You Aren’t a Real Company Until You Have This

When my partner and I started our toy company we had taken an old, tired product (a hula hoop) and reinvented it in multiple fluorescent colors.

It was beautiful to see when you walked by the display in a store.

The existing hula hoops at that time were boring light blue and pink. The gender association cliche of those colors was mildly annoying to me, too.

We called our product, the Maui Hoop and invested in a booth at the New York Toy Fair. We planned a lavish, Hawaiian-themed decor.

However, my partner and I knew that our sales would be limited to just one product, however cool it was.

So we invented an even cooler product which we called the New Wave Hoop (it was the 80s, so … New Wave).

Even with two products, our booth seemed a little empty so we came up with two more products that weren’t very good at all.

In fact, I only remember one of them — a plastic tennis racket with no strings. A kid could dip it in a bucket of soapy water and wave it in the air to make giant bubbles.

We didn’t get any orders on those.

We did receive many orders, including a few chain stores on our two different hoops, and the following year we added quite a few things to our line of products.

We were off and running.

What You Need to Start a CompanyYou can start a company with one great product, but if you want to grow and be a real company, you must add more.

Often, small companies are started by creatives who have an idea for a really cool product and then that’s all they do.

They can’t or won’t add more products to their line. I’ve observed several reasons for this:

• Maybe they don’t have enough money and they don’t have the know-how to raise money.
• Often, they feel like they want to see if the initial product is going to do well before investing more time and money.
• They just don’t have the stomach for taking on additional risk.
• They can’t think of additional products to add that are novel enough to do well in the market.
  
  

I call this the One Product Paradox.

You think starting and running a company will be easier and safer with just one product to manage, but it’s actually harder.

These companies always dwindle until they go out of business.

Typically, buyers don’t want to buy from a company with only one product.

A retail buyer takes a chance to order a product from a startup. It is always a bigger risk than buying from an established company.

Why?

It takes work to set up a new supplier in the system.
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If they only sell one thing, or if they don’t offer new products every season, why go to all that work? It’s easier to buy a similar product from a competitor that’s already set up in the system.

Most novel products only have a lifespan of one or two years unless it becomes a classic which is rare. Again, not worth setting them up.

Also, the statistics are working against startups in general. They have a higher chance of going out of business, and if they don’t have multiple products, that chance increases.

I’ve observed the one-product paradox with more than one friend.

In all cases, they invented a unique product, went to the effort and expense to manufacture and buy inventory, and then tried to sell it.

I told two of them to add new products to their line. And no, different colors or patterns don’t qualify as new products.

Product extensions are easy. Take the company in the photo above (which is completely hypothetical; I don’t know this company).

I’ll posit that they start with face wash, then add moisturizer, then facial cleanser, eye cream, etc. Voila. It’s an entire line of products.

The only novel part of this line could be the charcoal facial cleanser. Let’s say they were the first to introduce this concept. It’s completely novel.

The brand’s other, subsequent products might be completely ordinary in the sphere of facial care.
It doesn’t matter. If people love the cleanser, they have a good chance of buying the add-on products. Then the company can become a brand.

After establishing itself and earning money, maybe they can add makeup products. Or sunscreen products. Or haircare products — shampoo infused with charcoal?

That’s how you add new products.

That is what you must do: add new products.

After your first couple of seasons and decent performance at retail, buyers will continue to buy from you.
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Then you will have a real company.