May 12, 2010
 
BOOK REVIEW: 'The Risk Takers': Entrepreneurs Who Found Underserved Niches -- and Filled Them
 
Reviewed By David M. Kinchen
Huntingtonnews.net Book Critic
 
In their new book "The Risk Takers: 16 Women and Men Share Their Entrepreneurial Strategies for Success" (Vanguard Press, a member of the Perseus Books Group, 288 pages, $25.95) Renee and Don Martin provide inspiration -- and useful advice -- for people trapped in the corporate world, looking for a way to develop their brilliant ideas into a business that they control.
 
All of the entrepreneurs profiled -- including co-author Don Martin -- were what the authors call "ordinary" people, all with good ideas, who faced daunting challenges, but took a leap of faith and started their own businesses.
 
I would dispute that "ordinary" tag: Ordinary people don't usually do what the entrepreneurs profiled in "The Risk Takers" did. A typical climbing-the-corporate-ladder executive wouldn't do what Maxine Clark, who was president of the Payless ShoeSource discount chain, did: Leave a seven-figure salary and beaucoup benefits to start Build-A-Bear Workshop, which gives kids the opportunity to create their own personalized teddy bears and other animals.
 
"The Risk Takers" describes the personal and professional journeys of sixteen men and women who built hugely successful, multimillion dollar companies. They started with very little, opted to strike out on their own, and struggled with disappointment and failure.
 
They overcame adversity and ignored the warnings of naysayers -- and through persistence and resiliency -- determined their own destiny.
 
The companies profiled are familiar to many Americans: Geek Squad, Curves, Liz Lange Maternity, Kinko’s, Paul Mitchell, Spanx, Amy’s Kitchen, along with nine others. Don and Renee Martin, successful entrepreneurs in their own right, personally interviewed these men and women whose inspiring stories demonstrate it’s never been easy to start your own business and navigate it through all the inevitable storms to ultimate success—in any economy, in any era.
 
But, as the people profiled demonstrate, it can be done.
 
The authors say that whether you're considering starting your own business -- or looking for ways to expand an existing enterprise -- there are three time-tested, business strategies that can help you to create a new business or push your company to the next level of success:

If you adopt these strategies as your entrepreneurial mantras you're more likely to identify and take advantage of real opportunities to expand your company's product line and customer base, the authors state. The strategies are:
 
Go on a Treasure Hunt and Find an Underserved Niche
 
In the business world, there's nothing more exciting than finding an underserved niche that represents a lucrative market that everyone else has failed to spot and target, the Martins write.
 
That's what happened to Gary and Diane Heavin, founders of the Curves International fitness franchise system. When the company launched in 1992, the Heavins had just $10,000 in savings to invest in their company. Today, Curves is the world's largest fitness franchise system, with 10,000 franchise locations in 65 countries.
 
Instead of competing head-to-head with fitness giants like 24 Hour Fitness or Bally Total Fitness, the Heavins opted to serve the fitness needs of three underserved niches: middle-age and older women who are eager to get in shape but might feel intimidated by large gyms teeming with young, hard bodies; busy working women whose schedules could more easily accommodate the Curves 30-minute workout; and budget-conscious women who simply couldn't afford the pricey monthly membership dues charged by the major gym chains. Early on, Curves clearly distinguished itself from the pack of gym competitors; its services and clientele were different.
 
Targeting an underserved niche is a path that small start-ups can take. Even a huge multi-billion-dollar company can't offer everything for everyone. Targeting the right niche -- one that other business owners have neglected or ignored -- can help build a strong and loyal customer base while limiting competition.
 
Liz Lange was another entrepreneur who followed this strategy. She launched a phenomenally successful designer maternity clothing company -- Liz Lange Maternity -- which eventually sold for an estimated $50 to $60 million in 2007. She also partnered with Target to launch a secondary, discount version of her line.
 
Like the Heavins, Lange reached the heights of success by targeting an underserved niche. In her case, that meant zeroing in on the needs of pregnant fashionistas -- women who refused to let a pregnancy deprive them of their fashion sense. Lange used newly developed stretch fabrics to create chic, fitted and stylish maternity clothes. They were nothing like the tent-like and frumpy maternity clothes widely available in department stores.
 
Buck the Conventional Wisdom
 
Bucking the conventional wisdom means ignoring those who say "It won't work" or "It's never been done that way." When entrepreneurs overly rely on conventional formulas for success, they're left with a business that's, well, conventional.
 
The most successful entrepreneurs are willing to veer away from established formulas and ways of thinking. If you've launched your own business, don't just blindly accept the so-called best practices of your industry. Look at them with a hyper-critical eye. Dissect them, slice and dice them, contemplate different "what if" scenarios in your mind.
 
With no capital to speak of -- just $700 in cash -- John Paul DeJoria, co-founder of hair products giant John Paul Mitchell Systems, bucked the conventional wisdom when he launched the Paul Mitchell line of hair-care products and decided to sell them solely to stylists and salons -- never to supermarkets or drug stores. Today, the company boasts more than $900 million in annual salon retail sales.
 
That unique system of distribution nurtured exceptional customer loyalty. The Paul Mitchell brand not only provided quality hair products for use in salons; it also created a new revenue stream for the stylists. Many of their own customers bought the shampoos and conditioners for use at home.
 
Sara Blakely, founder of Spanx, bucked conventional wisdom when she approached hosiery mills with the idea of manufacturing footless pantyhose. The product she envisioned was a body-shaping undergarment that would hide panty lines and firm up a woman's backside so she could wear her favorite slacks and open toe sandals with confidence. Blakely knew there was a market for such a product. But time and again, she was told footless panty hose was simply a bad idea. The mills were accustomed to making hosiery designed to improve the appearance of a woman's legs.
 
But, the Martins write, Blakely was trying to convince them to manufacture a product that was completely hidden under clothes. She got rejection after rejection. It's a good thing she persevered, though, until she finally found a willing mill in North Carolina. Today, Spanx's estimated retail sales are in the neighborhood of $350 million.
 
Spot a New Trend and Pounce
 
Often, a shift in cultural or economic trends will create new entrepreneurial opportunities. Sometimes that shift arises from advances in technology. Geek Squad founder Robert Stephens was paying attention to such trends when the home PC market exploded. He figured out that most PC owners had limited technical knowledge. If their hard drive crashed, they were thrown into a state of panic. But unplugging their PC and hauling it off to a repair shop, where it would stay for a week or so, wasn't an attractive option. Stephens spotted the trend, pounced and captured an emerging and underserved niche. Geek Squad made house calls.
 
When Stephens launched Geek Squad back in 1994, the college student had just $200 to invest in his business. But that same business eventually fetched millions in 2002 when he sold the business to Best Buy.
 
Andy and Rachel Berliner launched the Amy's Kitchen brand of organic vegetarian frozen meals because they realized that more and more Americans were trying to eat healthier diets, avoiding processed foods in favor of organic vegetables. Vegetarians themselves, the Berliners were also keenly aware that they'd have no formidable competition. They had personally sampled the frozen vegetarian meals already on the market and pronounced them terrible! The Berliners knew if they used quality ingredients and recipes, their business would thrive. Today, Amy's Kitchen generates annual revenues of $270 million.
 
The personal stories in this volume remind us of what is possible when you combine an inspired business idea with faith and tenacity. Remember, virtually every invention in the 19th and early 20th centuries, from the typewriter, to photography for everybody to the telephone and phonograph to mass produced, affordable automobiles came from the mind of an American (OK, a Scottish-born Canadian named Alexander Graham Bell in the case of the telephone!) who found a need and filled it.
 
About the Authors
 
Don Martin, raised in poverty in a small town in the Ohio Valley, over the next four decades he founded and built the largest privately held insurance brokerage in California: Cal-Surance. Ranked in the top fifty of insurance brokerages in the U.S., Cal-Surance generated over $200 million in annual revenue. Renee Martin was a dynamic real estate broker when she switched careers entirely, to work in community service. She became a rape counselor, a court-appointed special advocate for The Children’s Court (CASA), a director of community relations of a child abuse crisis center, and a public relations spokesperson for many community organizations. After publication of the book, she and Don coauthored, The Survival Guide for Women, she became a frequent and popular speaker at women’s seminars across the country.
 
The Martins also collaborated on TeamThink: Using the Sports Connection to Develop, Motivate, and Manage a Winning Business Team. They live in Palos Verdes, California.