11 October 2018 | 25 Comments
Over the last month, I’ve been absolutely enamored by a TV show called “The Profit.” It’s a reality-style show in which billionaire businessman Marcus Lemonis invests in a struggling company. He then tries to help the company thrive by focusing on the people, process, and product.
I’ve learned a ton from watching the show, I wanted to share some of the things on today’s post. I thought it would be fun to share them through the lens of the completely hypothetical situation of Stonemaier Games appearing on an episode of The Profit.
- Location and Appearance: I think Marcus would be surprised to find that I run Stonemaier Games out of my small condo. He would probably want to see “our” warehouse, which is really the Greater Than Games warehouse (they’re our distribution broker). I’m genuinely curious what he would say about me working from home instead of having a “real” office. I’m very happy working from home, and all of the project management I do (a huge part of my job) is done remotely with people all over the world, so I’m not sure my location matters all that much. In places where location does matter–like a retail store–Marcus often makes huge changes to make the store more focused and attractive.
- People: Usually Marcus has several people to focus on as he tries to sort through drama that is getting in the way of the business’s success. I don’t think Stonemaier Games would make for good TV in this instance. It’s clear that I’m in charge (at many of the businesses Marcus visits, there is no clear leadership). However, I’m sure Marcus would question if it’s best for me to be the sole full-time employee at Stonemaier Games. I would explain to him that I delegate a ton of stuff to various independent contractors and that we publish games from other designers now, but he would probably try to shift some things from my plate so I could spend more time focusing on game design.
- Process: Marcus often finds businesses that are incredibly disorganized–their inventory systems are non-existent, their fulfillment process is inefficient, and they have a haphazard manufacturing/assembly process. Because we outsource all of those things, it’s possible that Marcus might look into them. More likely, though, I think he’d ask why we don’t do those things ourselves. While it would be quite difficult, technically it would be possible for us to have a facility in St. Louis where we make, store, and ship our games (or do a few of those things, like assemble games but not manufacturer all of their components here). I’m not sure what conclusions he would find, but he would probably look a lot closer at the money and time saved by those possibilities than I have, largely because my plate is already full.
- Profit: You would be surprised by the number of businesses who know Marcus is coming to visit them, yet they don’t know the profit margins for each of their products. I just watched an episode yesterday where he had a florist break down the costs of a vase of flowers they were selling for $83. After counting the cost of the flowers, the vase, and the labor, their profit margin was around $2. For Stonemaier Games, I think Marcus would focus on the difference in profit between a game sold to a distributor (95% of our sales, but only about a 40% profit margin) versus games sold directly to consumers (5% of sales, but close to a 70% profit margin). I think he would respect the distributor strategy–it’s much more efficient to sell 10,000 games to 10 distributors than to sell 10,000 games to 10,000 different people–yet he may question why we stopped using Kickstarter. However, I think he would appreciate the Champion program I created this year, which drives more direct sales (albeit at lower margins than non-Champion direct sales).
- Good/Better/Best: One of my favorite philosophies that Marcus has implemented in several episodes is the good/better/best model. It’s a twist on the “premium option” seen on so many Kickstarter projects: Offer the core reward and a deluxe version of that reward. Marcus uses this model to attract different types of customers. The way Stonemaier Games currently does this is by selling core games that (hopefully) offer excellent production value, but if people want more, there are expansions, accessories, and promos to choose from. I’m curious what Marcus would say about that approach.
- Gifts and Recommendations: I’ve actually made a few recent changes based on watching The Profit, so I would certainly want to share them with Marcus. One is the addition of the gift guide I talked about a few weeks ago. The other is building out our “collections” on Shopify so when someone is shopping for any Scythe product, for example, they’ll see all the other Scythe stuff they can choose from.
Have you watched The Profit? What’s your biggest takeaway from it? What do you think Marcus would say about your business?