.
“We had to make sure we could try to please as many retailers as possible,” Vigdor says. “And try to gain as much market share. When you don’t have enough supply and great demand, that’s probably the most amount of stress anyone could have trying to combat that.”
Vigdor was able to work through the stress and meet demand, but there were risks involved. And that’s the choice you have to make when faced with the same situation.
“Do you come out and release a product when you have 50 but demand is 250?” Vigdor says. “Or, I can manufacture 250, but the product is 95 percent great and not 100 percent great. Do you go to market with that? You should always go to market when your product is 110 percent. You always want to be on top of it, and you always want to make sure you have the best product available.”
Vigdor’s advice, despite his success, is to take the patient approach.
“Don’t come out to market before you’re ready,” Vigdor says. “You’ll just end up with egg on your face. If you’re not ready, it won’t do as well as you want. If you have a great product but your manufacturing is not able to ramp up to scale, you’re going to upset some customers because you can only deliver to a handful of customers.”
How to reach: BornFree Inc., (877) 999-2676 or www.newbornfree.com
Keep your cool
Ron Vigdor thought he deserved one deal and his buyer did not feel that way. At one of the most stressful times of Vigdor’s life, the result was not good.
“I exploded,” says Vigdor, founder, president and CEO at BornFree Inc. “I stuck my foot in my mouth. I said, ‘You’re only the stepping stool for me getting bigger and better.’ That did not go well with the buyer.”
You need to recognize those times when your patience is thin and you’re prone to losing your cool, says the leader of the 70-employee company.
“If you are in a position in which you believe you are going to be confrontational, even if you think the customer is wrong, the best thing to do is step away from the actual problem,” Vigdor says. “Give it some time and rethink it.”
If you do lose your temper in front of your people, use it as a lesson to show them that you’re not perfect either.
“Teaching humility shows all people that you are human other than just being a tough CEO who says it’s my way or the highway,” Vigdor says. “It allows you to have a more personable connection with your employees as well as your vendors and manufacturers.”