In my past life (17 years ago) I used to make socks for my father in his hosiery factory. After 5 long and laborious years of trying to establish an export division, I got a lucky break with the European leading retail chain store of that time called ‘C&A’ (you may remember their bags that had a rainbow color stripes on them).
I had my first order of $ 10,000 worth of Baby Socks to ship to their stores in Germany and the UK.
Before starting production, I was invited to the C&A India office for an orientation on best practices and dos and don’ts for producing goods for them. Assembled in that conference room was a motley group of exporters all dealing with C&A for the first time.
A tall imposing German sporting a blond crew cut entered the room and greeted us, and then asked us one question “I assume some of you have babies or have been around them – what do you observe they do the most?”
As usual at first no one spoke and then there was muttering of ‘crying’ or ‘wetting their nappies’ etc , etc… The German gentleman looked puzzled and said ‘I doubt if Indian babies are different, but in Europe, the first thing a baby does is, it put things in its mouth. It takes typically seven minutes or less for a parent to discover the same and pull the item out. Hence, all the goods we buy for babies are tested for how safe are they for a baby when it remains in their mouth for seven minutes.’
I was explained how C&A had created artificial baby saliva and how our socks would be immersed in it for seven minutes to check for chemical emissions and other harmful reactive releases.
The next revelation was the German white sofa test. We were explained that lots of households in Germany have very expensive white leather sofas and it was not uncommon for Germans to enter their homes drenched by the rain or snow or after playing a vigorous sport and immediately collapse on the sofa. In our case, Babies could wet their nappies followed by their socks while sitting on that sofa. Hence all clothes had to be white leather ‘color stain proof ‘ to prevent massive lawsuits against the retailer who sold them to the consumer.
My Baby socks experience really taught me some very valuable lessons:
- Prepare solutions that are based on real life observations rather than just theory. I started contests2win.com just because I was so frustrated at how difficult it was to cut and paste competitions in postcards to weird sounding post box numbers. That became a real business!
- Ideas and offerings will have far more extensions and uses than ever imagined by you. Our business of competitions led to us making games for brands. That led us to China with mobile gaming. And we now make games for consumers without brands getting involved.
- When I wanted to price my socks, I did the obvious – I went to the London C&A store to note the selling prices of all kinds of socks and then worked them backwards, deducting margins, etc so that it would be compelling to C&A and also profitable to us.
I was shocked to realize that Baby Socks were priced exactly like Men and Women’s socks! It was so obvious – a mother or father who bought them equated their baby to be at least equal and in most cases more important than themselves – hence intuitively they accepted prices that applied to grown ups! Hence I learnt that value pricing was so subjective – not typically the ‘hours + labor’ formulae that so many Indian firms are used to…
I run a digital entertainment business now, but when I see babies & socks & CEOs, I chuckle and remember some important lessons learnt!
*******
Originally posted on Jan. 2, 2010 on rodinhood.com
