Tuesday, August 24th, 2010

Contemplating an Artisan Economy

Contemplating an Artisan Economy
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For those who’ve been around me lately, I fear I’ve become a bit of a bore: Yet another “Glum Gus” trying to run the math around the way we interface with our planet—and perpetually finding results somewhere between daunting and terrifying. I won’t talk specifically about this today, but I will in posts to come. For now, I want to consider a strange paradox I find myself facing. I suspect I’m one of many asking the same series of questions, which seem to have so few clear answers.

I’ve been at odds

I love making things. In fact, it might be one of the experiences I enjoy more than any other: the fervent energy that comes from really getting into a project and doing this “thing” is quite infectious. Some of our projects are for paying customers, while others are “labors of love,” financed by our firm, largely for the fun of doing it. How we’re compensated isn’t all that consequential—although it probably should be—the making is reward in itself. If we had unlimited wealth, I suspect we’d still likely do something like what we do right now.

In order to do my job well, I have to help others sell more stuff. Sure, this is a bit of an overly general statement, but it’s largely the case. If smashLAB does what it promises, our customer should then, “move more product.” As much as I can abstract this, and construct reasoning aimed at countering any guilt I may feel, the truth of the matter is that I’m deeply tied to a system of creation and consumption. Worse yet, this is a system that likely cannot be maintained should we wish to preserve the existence of our species on this planet (at least in the form and numbers we see now).

Sure, we could assist more groups committed to sustainability—which is something we’re actively working to do. That being said, I can’t help but see this as a more grey situation than that. In all but the most extreme of cases, it’s not as though there are “good” organizations and “bad” ones. Life is rarely that Disney-esque. In our world, the real “bad guys” are just us, unwilling to challenge those things we see and know to be flawed, but just seem like fish too big to fry. For the sake of this post, I’d like to (in a very limited way) explore the possibilities of commerce at a more human scale.

Making it better

I like to consider myself a “recovering capitalist” (and prospective human). Although capitalism was certainly the position I began from, I continue to be presented with indications that it is simply an insufficient model for humanity to base its actions upon. I’m certainly no great political thinker, but I hardly think one needs to be, in order to see why this framework is so problematic: a system in which the needs of the individual so greatly outweigh those of the populace tramples all else in its way. We’re so deeply ensconced in a “me” culture, that we don’t just think our myopic greed is acceptable; we believe it to be a right.

The greatest obstacle I see in this is a game-like sensibility in which owning more is the sole measure of success, be it from the perspective of the individual, corporation, or nation. This zero-sum perspective, however, is fundamentally flawed as it fails to recognize our interconnectedness as part of the equation. As seductive as the notion of “winning” may be, it stands for very little if the world we’re left with is left poisoned, barren, and uninhabitable. All the shiny toys, palatial homes, and ballooning bank balances, won’t “trade us up” to a new planet.

I’ll always lean towards discussions of sustainability when considering such topics, due to the persistent thinking that we’re entering (or are in the throes of) an endgame should we not take drastic measure. This however says little of the other grave challenges of this sort of thinking poses. For us to so blithely think that the Western World’s global actions are not linked to the threats of terrorism are evidence this. Mark my words: our mad desire to own more than our share will come back to haunt us (if it hasn’t already). We seem to see globalization as a method of accessing the resources of the rest of the planet for our own gain, instead of the opportunity to balance the deck and distribute the wealth as we all inherently know we must.

For my deep misgivings about capitalism and its many trappings, I still believe in entrepreneurialism. It’s not the creation of things, nor the desire for freedoms through one’s own actions that I find problematic; it’s when the blind pursuit of power supersedes human rights, healthy ecology, and basic notions like happiness and balance.

The race to the bottom

I’ll now step off my soapbox for a moment and pose a few questions. The biggest of which relates to whether we might be wise to start considering a different contest. It seems to me that beyond the wanton indulgence of our current game, we’ve unintentionally locked ourselves into a particular idea of how to generate wealth. In this we’ve chosen to cast aside most creative thinking surrounding revenue models, replacing them with the “more for less” conception.

Yes, this model is a particularly compelling one to most. Who doesn’t want to get “more” for their dollar? Why not go to Costco and buy a 4 gallon vat of mustard even if there’s no way for most to consume it? Who wouldn’t want a toaster for $8, even if it will break within months—heck, at that rate why not just buy a new one? The problem with this thinking is that it leaves us buying bigger homes to somehow warehouse these items (so ill-matched to our actual lives) while wasting our time trying to find ways of disposing of all this half-assed junk that wasn’t built to stand the test of time.

For the consumer this has the added inconvenience of requiring the recurring purchase of things they’ve already purchased. For companies this is equally problematic, as a great many are stuck in an unfortunate loop. Once another company drops the price, they must follow, and ostensibly product quality can rarely be far behind. This brings with it more support costs from dealing with angry customers, as well as advertising to try to get reach new (yet untainted) ones. Or, they may be forced to find some other way to reduce costs: perhaps by using environmentally destructive materials, or by contracting production out to groups with questionable (or even criminal) treatment of workers. There are many ways to cut costs, but perhaps we should be asking ourselves: at what cost?

Do we want to own crap, or make crap, or be in an endless race to squeeze every drop of profit out of everything we make? Yes, riches can be found in making great volumes of product with a very narrow profit margin. Can there not be equally fruitful ways of conducting ourselves without such a cost to our neighbors and the planet we call home? Is it not possible for us to take the overall cost of our actions into consideration? Is it possibly time for us to weight our decisions in a more cohesive and holistic fashion, which acknowledges that even the costs that don’t end up on a balance sheet still carry relevance?

Another model

I like to consider myself a pragmatist. Capitalism is here to stay (at least for as long as we’re here to stay) because it plays into our own selfish and short-sighted nature. Whether I believe this to be admirable, or a suitable measure of our otherwise innovative species, hardly matters. It simply is. With that in mind, I ask if we need to look at this as a practical problem for businesses.

For my continued criticisms of Apple, they serve as a brilliant example of how the game can be changed. While most other computer companies concentrate on lowering the price point and offering an increasing number of features, they have effectively rewritten the game, with few able to even follow suit. By instead concentrating on making their products more desirable, they’ve become a ubiquitous brand with over $25 billion in cash reserves.

So if we care not about the planet, its citizens, or future generations, at very least, we can probably all agree on more wealth; can we not? My argument, then, is that the race to the bottom is an exercise in futility; because, if you’re only competing on price, you’ll quickly find yourself outpaced. No matter how low you can get the price, consumers will tire of your product and competitors will find ways to lower the price even further. Again, I ask: is this a game worth playing?

I question whether we might be able to rethink our ideas surrounding stuff. Could we work within the confines of capitalism to craft more suitable (and healthy) solutions? Is it possible for us to make things that afford better long-term value to the buyer, are less harmful to the planet, and afford their creators greater profit and balance as a result?

We all want to feel special

You don’t want to buy a piece of moving metal that causes environmental destruction, breaks all the time, and continually drains your bank account. Nor, do you want to build a massive residence that takes every penny and moment you have to keep clean, organized, and maintained. I also posit that given the option of getting the cash back for the fancy wristwatch you bought on a whim, you’d leap at the opportunity.

In spite of our voracious appetite for material goods, we’re actually quite bad at the whole “consumption” deal. The reason for this is simple: we’ve been taught to imbue our purchases with greater weight than they truly deserve. A shiny car will not help you attract a mate any more than a big house will make your family happy. The expectations we have for our acquisitions are incongruous with actuality. Sadly, people just like me are very good at continuing to bombard those around us with such lies. Perhaps Bill is right; maybe everyone in marketing should kill themselves.

Let us allow pragmatism to once again prevail and consider this problem from a less fatalistic standpoint and ask how it might be leveraged to affect a more positive outcome.

In a radio interview with Debbie Millman, Virginia Postrel talked about how as the general dependability of experiences has increased, our expectations have shifted. It’s been a while since I last listened to the interview, but I remember her talking about Holiday Inn’s one-time slogan, “the best surprise is no surprise.” While the promise of consistency once sufficed as a marketing position, she argued that this is now just a baseline and that we increasingly look for more “designed” (read: special) experiences. Forgive my poor paraphrasing of this discussion, and please listen to the podcast for a better explanation of this notion.

The point I like here is that as products and services become more common, they tend to feel less precious. There’s opportunity to be found in this absence.

The emergence of an artisan economy

I think we’d all be better served by paying more. I’ve experienced this first hand, and I bet you have too. Think of something you purchased deliberately—let’s say a really great knife for your kitchen. Instead of running to WalMart and buying one at a “bargain price,” you took the time to research knives, and went to a specialty cooking store to see how they felt in your hands. You paid much more—perhaps even 100 times what you would have for the one at WalMart. For that price difference, you have an “heirloom object.” It’s solid in your hand, cuts beautifully, and makes you feel like a better cook. And because you paid more for it, you take better care of it. Instead of a half-dozen pieces of junk taking up space in the drawer, you have one beautiful tool that you’re unlikely to feel the need to replace.

As a consumer, there are many reasons for paying a higher price: Doing so tends to make us appreciate these purchases more, as we contemplate such decisions more carefully. Paying a premium allows us to demand better quality and support. Meanwhile, at this price-point, we can ask companies to behave ethically, both in terms of workers’ rights as well as in how these companies’ actions relate to the environment.

I’m of the mind that for companies, there are an equal number of benefits to higher price-points. First of all, it takes them out of the race that most of their competitors are running, allowing them to re-engage at a different altitude. Once “lowest price” is dethroned (as the primary driver) all kinds of other opportunities open up. At a higher price point, an organization is free to service fewer clients, better. They are able to create products using better raw materials, therefore attracting the attention of those who respect such attention to craft and quality. Similarly, they can leverage a greater number of differentiators like style, artistry, and storytelling.

Even more importantly, they can utilize that one magical thing that most industry misses entirely: scarcity. While many companies race to create more at a lower price, they do so by cannibalizing their future brand value and profits. We all know this: once everyone has it (whatever “it” is) it fails to be special. So, if everyone had a Ferrari, no one would think they were special—or desire one so. When everyone knows your favorite band, they become less “yours.” And if that little restaurant down the street “goes national,” you may seek out something less “cookie-cutter.” (If you’re interested in more on this topic, I’d also recommend reading: Authenticity and The Zellers Paradox.)

This is also why Apple pretends they can’t keep iPhones on the shelves. Limited supply infers value—and consequently builds demand.

We’re living this stuff

We’ve wrestled with size a great many times here at smashLAB. At times we’ve braced for growth, while at others we’ve tried to get down to just the two founders. Those who know us often ask (in jest), “Are you guys big or small today?” The roots of this wavering are two-fold. We’d like to be larger in order to provide more depth (and take a few holidays); we want to stay small, as we feel obligated to afford the very best work we can to our clients.

Part of this is a bit of a curse. A more business-minded person than I would start a contract asking which corners might be cut (without anyone being any worse for it). For better or for worse, we tend to get uncomfortable around such thinking—as though we’d be shortchanging someone without investing suitable toil; similarly, we reach the end of many projects wanting to add “one more thing,” in order to make a project just a little better. This predilection is not an intelligent one, and it negatively affects the lifestyle I lead—and the pace at which our company becomes more profitable.

On the other hand, I see how this will benefit us in the long run. I’ve watched many design firms come and go, making great promises and subsequently under-delivering, only to grow tired of the whole rigmarole. There’s no shortage of “get rich quick” schemes and seemingly inventive folks who believe they can apply an assembly-line approach to this kind of work. Most leave as quickly as they came, learning that craft and commerce are awkward, yet necessary, bedfellows for any design firm worth its salt.

For some time, I apologized for the limited number of bodies within our walls, but in light of the low-grade of work produced by many agencies that dwarf us many times, I am less inclined to do so any longer. (This sentiment is echoed by a great many of our clients, who’ve come to experience the same disconnect between size and quality, first-hand.) As a result, I’ve come to see our agency as something akin to a fine cabinet-maker. We don’t need to make all the world’s cabinets, we just have to make very good ones. By making this determination, we are liberated from chasing all the work, and instead allowed to invest heavily in the select few clients who really value what we do.

Although there are many arguments for large companies and their collective power, I continue to believe that there are substantial gains to be found in thinking small. Running a big machine with low yield leaves one vulnerable in the incident of obstacle or failure. Concentrating on a more human-scaled one affords a number of freedoms: most markedly that of choice. Unwilling to take my word for this? Read Blair’s Win Without Pitching for more thinking that follows this train of thought.


I’d like to provide some examples, pointing out how a few groups have crafted enviable positions for themselves. There’s Crescent Spur (a client of ours) that keeps improving service, but refuses to grow, even though many ask them to. The reason they don’t? They worry that doing so would separate them from their customers. Or, as one of the founders said it, “If we do that, I won’t be able to check the menu every day.” It’s true, as companies grow, their scale makes it hard to remain personal.

Then there’s Rayco Resophonics in Smithers, BC. Their resophonic and Hawaiian acoustic guitars start at $3,200 USD, and have a minimum 6 to 8 month wait. From what I hear, some rather well known guitarists are forced to (figuratively) stand in line, just like anyone else. By contrast, you can walk into any guitar shop around the world and get a Fender in any model, finish, or configuration you’d like; there’s little special about such a purchase. Rayco will never prove a “threat” to Fender, but that doesn’t matter. The people at Rayco are playing their own game. (For the record, I have no affiliation with anyone at Rayco.)

Another interesting example as of late is the DODOcase. This group (based in San Francisco) came out early with a Moleskine styled case for the iPad. There are imitators, and meanwhile, there are many other similar—and more readily available—products. Nevertheless, the wait list for a DODOcase was (until recently) up to 6 weeks. A great many (myself included) are willing to wait that long, just to get a product that is built well, and seems to be crafted with care, instead of something mass-produced in a factory somewhere.

A vision

I like the idea of an increasing number of people making better things. I also am particularly fond of people choosing their own destiny, and living in a world without bosses. Perhaps such a time is further off than I would like to admit, but I can’t help but feel that these things are all connected, and that not seeing that does have some bearing on our current messy state of affairs.

My vision is of a more evolved and human-scaled approach to business. In this we see the rise of craft and cottage based industries. We also start to find that those with real values and stories have something to afford and subsequently gain steam because they stand for something. Similarly, we learn that size is in fact something worth carefully contemplating, and that it can be self-regulating. We need not all chase growth at any price, and by abstaining from this destructive cycle, all parties can benefit.

My book: Speak Human, addresses many of these topics, and I would love for you to give it a read. The other I’m growing quite fond of is Schumacher’s Small Is Beautiful. I’m only part way through it, but am rather taken by his perspective (even though the book is as old as I am).

While I in no way believe that an artisan economy can serve to substantially remedy the ailments we face as a species, I do wonder if it might be a worthwhile exercise. Perhaps exploring such a possibility would allow us to better understand whether we might be liberated from the numbing drudgery imposed by our current “lowest-price” model.

As customers, we can “vote with our dollars” and I encourage you to remember this. In doing so we can force some of the big guys to “clean up their act,” while better distributing the wealth to companies with more mature and responsible measures of success than just “more.”

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