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Why Start BusinessWhy Start Business? Necessity is the mother of invention The current rage right now with “pre-teen” girls is something called the “American Girl Doll”. These dolls are so life-like that girls everywhere must have one, even though they’re extremely expensive. There is a store on Michigan Avenue in Chicago where it costs $250 PER PERSON to have LUNCH and see all the new stuff for the dolls. But the story of the creation of the American Girl Doll is quintessentially American. Pleasant Rowland was looking for a Christmas gift for her niece in 1983 and didn’t like anything that was available. She wanted something for pre-teen girls that showed them the adventures life had for them and was geared for their age group. Pleasant, from that frustrating shopping experience, created the “American Girl Doll” and a small company in Madison, Wisconsin called the Pleasant Company. She focused on one small idea and spent time defining her product (VERY WELL), exploiting the catalog market and ended up selling her very successful company to Mattel for many millions of dollars. That was her motivation for why start business.
Growing her company was based on doing four things well: Strong Mission: She had a clear mission of providing QUALITY, INOVATIVE products for pre-teen girls that would improve their self esteem and give them a positive outlook on growing up.
Meticulous Product Definition: The definition of the dolls is so detailed that most people would NEVER spend that kind of time and energy on product definition and most people would miss the market because of it. Everyone should study what Pleasant did and use that as their model for product definition. That alone would significantly increase the overall success rate of new small businesses.
Pricing: No one would have priced the products as high as Pleasant did because everyone thinks they need to sell their products at Wal-Mart. American Girl Dolls are VERY expensive and targeted at guilty mothers who work MEGA hours and want to compensate for not spending more time with their daughters. That pricing strategy is the hidden brilliance of the product. Without that pricing strategy the product would never have survived and thrived as it has. When you look at the product you think it’s defined for the girls but REALLY it’s defined for the mothers of these girls. Genius!
Distribution: Technology was exploding in the mid-1980s and Pleasant took advantage of the newly booming catalog industry, (her company is located near to Lands-End) and very cost effectively launched a successful premium catalog to market her products. This was the ONLY way you could get her dolls. There weren’t available anywhere else. WOW, that takes guts! Imagine how many companies knocked on her door and offered to distribute her dolls, but she ALWAYS said no! So as you plan your company and begin the process of defining your product, think about the Pleasant Company and you learn a lot of very useful ideas that you should strongly consider in your new business.
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