Strategies Roundup 07/08
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The PlayHousing Market
There's no slump here: Barbara Butler's company thrives by donating its fanciful houses.
By Francine Kizner
Giving away up to $55,000 a year in merchandise has become a tradition for Barbara Butler Artist-Builder Inc. The 21-year-old high-end play structure company--which boasts celebrity clients like Will Smith and expects to bring in $2.3 million in 2008--makes charitable donations in lieu of having an advertising budget. "We get a lot of publicity, and we try to raise the most money possible," says Barbara Butler, 51, who owns the 16-person business with her husband, Jeffrey Beal, 52, and her sister, Suzanne, 58.
Since 1999, the San Francisco company has donated playhouses, play accessories and gift certificates to schools and charitable organizations that enhance children's lives, such as the Bay Area Discovery Museum. By choosing charities related to its mission, the company frequently brings in new customers who want custom playhouses or buyers looking for a better deal by purchasing direct rather than outbidding somebody.
"We'd rather spend money on donation programs than on advertising," says Barbara Butler of her innovative marketing method.
By Mark Henricks
Why do entrepreneurs sometimes resist changing strategies that have failed? Why would a Harvard MBA student pay $208 for a $20 bill? In Sway (Doubleday, $23.95), authors Ori Brafman and Rom Brafman shed light on these and other puzzling but common behaviors. Often, intrinsic forces make people go to absurd lengths to avoid perceived losses and resist modifying actions even when they're clearly not working. This fascinating book shows how you may unconsciously work against yourself and how to get yourself in line--such as by seeking outside perspectives to help overcome your built-in reluctance to drop a losing approach.
Blogs, wikis, forums, reviews and other social networking phenomena give consumers more information--and power. That makes some businesspeople feel threatened. But in Groundswell (Harvard Business School Press, $29.95), Forrester Research analysts Charlene Li and Josh Bernoff show entrepreneurs how to surf this rising swell to opportunity. Start by asking what customers are ready for, then define your objectives, see how those dovetail with strategy and pick the right technology. Then, paddle out.