My older son and I enjoy exchanging get-rich-quick scheme ideas as we each drive home from work – me down Route 1 to Trenton and him up Route 495 to Duluth, Georgia (yes, also home to the Runaway Bride). Our plans often center around brainstorms involving can’t-miss products – maybe a fish whistle novelty one day and a musical clock to time children’s hand washing the next. After enjoying some initial euphoria – we’ll be rich! rich! – we move pretty quickly to specifics. Do you know anyone who could put together a prototype? I might ask. How can we find out if there is already something like it on the
market? he might inquire. By the time we approach our respective front doors the ideas tend to look a little more difficult to implement than we had thought just 30 minutes earlier.
If only we knew!
Lynn Tumulty, West Trenton resident, retired ETS marketing director, and owner of Kitty Concepts, also had a product brainstorm. But rather than hatch and dismiss it in 30 minutes, she has spent the past three years of her life working at making her product, the Purramid cat house, into a profitable business. Along the way she has earned an MBA-equivalent business education, gone a long way down a number of dead-end roads, suffered some setbacks, had some success, and rejoiced in the generosity with which knowledgeable friends have helped her out with everything from patent searches to distribution.
Tumulty earned a BFA from Cooper Union in 1967, and recalls that Andy Warhol was working just down the street and Thelonius Monk was playing clubs in the neighborhood. Her rigorous education in the tuition-free, uber-selective institution, where, she recalls, only 13 of the 100 students in her major made it to graduation, taught her a great deal about design, and her early work experiences taught her about marketing – two key skills in getting her product to market.
After graduating she worked for the New Jersey Department of Education as a graphic designer, public information officer, and PR professional. She then earned a master’s degree in journalism from Temple. Returning to work for the state, she took on the project of trying to turn around the Department of Motor Vehicles. Then it was on to ETS, a company she had long admired. She spent 12 years there before a buy-out came along in 2001.
"I had had the idea about the Purramid," she says, "so I thought ‘what the hell.’"
The genesis of her big idea came from two sources – her three cats and her current reading, an Egyptian mystery. She decided that a line of cat products linked to famous sites – the Pawthenon is still on the drawing board – would be a good idea. To make her idea a reality she took out a $70,000 home equity loan on her home with the encouragement of her husband, Judge John Tumulty, who has served as head of the Senate Judiciary Committee, and who is now a workers compensation judge in Trenton.
She believed in her product from the start, but also knew that "when you have millions, as ETS does, it’s one thing, but it’s different when you’re a small entrepreneur, and I couldn’t be smaller." She realized that she had "no business background, no real corporate experience, no production experience."
These are the steps she took, and the lessons she learned:
Refine the idea. Right from the start Tumulty knew that she wanted a pyramid-shaped cardboard cat house decorated with hieroglyphics and other Egypt-evoking symbols that could be put together easily without tools. Her target audience would be women between the ages of 25 and 80.
Her preliminary research had told her that spending on pets had risen to the billions and that 1/3 of that spending went to non-essentials such as toys and play structures. She was confident of a positive market response.
Find a manufacturer. As a first step, Tumulty scoured New Jersey, New York, Pennsylvania, and beyond "looking for a company that could take my conception and make something of it." In her first – very extensive – search, she came up empty. No manufacturer was willing to turn her concept into a prototype.
Prepare a prospectus. "A fellow I know does trade show booths," she says. "He told me that I don’t need a schematic. Instead I could do a prospectus and send it to cat product people." She would, in effect, sell her idea.
This concept was tremendously appealing. "It sounded easier," she says. "They would take the burden and the risk of developing the product."
Preparation of the prospectus was arduous – and expensive. She needed computer simulation graphics, a simple schematic, an overview of how the product would be used, ideas for additional products in the line, and company information. The cost of the prospectus was $8,000.
Research targets. After putting together the prospectus, Tumulty had to figure out to what companies it should go. "I researched everything about all of the companies," she says. She mailed the prospectus, together with individual cover letters, to pet food companies, hoping they would be interested in using the Purramid as a promotion, to ad agencies that handle pet product accounts, to catalog companies, and to any other entity that might be able to make money from her idea.
She got lots of responses. The good thing is that she learned a lot from them. The bad thing is that they were all turn-downs.
Perform market research if possible. "Lots of people said ‘great idea, but it’s not cost effective,’" says Tumulty. While she had been hoping on the Purramid’s potential as a giveaway, she quickly learned that pet food companies wanted to spend 10 cents, preferably less, on a giveway item. The Purramid would have to cost far more. Other respondents said "’we’re in pet food, not pet furniture.’" The catalog companies said "’we don’t buy ideas, we buy products.’"
Tumulty realized right away that had she done market research she would have been able to anticipate these responses. "But," she says, "that would have cost $20,000, and as a start-up I was underfunded as it was. Most start-ups are."
Hope for a little luck. Even after the responses to the prospectus had come in, Tumulty was not willing to give up. "I’m stubborn," she says, "and I believe in the idea."
She got a break when she learned that the vice president of International Paper had left and had been replaced by a new fellow, who, according to her substantial network of friends, might be receptive. Appointed executive vice president of industrial sales for the paper company’s Phoenix Display unit, based in Thorofare, he turned out "to be my savior," says Tumulty. "He made the dream a reality."
The Phoenix unit makes cardboard displays. It had never occurred to her that such a company would be a perfect match for her product, but as soon as the idea was proposed, she knew that that was the case. The Phoenix designers created a product out of one piece of cardboard constructed in such a way that it could be easily mailed. They did not charge for any of the prototypes.
Budget for the first run. "There are very big upfront costs for the first round of products," says Tumulty. At this stage there is design work, there are die cuts. There are also matters of color to be decided and tested. In the case of the Purramid, velco had to be put on by hand. "That initial run cost over $8,000 for 750 items," she says. "That’s $22 for each unit."
She learned that future runs would cost much less. A second run of 5,000 would come out to about $8 a unit. On subsequent runs the price would drop to $4 and then to $2.
Do price research. Thrilled to see her idea as a three-dimensional reality, Tumulty thought she was good to go, that her business could start in earnest. "I thought I could sell it for $24.95," she says. That would not be a huge profit, but it would be fine for starters.
"The average person spends $600 a year on a cat," she says. "I’m thinking, "kitty gyms go for $100, $24.95 is not too bad (for the Purramid cat house)." This idea was reinforced when the product got rave reviews in the pet industry press, where it was praised both for entertaining cats and for the ease with which it could be put together.
But just the same, consumers "did not want to spend $24.95 for a cardboard product," says Tumulty. And while direct to consumer sales at that price were not working out, bulk sales to retailers were going even worse.
Through selling the Purramid on eBay and on her website (www.purr-amid.com), she has determined that $14.99 is the item’s natural price point.
She has also tried to sell the item at cat shows, but has learned that a 10 by 10-foot table at a cat show can easily cost $500, and can go for $5,000 at a major event. Not able to afford a table, she does work with independent salespeople who take a table and sell products from many companies. She also has a salesperson who works entirely on a 5 percent commission.
Don’t forget the UPC code. Even if the Purramid could be priced to please Wal-Mart and Target those chains would not take it, and neither would any other chain. "I made one big mistake," she says. "I never got a bar code printed on it. Evidently that’s a requirement for them to even consider you.
She had figured that it would be easy enough to just affix the codes before selling them. While that may be so, it is a step that chain stores are completely unwilling to undertake. She also learned that it costs about $1,200 to obtain a UPC bar code for one product.
Nurture a network of friends. While Tumulty’s dream has been battered by the realities of 21st century business, her spirits have been enriched by a large circle of friends who have provided all manner of help. "My accountant never charged me a dime," she says. Her investment advisor called nearly every day with advice and encouragment. Friends in the legal profession helped with copyrights and contracts. A friend in the distribution business is warehousing her Purramids at just pennies above his cost. "I can’t imagine how someone without contacts would do it," she says.
Hope for a good economy. Tumulty’s network of sales reps is telling her that nothing is selling, or at least that no big ticket pet items are selling. Items costing a few dollars are moving, but consumers appear unwilling to spend a lot of money on one purchase right now. She shrugs at this news, saying, "I can’t do trend management. The economy is what it is."
Tumulty, having spent about $55,000 of the $70,000 she allotted to this business, is not ready to quit. But neither is she ready to spend a lot more. "I’m not going to take the next step without a committment from a big retailer, or an investment in the company," she says.
No matter what the future holds for the Purramid – and for the still unborn Pawthenon – Tumulty says that she would undertake the venture all over again. But she has this advice for anyone suddenly struck with a genius idea for a new product: "If you don’t believe in your vision, don’t do it. It’s 10 times worse than getting a doctorate."
Kitty Concepts LLC, Box 51, Titusville 08560. E-mail: firstname.lastname@example.org. Home page: www.purr-amid.com.