2006 Headlines
Adam Hocherman '06, CEO of American Innovative, Interviewed by Randall Sawyer
RANDALL: Adam, you founded American Innovative, developed the Neverlate clock and recently appeared on QVC. Tell me about your QVC experience.
ADAM: The day itself is six minutes long because of the format of QVC. However, there is months of preparation involved prior to the actual airing--getting your foot in the door, review and approving the product, delivery, special packaging requirements, special labeling requirements, insurance riders and more so that all of the product is on hand when I am on tv pitching my product.
Enter Sunday, October 30th. I had the benefit of daylight savings time switching that night which was huge as it turns out, because the way that the timing works is that the show I was on was called "Great Gifts" and it ran from 7-9 on a Sunday morning. The format works in a way with a professional host and I was billed the inventor, which lends credibility to the product. I run the demos. We have a conversation. Good stuff.
I was up Sunday morning at about 4 am to arrive at the studio around 5 am. The host has an amazing skill--he spends literally 5 minutes with me and the product and the show is live, 24/7. They have about 5 sets and there are other entrepreneurs and established QVC folks you know that are on before and after in perspective 6-minute windows and he jumps from one table to the next, sort of without breaking stride and is able to talk fluidly you know to make the sale for the item. I am there to sort of fill in some of the gaps and I had visuals.
My product, The Neverlate 7-day Alarm Clock, is primarily designed for college students, but the gist of it, as you know, it has seven different settings, one for each day of the week, so it accommodates the student's class schedule or someone that is training for a marathon or whatever it is that makes your morning schedule erratic. So I had made visuals demonstrating different schedules, sort of like the Outlook weekly view and I had the students schedule and is showed a typical Cornell, like Monday, Wednesday, Friday, Tuesday, Thursday kind of thing. I had one for part-time working mom, another for gym rat, etc.
RANDALL: Tell me about your visuals?
ADAM: I had these schedules matted on a piece of foam core. QVC has an incredibly powerful camera so they will zoom up to me talking in front of this visual about trying to get the point across about why different people on different schedules and hopefully the viewers have an "AHA" moment, like ahh, well that is my schedule--I am a part-time working mom, I work three days a week and I need this clock.
RANDALL: So you sold a little over 400 units in 6 minutes.
ADAM: Right.
RANDALL: Tell us about the excitement of stepping onto the stage with the lights and the cameras and being live on national television.
ADAM: It is exciting. You know it is a real study. They are very professional. Even at the crazy hour of the morning that I was there, you know the people there are bright and friendly. They know that you haven't necessarily done this before. You know it looks kind of like the set of the Today Show or whatever. I was in a bedroom set which actually it kind of looked like a country bed and breakfast. It wasn't exactly the sort of bedroom I was expecting, but it was a bedroom nonetheless.
I was less nervous than I thought, I guess in part there was some relief in that like certainly no one I know is up at you know 7:30 on a Sunday morning, but a lot of people are and you know the whole QVC model is incredible. I will tell you a little bit, actually about some of the science that goes into the sell and from sort of an MBA business school perspective, it is incredible. So, QVC has this down, the metrics, down to just an incredible science right down to real time feedback to the host and to the product entrepreneur as the spot is going. So what happens is that there is someone called the producer and he is looking at a real time, you know second-by-second chart of how many operators are live, in other words who are taking phone calls, they have call centers, 3 or 4 around the country, how many are on line, how many callers are in the queue. There is a graph of new calls per second basically and if you say something that has a particularly profound effect on the sale, like say that the gym rat board didn't have a good effect but the part-time working mom did and 20 seconds later there is a spike in phone calls, they will feed that back to the host and he will orchestrate the conversation back to that point. Real time sales and marketing feedback.
RANDALL: Awesome.
ADAM: And beyond that they know exactly sort of what the expectation is at any particular hour, any particular slot. You know, I guess with some reasonable degree of room for error. I think QVC has been doing this for about 19 years and they are the market leader. They have a couple of smaller competitors, Home Shopping Network and one of them that was home shopping group. A smaller one that was purchased recently by MSN or something like that, certainly the reliability of this channel is amazing, but QVC is, you know, they are really the market leader and they have it down to a science.
RANDALL: Talk to me about your expectations in advance of the show and the reality afterwards.
ADAM: I had sort of loftier expectations going in than I think perhaps I should have. Everything has a target audience and a proper target audience and in this case my product was put on a segment called great gifts and to my mind, it is a great gift. It is, in fact, but you know when I think gift I think I am a guy, I think an electronic item or something like that, but when they think gifts they are thinking about it in the QVC world. Their demographic, although they won't really give you a super-firm "this is our demographic", is mostly women, primarily women, you know.
RANDALL: Stay at-home moms?
ADAM: To a large extent, although not exclusively ... and you know the sort of things that were selling very well at that hour of the morning were not electronic items. They were more "gifty" items. We are approaching the Christmas season. There were scented candles and make-up mirrors and cosmetic products and then you know this electronic item of mine. It did sell but I wasn't expecting it to be a run away. I thought that sort of the whole fact that I got on QVC was kind of exciting and obviously they saw the value conceptually of the product, but I went into it thinking well, one of two things is going to happen, this is really going to strike a chord with this demographic for some reason that I don't fully understand, I just don't. I just don't know exactly what will strike them or not, so you know, and if not, then it might miss the mark and it sold moderately well. Unfortunately, QVC has pretty firm, lofty expectations. To me it is a big six minutes - to them it is, you know, "we will put somebody else in that 6 minutes". But it was interesting.
RANDALL: Let's talk for a moment about lessons learned.
ADAM: I let my guard down in one respect, well something I learned from my previous company. My previous company sold a sophisticated on-line mapping product to the government and we never really bothered to ask the government what they wanted in an on-line mapping product before we built and attempted to sell it and it didn't sell very well. I should have thought a little harder about that, despite the fact that very few people walk away from an opportunity to sell on QVC ... nor would I have, but you know if you think about it, you know an electronic product to the sort of demographic that QVC is primarily catering to it is not necessarily the best fit. I would have thought a little harder about that. I went right into the college student pitch thinking that a lot of these folks have sons or daughters in college and/or there are grandparents who watch this a lot, but in fact I might have done better with sort of you know taking a different approach, maybe the more part-time approach of the shift worker approach first and then pitching the student aspect as an ancillary use and I think I may have missed the...
RANDALL: The part of the market share.
ADAM: Yeah. I may have missed some of the market share, so I am not sure that everybody was getting this because perhaps they don't have children in college or their children are too young, I am just not sure and QVC actually didn't give me great information about sort of what that demographic was. Their feeling is sort of, "it will sell, if it doesn't sell there is another Neverlate product right behind it." So it is not a tremendous problem.
RANDALL: Well, that is a great observation. Do you think that in the future you will be back on QVC?
ADAM: It is possible. My next product is something in the kitchen electronic arena.
RANDALL: Awesome.
ADAM: Now, again it comes to positioning. The product I am developing is primarily to the "William-Sonoma" market, so it is very high-end. A lot of people today with the Viking stoves and the granite countertops and all, this is a product that I want to fit in that environment. Now if you then want to put that product in the QVC setting you can do it. One way or another it is not an expensive product, but you know again it comes down to positioning. The retailers do look at one another, they want to know where the product is, and they want to know where their product sits and where the price point sits in relationship to other places that it is being sold. You know, alternatively one of the greatest things I gained from this experience was that now I know somebody at QVC. I can pick up the phone and call somebody at QVC, they may or may not want to hear from me but?.for better or for worse I have their phone number and I should mention that I owe that to some extent to a classmate of mine, Vickie Barbadoro.
Originally, I was planning to go to what they call a QVC product search event, which is basically, an open casting call. I had no idea how many people would show up for this and there were about 300 people milling around with every product you can imagine and all the accoutrements required to demonstrate that product, but I had sent a message out to one of the JSMisc lists and I got an email from Vicky. Vicky had a friend that has a friend that was a buyer for QVC at one point but is now at Urban Outfitters. And somehow or another I wound up having a conversation with the buyer prior to ever getting there. By the time I got there, they had already decided that they wanted the product. They didn't even make me demo it.
RANDALL: That is an awesome Cornell connection.
ADAM: Cornell connection, absolutely.
RANDALL: Talk to me about the health of your company, American Innovative.
ADAM: Well, the company is doing very well and you know QVC was a terrific experience. The sell through was not spectacular. I am not expecting to be asked back for this particular product. And that is the hiccup. But, luckily, at this point in the company's career it is one that I can absorb. The product sells well at Linens 'n Things which was the first retailer that I got into and subsequently I have found that it sells extremely well via niche on-line web stores. In particular, one that I am a big fan of today is called ThinkGeek.com and this store has an incredible presence. I have had five other customers come to me and say we saw your product ThinkGeek, how do we get it? That is how much clout this company has. The website is for students, techno-gamers, IT professionals, software programmers, consultants and it is selling very, very well via that channel.
So, a year ago had my first customer been, you know, QVC rather than Linen 'n Things this would have been quite demoralizing and very difficult to rebound from, but today, I have cash in the bank and the company is profitable and I am beginning to forecast and plan for next year. I will be taking the company with me wherever I move to - most likely Boston - and running it full-time as my full-time profession. I am in a position right now to do that. So, that is all very exciting and you know everything has gone remarkably well. So, QVC was a learning experience and not an expensive one, so there was some administration and a lot of energy and some emotion invested in this, but you know certainly there are other entrepreneurs on QVC that come to QVC and, like, this is their "shot".
RANDALL: Their day in the sun.
ADAM: If they fail they are done and they don't have another channel and they are left with a lot of whatever their product is, stored in their basement which is literally how a lot of people do their first time on QVC. I mean QVC makes some amazing entrepreneurs out of some unsuspecting people, but I think that it potentially also hurts a lot of entrepreneurs that we don't hear about that just aren't as sophisticated. In my experience, working with QVC it is pretty easy to deal with, all things considered. The people were nice, relatively easy to get a hold of, knowledgeable. Generally a pleasant experience.
RANDALL: Great. Adam, congratulations. Thanks very much for talking to me today and I hope American Innovative continues to thrive.
ADAM: Thanks, Randall.
