Take a Cue From Marvel's 'Iron Man'

It's time to take your own production in-house and hold on to more of the profit.

By Steven D. Strauss May 14, 2008

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My brother emails a few weeks ago and says, "Mark your calendar for Friday, May 2. We are all headed to the movies that night! Can't wait - I'm so excited!"

So what was it that got him so animated? Was it Forgetting Sarah Marshall? (Great movie, big thumbs up, but no, that wasn't it.) Baby Mama? Guess again.

The flick in question that has my 54-year-old brother chomping at the bit and releasing his inner 12 year old is none other that Marvel Comics' Iron Man. The movie does look to be a lot of fun and so I was happy to oblige my big bro, for reasons cinematic and otherwise.

For me, the interesting thing about the movie is that it is Marvel's (MVL) first foray into solo movie producing. For years it has been licensing its superheroes to big studios and then acting as a simple co-producer. Sony (SNE) was the partner on the Spiderman series and Fox ran with X-Men.

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And then Marvel wised up (albeit not quite as fast as a speeding bullet).

Why license your fantastic product for a fraction of what you could make when you can instead take it in-house, become the studio yourself, cut out the middle man and keep all the profit?

$1 billion in gross sales (the Spiderman franchise) can be a very persuasive argument.

So what does this have to do with small business, you ask? Plenty.

Until recently, small businesses that created a product often found themselves in a position not unlike that of Marvel: They had to hire expensive third parties to create the product, and that really cut into margins.

For instance, about a decade ago I had an associate who wanted to create a new back support system. As it was too expensive to produce here, he traveled to China and found a manufacturer who then created and shipped his product to him.

That is so 20th century.

These days there are an incredible array of tools that allow us to create (or just buy) products better, cheaper and faster:

A dizzying selection of computer programs enable users to design products themselves, programs that were previously the sole domain of expensive engineers and designers. Simply search for CAD (computer assisted design) software.
Or, you can buy designs that have already been created. For instance, check out building blueprints. Who needs to hire an architect?
And between the Net, email, texting, Skype and video conferencing, there is almost no need for cumbersome, expensive fact-finding business trips.
Finally, and maybe even better -- there may not even be a need to manufacture that product. Google and its offspring have made it so that products that we never even knew were out there now can be found in a few short keystrokes. Why put all that effort into R&D when you might be able to buy something almost exactly the same -- for less?

The point is, there is no need for any small business to behave like Marvel pre-Iron Man. It is so easy these days to literally or figuratively take your own production in-house that it would be a shame not to.

If you are still doing business the old way -- physically instead of virtually -- then you are acting like an analog player in this digital world, or, more appropriately, like Clark Kent instead of Superman.

And now it's time to head to Iron Man!