Business Lessons from a $10,000 Bag


I’d like you to treat yourself over Easter. Take 16 minutes, somewhere comfortable, no interruptions, maybe a glass of wine – and watch two videos.

The first one is the making of an axe: the second another craftsman, this time making kitchen knives. Both of them are things of absolute beauty – and I was reminded of them last week when I read this story about a $10,000 bag.

No-one needs a $10,000 bag as hand luggage. A couple of weeks after Children in Need you might well argue that paying $10,000 for a bag is simply immoral.

Then again, there are plenty of people who’ll pay that much for a hand-made, everything-sourced-in-America, unique piece of luggage. Is making those bags a viable business model? Absolutely.

But I think it goes deeper than a simple argument about whether anyone should pay that much for a bag – or whether the Chicago entrepreneur behind the bags is going to make his fortune.

We live in a global economy. If I’m setting up a new business I can hop on to Fiverr and hire a web designer in India, a copywriter in the Philippines and an SEO expert in Russia. And yet if there’s one word that gives a client or a customer confidence, then increasingly I think that word is ‘local.’

As you might expect, over the course of my business career I’ve spent a few nights in hotels. Name a chain, I’ve stayed in it – quite possibly twenty or thirty times. Some of the experiences have been excellent: some really well-managed hotels that catered for everything the business traveller could want. So why do I now go out of my way to avoid hotel chains? It’s because I want a personal, local experience – and so do millions of other people. Just look at the success of a site like airbnb. I want to stay somewhere I can talk to the owner and where I know ‘all our food sourced locally’ doesn’t mean a weekly drive to the cash and carry.

Let me give you another example: supermarkets. About a year ago I watched the white foam ooze out of the bacon I was grilling and thought, ‘no more.’ Ever since, I’ve bought our meat from the local butcher – and it’s one of the best decisions I’ve made. Yes, it costs a little more, but I can look at the blackboard hanging up in the shop and see exactly where my meat is from and when it was slaughtered.

And yet the nation’s supermarkets insist on competing on price. Live better for less. Every little helps. Did they ever think that just once an ad saying, No, they’re not the cheapest. But they’re 100% pure beef might work? I refer you to McDonald’s vs. Shake Shack, ladies and gentlemen.

But ‘local’ and ‘handmade’ are all very well if you’re a B&B or a butcher – and I’m fairly certain that no members of TAB York have a sideline making axes or kitchen knives. So what do I mean – and how can you benefit – if you’re a PR company or an accountant or a corporate lawyer? There are three main points:

  • In an increasingly impersonal world personal is more important than ever. For me ‘local’ means personal. People still want to buy from people and, if possible, they’d like to talk to the boss at some point. As the old cliché goes, they don’t care how much you know until they know how much you care.
  • The beliefs and values of your company are increasingly crucial. What shines through with the axe, the knives and the $10,000 bag is the absolute passion of the people involved. It’s not a business, it’s a calling. So make sure that clients and customers know your company stands for something: make sure they know the story of why you believe.
  • Finally, don’t be afraid: if you’re providing a premium service or making a premium product, don’t be afraid to charge a premium price. It’s easy to think ‘the market in North Yorkshire won’t stand it.’ You’ll be surprised – and there’s a whole world beyond North Yorkshire that’s been waiting for you…

With that, I’m off to enjoy Easter. Make sure you do the same: have a brilliant weekend and the blog will be back on Friday 10th.

Advertisements

5 comments

  1. Leigh Foster · April 2, 2015

    As an occasional reader of the blog, I was intrigued to see why a film about making an axe would be so interesting for a group of Business people, and it got me thinking.
    While I entirely agree with Ed’s three summary points, I do think there is something more to be read into this.
    The film about making an axe is a beautifully crafted film and it looks so easy to make the product, all you need to do is light a fire and hit the steel with a big hammer until it moulds to the shape you want.
    As an engineering apprentice – many years ago, one of my first year ‘projects’ was to forge an Axe, so all the processes were relived for me. In those days there was a structured apprenticeship system – 5 year programme under the supervision of “The Engineering Industry Training Board” (EITB). The programmes were run in company by many organisations and provided both an academic and hands on experience (not to mention a work discipline) for people leaving school at the age of 16 with suitable GCE’s. It worked!
    You were prepared for the world of work by people who had been there and done it, not thought about it, but done it!
    The processes can be seen from the film and taught from a textbook – hardening tempering it’s all there, but not until you try to do it, does it make you realise that you actually need years and years of practise to achieve anything like the outcome depicted in the film.
    The big issue that I think our culture / age is challenged by, is the fact that these days those skills that were second nature to my youthful generation are being lost at an alarming rate. The attempts by successive governments to replace / enhance the apprentice system have largely failed the manufacturing sector, and while it’s good to have app programmers and web developers by the dozen wouldn’t be nice to have engineers who could build product and solutions like ships, power stations, or even an axe.
    So maybe it is a business issue and perhaps we do need to rethink about quality and product, but the real problem is that having thought it through can we source the resources that can deliver goods at a reasonable price or should we continue to rely on the import strategy of the last few decades and continue to develop our service sector?
    Now maybe I am being a little disingenuous about the support infrastructure and clearly it is more complicated than a simple analysis above, but makes you think, that if it wasn’t broken…..?
    By the way my Axe did not look anything like the one in the film – OK thinking is hard work as well – Any one for coffee (service please!!)

    • edreidyork · April 2, 2015

      Hi Leigh – great to have your contributions; I’m sure you won’t be alone in your thoughts, though there are some very positive stories out there, even on the “engineering apprenticeships” front. Just check out http://www.derwenttraining.co.uk for some inspiration, as it’s a rapidly growing organisation run by some brilliant people. Thanks for responding – and hope you’ve graduated from your morning coffee to something even more enjoyable…

  2. Jo Clarkon · April 2, 2015

    As usual Ed’s hit the spot – I realised a couple of months ago (yes – I’m slow on the uptake!) that for what we spend in the supermarket each week (feeding two people who would benefit from eating a bit less!) the difference between shopping locally in Booths (where they do major on local produce and charge for the privilege) compared to that well known supermarket with it’s thrifty origins in Bradford, is less than a couple of lattes at Starbucks (or preferably one of the excellent independent coffee houses I prefer to frequent). So I do it – and I get great service, great food and it doesn’t take me any longer than it did before. And Ed’s right – it’s about ‘personal’ rather than just local. And I’d like to report that I’ve just had the most fantastic personal service from BT Business who provide all our mobile phone services – spooky but worth mentioning! Because just being ‘local’ isn’t enough – personal is actually the key!

    • edreidyork · April 2, 2015

      Hi Jo – completely agree about Booths – they absolutely set the benchmark for service (and range) in grocery, and local/personal is what drives them. Also encouraging to hear BT getting it right too!

  3. Pingback: Are We All Artisans Now? | EdReidYork's Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s