The Bucky Balls Saga Continues

Earlier this week, I saw a WSJ interview with Chris Zucker, the founder and former CEO of BuckyBalls, the cool little office gift idea that took the market by storm in 2009.  In 2012, after three years of being on the market, news of small children being hospitalized after consuming the small, strong earth magnets, hit the media.  The Consumer Product Safety Commission, or CPSC, rightfully stepped in and demanded that BuckyBalls provide a plan to improve the product safety and promote public awareness of the inherent dangers in the hands of children.  BuckyBalls complied, but in July 2012, the CPSC went one step further and sued to completely ban the product.  This, I believed, was overreaching.  Now, the CPSC is going one step further ... attempting to hold Mr. Zucker personally responsible for damages.  This, as a business owner, is dangerous.

I don't want to re-opening the debate on whether the CPSC did the right thing with banning BuckyBalls from public consumption.  Instead, where this latest chapter in the saga starts, the question will be whether the courts find Mr. Zucker personally responsible for the issues that BuckBalls caused, and hence piercing the layer of corporate limited liability.

I have heard a number of different things, good and bad, about Mr. Zucker, and indeed I don't know all the facts of the case.  If Mr. Zucker did act irresponsibly and negligent (i.e. - to the extent of cigarette producers misleading the public), there is an argument for pinning the damages on him.

If, however, BuckyBalls responded to and complied fully with the CPSC requests and did everything in their power to further the safety of its product, then I can't see how the CPSC would find Mr. Zucker (and by extension, all shareholders of every corporation) personally responsible for the damages.

The ramifications are scary.  If this lawsuit succeeds, imagine the impact on every other corporation that produces products for our consumption.  If shareholders (and possibly by extension, stakeholders) are personally responsible for damages from products that are made in line with every safety guideline and legal requirement, who would risk investing in or inventing new products?

I know, I know ... children were hurt, even hospitalized, because of BuckyBalls.  Interestingly, more children are hurt and even killed by balloons annually.  Again, the responsibility comes down to the parents.  I believe that if you provide enough educational material to the public to safely consumer your product, at some point, you must hold the public responsible for improper handling.

Hair curlers momentarily left unattended.
Box of matches unintentionally left out.
(Dare I say) Gun cabinet absent-mindedly left unlocked.

You get it.

The CPSC has it's job, and for the most part, it does it very, very well.  This lawsuit is a dangerous precedent, and as entrepreneurs, we should be watching it closely.

P.S. - Possibly a more frightening thought, one which Mr. Zucker alleges, is that the CPSC is pursing the new lawsuit in retaliation to the BuckyBalls campaign against the CPSC last year (see inset picture and video below).  Granted, I also believe it was a little over the edge and mocked a little too much, especially in light of the seriousness of the injuries, but let's hope revenge is not an underlying motive for a government agency.

Thoughts?  Please share below!

Are You Who They Say You Are?

It is no secret that identify theft is a huge problem.  With information flowing freely from device to device through free Wi-Fi, and individuals, myself included, relying on cloud-based services to store documents, photos and personal data, it's no wonder it isn't more prevalent.  Of course, most of these things are save and secure, but it doesn't take much for a hack to get into your business if he or she really wants.  With that said, below are a couple of articles I found that help make you aware of the dangers and provide a few tips to protect yourself.  Enjoy!

First, watch this video by Becky Worley of Yahoo's Upgrade Your Life to see just how easy a talented hack can ascertain your information ... then beware of ever joining a "public free Wi-Fi" spot!


Her write up can be found here.

More recently, my former marketing professor, Ken Homa, from Georgetown University wrote a couple of interesting posts about his experience and close calls with identity thefts.

His personal account is enough to make anyone nervous, and he then provided some great tips, which I have included below.

1. Take this privacy stuff and ID theft seriously.  If it happened to me, it can happen to you.  My view: not a matter of “if”,  it’s a matter of when. This is an instance when an ounce of prevention really is worth a pound of cure.
2. Tighten-up user IDs and passwords. If you use common User IDs (e.g. your name), it’s like shooting fish in a barrel for hackers. Similarly, simple passwords are easy to crack. Use letters & numbers, caps & lower case, special characters. Be as random as possible – e.g. don’t just cap the first letter.  Strong passwords aren’t unbreakable to pros, but can hinder the amateurs.  If you’re not yet a believer, see Gotcha: How long does it take to hack a 16-character password?
3. Hold the phone.  Mobile is the weakest link in the security system … by its general nature … and because people are lax re: cell security.  My take: Any and all mobile transactions open you up to trouble. Do your banking via your smart phone and you’re asking for trouble.
4. Subscribe to an ID theft tracking service.  They’re a relatively cheap insurance policy.  They don’t catch everything, but I’ve been impressed with what they detect and how quickly they report what they find – essentially real-time.  And, while they don’t fix the problem, they can usually point you in the right direction.
5. If hacked, immediately place a fraud alert with the credit bureaus (Equifax, TransUnion, Experian). Easy to do online – just go to any of their sites – if you notify one, they notify the others.  Fraud alert lasts for 90 days.  During that time, there are extra levels of scrutiny – including a phone call to you – if somebody tries to dink with your accounts or apply for credit in your name.  Extra bonus: when you place a fraud alert, you get a free copy of your credit report. Note: you can place a 90-day fraud alert proactively … even if you haven’t been subject to suspicious activity.
6. File a police report.  Just call a local station and ask how to do it. In my case, an officer was promptly dispatched to my house.  He was courteous, and efficient.  The entire process took only a few minutes.  Armed with a police report number, you have the option to extend the fraud alert for years, not just months.
7. Read your account statements.  Don’t just glance at them and throw them on a stack.  Scan for unusual transactions, and check your credit max and current balance – if either move unexpectedly, figure out why. Note: Sometimes crooks will hack in and simply shift your credit line to a different (new) card within the account.
8. Heads-up when you complete a big, extraordinary transaction.  I don’t know how or when the bad guys got my info, but I have some suspicions.

Unsubscribe Me

I am subscribed to more newsletters than I care to recall.  Often, I receive an email from an organization who clearly got my name from a mailing list.  While I generally tend to delete these emails and be done with them, sometimes I find myself at the bottom of the email looking for that "unsubscribe" link.  While I've been leery of using it, as doing so confirms my email address, if the email appears to be legit, I will do the organization the "courtesy" of letting them know I am not interested.  Recently, one such unsubscribe directed me to a great unsubscribe page, and I actually found myself changing my selection.  It was great, and it got me on the hunt for others great unsubscribe pages.  Below are few I found.  If you have some other good ones, share them in the comments below.

Hubspot:



A better quality link to the Hubspot video.


Groupon:



And even a simple landing page that makes you smile:

3 Leadership Skills that Trump All Others

Inc.com: The first job I accepted after college was with a large home builder in Phoenix. In my first year, the company had been taken private, carved up, and the pieces sold off. During this span of time, I worked for three different companies all while sitting at the same desk.

I stopped buying business cards for a while.

When the dust finally settled, I had managed to tag on with a small group of people who made up the Phoenix office for a California home builder entering the Arizona market.  None of us had the experience to become the division president or CEO, so the "higher-ups" brought in someone from the outside.

They brought in an accountant.

Given this was a construction company, I was a little confused why we would hire someone who didn't understand the intricacies of construction. On top of that, in an industry that consisted mostly of rough, coarse and hammer wielding men, our new leader was a woman.

A female CPA named Kathy, running a construction company.  This was not what I was expecting.

Also disconcerting to me was that, in an era when technology was creeping its way into every aspect of business, Kathy's time management system consisted of sticky notes placed in an "accordion styles" folder that, when a specific day was opened, reminded her of specific deadlines that were due. In contrast, I was methodical with time management, often keeping spreadsheets to manage my to-do's and being an early adopter of PDAs, as evidenced by my expensive Palm VII paperweight.

I had serious reservations about how her background and management style could lead such a complex business.

As time wore on, however, I became better acquainted with Kathy, as did everyone in the office and in the field. That's because while she was at the top of the organization, she made it an early priority to spend a great deal of time with everyone in the company.  From the office purchasing staff to the accountants to the dusty field personnel. She was personable and outgoing, and had an air of confidence that was contagious. Over the years, she went on to lead the company to amazing growth, and we became one of the top home builders in Phoenix.

Kathy was able to lead our team and achieve this success by having a set of skills that trumped any specific skill needed to build a home or develop a piece of property. She created cohesion and motivated her team by being:

1. Engaging

Kathy may not have known the fine details of post tension slabs or H-25 framing ties, but she knew how to manage the people who did. Weekly manager meetings, which she oversaw and facilitated, were some of the most efficient I have seen. She would maneuver around difficult construction issues by simply engaging all of the managers at the table and getting to a solution. She knew everyone's strengths and weaknesses, and she allocated "us" accordingly. Maybe more important, she did everything in a manner that was personable and often humorous, but never disrespectful or derogatory.

2. Encouraging

Kathy was great at encouragement. Over my years with the company, I had been recruited a few times by other companies. When this happened, I would always discuss it with her, both to get  an understanding of where I stood with the company as well as emphasize my desire for more responsibility. Somehow, she always managed to encourage me to stay and did so without ever promising anything (including, unfortunately, any pay bump). Eventually, the ultimate encouragement came when she promoted me to director of purchasing.

3. Enforcing

At some point in time, a sticky note with your name would end up surfacing in Kathy's filing system. That meant you had a deliverable or task due. If you had not completed it, you waited nervously for the phone call or the casual visit to your desk. If you missed your deliverable around the time of a manager meeting, you were undoubtedly going to be on the hot seat. Somehow, she had a way to instill fear for missed deadlines, which always motivated us to get things done. She also took a great deal of responsibility herself, and we never wanted to let her down. I have no idea how she did all of this, which is probably why she was so good at it.

We had an amazing team during my early years with this home builder. I was incredibly fortunate to have had a few mentors during this time, but I perhaps remember Kathy most profoundly because while she was the least likely person I would have pegged as a role model, her management style was most influential to mine.

I haven't spoken with Kathy in years, and I understand she has retired at the top of her game and is enjoying much deserved time with her family. I suppose it's time to follow up with her ... so I suppose I'll paste a sticky note in my planner to remind me soon.

If you know someone you appreciated as a mentor in the past, why not share their story below!

5 Ways Small Retailers Can Compete (and Win)

Inc.com: A few months ago, I read a conversation on the discussion boards of The American Specialty Toy Retailing Association (ASTRA). In the discussion, an owner of a small toy store was recollecting a conversation between two young shoppers she had overheard in her store. The couple, upon seeing a toy they really liked, scoffed at the price and mentioned that they had seen the same toy at a larger retailer for considerably less. The storeowner allowed the couple to leave without engaging or purchasing anything, and then took to the discussion boards to express her discontent with suppliers for bending to the whims of her big-box competitors and failing to "help" small specialty stores like hers.

As the co-founder of Wild Creations, a developer and supplier of toy products, I took issue with the discussion. We sell to both small and large retailers, and, sure, we give better pricing based on volume. It's Business 101. We are, however, a small company ourselves and deal with the same pricing pressures as the retail stores we supply. I would never expect our suppliers to treat us like a charity, so our strategy is to differentiate ourselves on something other than price.

We compete on experience.

I am shocked at how many small retailers fail to see this opportunity. Small retailers, quite simply, cannot compete with the likes of Walmart or Amazon on price and expect to survive, no matter how you slice it. Like Wild Creations, they need to compete on experience.

One of my favorite examples of how a specialty retail store competes on experience isWonder Works of Charleston, South Carolina. A small chain of four toy stores, it is run by a vibrant and excitable entrepreneur, Christine Osborne. When I take my six-year old son for a visit, we don't expect to get deals from a clearance rack. We expect to have an experience.

Here are five things small retailers can learn from Wonder Works in order to compete on something other than price.

1. Provide Incentive

When you walk into a Wonder Works store, there is typically someone there with a bright smile to greet you and shove a toy in your hands. The stores are small, but there is always room to sample products and interact with others. It's a playground, and kids (and, admittedly, I) love it. As well, Wonder Works regularly holds events, such as outdoor festivals, sidewalk sales, and fundraisers to encourage people to visit.

2. Offer Value

Wonder Works doesn't hide the fact that prices are probably higher. Instead, they create value by providing an experience when you visit. As well, regular patrons are rewarded with frequent specials through e-newsletters and social media. Unlike most small retailers, they put experience ahead of keystone.

3. Differentiate Products

Because large retailers rarely take chances on new products or new developers, specialty stores have the first opportunity to offer exclusive new items. Wonder Works was one of the first stores to offer our Wild Creations' EcoAquarium, and it continues to be one of their best selling products. Now, they are one of the first stores we engage to test new products and ideas.

4. Get Online

Although Wonder Works is still small by comparison, they offer a fantastic toy catalogue and website to support the in-store experience. It should be no secret that online shopping will continue to become a preferred method of shopping, so offering your clients this convenience will be a key to success.

5. Go Social

Wonder Works excels at attracting and, more important, retaining fans, especially on a local level. A playful newsletter, constant updates to their website, and social media channels, and an owner that is ubiquitous in Charleston and throughout the toy industry, assures that customers and fans are engaged constantly. No matter how small your retail company, you need to be engaging your customers through social media.

For any small business, competing with large competitors with vastly greater resources is always daunting. For specialty retail stores, the challenge is ten fold. To succeed, retail business owners need to work hard...plain and simple. Wonder Works' Christine Osborne is one of the hardest working individuals in the toy industry, but if there is one thing you will learn from her and Wonder Works it never seems like work!

Do you have a success story about a small retail business that is beating the odds and succeeding? Please share below!