Tylor Garland spent 15 years as a freelance designer, using his skills to give companies the look they wanted for their products. But he wasn’t getting a share when his skills led to their success.
So he started Boombang LLC, a boutique firm that has designed 250 products, ranging from toys and shoes to electronics and medical supplies. Together, these products have generated retail sales of more than $1 billion. And now he gets a percentage of revenues from many of the products Boombang creates.
“We wanted to put together deals that put our interests in line with our clients,” said Garland. “When you come to the table with design solutions and your client knows your success depends on their success, they talk to you like a partner, not an adviser.”
Garland also allows employees to participate in a profit-sharing fund. In an industry with high turnover, the arrangement has stabilized the company’s talent pool a major consideration given that Boombang has only 20 employees.
“It’s a different business model, but it’s actually a good way for all parties to participate,” said Christin Hartsfield, product manager at Ace, a division of Newell Rubbermaid Inc. in Atlanta, which hired Boombang to relaunch its classic black pocket comb.
The simple grooming accessory hadn’t changed much since its introduction in 1924. Boombang’s assignment was to make a comb that fit into the contemporary men’s market. Garland’s company came up with about 100 concepts, of which 14 successfully jumped over the manufacturing and marketing hurdles to arrive in stores.
Under the partnerships between Boombang and its clients, Garland and his designers look at the entire process, from market research to in-store advertising.
Typically, a client comes to Boombang with a few pieces of a puzzle perhaps a study on economic trends, or a retailer who sees the need for a certain product, or some extra capacity at a factory. The client expects Boombang to fill in the missing pieces.
While the company still occasionally does traditional fee-for-service deals, it prefers not to act as what Garland calls a “SWAT team,” coming in for just the product-engineering phase. In a Boombang partnership deal, the designers get much more involved, particularly with manufacturing logistics.
“We went to Asia with Tylor and one his engineers for two weeks to get the products right,” Hartsfield said. “We met with six vendors and probably made 15 revisions to products while we were there. Luckily, Tylor is very hairy, very American, and perfect for testing men’s grooming products.”
In another sector, Boombang designed the Disney Mix Stick, MP3 players that have sold 8 million units. In order to maximize sales and profits, the designers used manufacturing technology from the automotive industry that allowed Disney to decorate the gadgets with graphics of its top properties, from Hannah Montana to “Pirates of the Caribbean.”
There have been glitches, however.
Boombang once developed a bicycle seat made with mesh fabric. It won numerous design awards, including one from Fortune magazine in its “Best Products of the Year” issue. But sales were disappointing.
“We expected it to sell well, and it didn’t,” Garland said. “A light bulb went off in my head. I thought, product design is great but the communication and advertising has to be just as creative.”
Since then the company has hired a creative director from an ad agency to make sure that side of the business is strong, too.
Finding partners
Greg Foster, principal in the Chicago design firm Product Council, said the royalty model for designers is a relatively new
business arrangement. For small design shops, it presents an immediate challenge in cash flow since payments don’t arrive until months or years after the work would normally be billed.
For the longer term, a customer can tie up a good design by not moving quickly.
“They could sit on it and not produce the product,” Foster said. “At the same time, they keep us from producing it ourselves or with some other partner. We’ve seen it happen, so you need to protect yourself with a commitment of upfront money.”
Under Garland’s contracts, though, the company negotiates for cash plus royalties. Also, the partnership model puts him in a strong negotiating position.
“They say they want innovation, but oftentimes they want predictability,” he said. “We are empathetic as to what the risks are for them. Then we bring in research that gives context to their decision-making.”
Garland sees the outlook as positive. The jump in oil prices has prompted companies to seek new designs that use less plastic, rubber or other petroleum-based materials. At the same time, the aesthetics and market performance of Apple Inc.’s iPod have highlighted the importance of design.
Large corporations find themselves at a disadvantage in this environment. The next step in Boombang’s development will be creating subsidiary companies. They will manufacture and distribute specific product lines designed by the parent company. Garland then plans to sell these subsidiaries to strategic corporate buyers.
“Ultimately, there’s more money in selling businesses than in selling products,” he said. “We will recruit managers to run these businesses and brands that we create in-house. If you have good management and product innovation, that’s an attractive proposition for these larger companies.”
Boombang LLC
Headquarter:
West Los Angeles
Founded:
2003
Core Business:
Designs products for large manufacturers and distributors on a royalty basis
Employees in 2008:
20 (up from 15 in 2007)
Goal:
To create subsidiary companies that manufacture products lines, with an eye toward selling the subsidiaries to large
corporations
Driving Force:
The need for companies to reduce production costs by simplifying designs, while keeping the look of the product attractive enough to drive sales
