We have decided to shut down the business. Thanks for your support and understanding.
Regretfully, we are announcing today that the business will be closing as of midnight on June 30th, 2013. All existing orders will be honored provided that company representatives can get ahold of those customers who have not provided pictures or customer approval. Pending orders will be fulfilled in two weeks from closing regardless of customer approval and final items will be produced and shipped during the week of the 15th of July. More information will be provided in the blog post as to why this decision was made. Thanks for everyone's support and understanding!
Well, it has been over a year when I decided to start this venture. Unfortunately it hasn't taken off and I can't continue to fund this out of my pocket. So, with a heavy heart I decided to shut down operations and liquidate assets (which mostly consist of the 3D printing equipment). Since I am actively trying to sell it that means I really can't take on new orders past the 30th while I am pursuing the sale.
I'd like to give you a little more context as to how I came to this decision.
I started this business as an idea I had when going to Rice for my MBA. By the way, I'm Phillip Leech (President/CEO, entrepreneur, engineer, crazy person, etc...). You see, I thought that this idea would take off or at least become a sustainable business (meaning not losing money) after a year or so (or at least on an upward trajectory). What I didn't fully grasp was how much a startup business truly costs. Sure, there are a lot of hidden costs and surprise expenses that crawl out of the woodwork. However, it's not just the dollars but how much time you have to devote to the business and how little time you get to spend with family and friends (i.e. you don't own the business - the business owns you). When you are trying to get your business off the ground there is just no room for sick days or time off (and you can forget about vacations). To get a business going, you have to call in or ask for a lot of favors in the hope that it all will pay off in the end. Sometimes wish you didn't have to ask for those favors but you are infinitely grateful that you got the help when you did. I had a sense of how much it would take to do this before jumping in, but all of the advice and warnings you get don't fully prepare you for how difficult it can be.
People have asked me why I don't try to continue running the business in a part-time, limited fashion. I had worked on this business full-time until recently. My reply would simply be the question - would you pay money to work 60 to 80 hours a week indefinitely? My intention was to not pay myself for a year so that the business could get off the ground. It did not. And I had to make the hard decision to shut down otherwise I could not continue to keep the business afloat and not live in a box under a bridge with my wife and kids. Finally, I feel that part-time effort yields part-time results and if I can't make it successful working on it full-time then how could part-time possibly be more successful?
There are some people that have asked why I didn't seek outside funding either through loans or investment. In the final analysis, this business had some flaws at its core that could not simply be taken care of by additional funding. For instance, when a customer comes to a business or website entitled 'Action Figure Labs' they somewhat expect that this business would sell action figures. However, this is not the case. What we sold were custom figurines made of a plaster-like material and not made of plastic. Additionally, these figures were not meant to be toys but rather novelty items for customers to display and not play with. Again, this was another mental disconnect in the mind of the consumer.
At this point you might be thinking that the business problem was a simple matter of marketing. Unfortunately, problems such as these are multifaceted, they involve not just one aspect of the business, and are not simply the domain of marketing alone. Please allow me to explain.
The original thought for the product was do a custom head on a base plastic body, and then allow for customers to mix and match heads with bodies. However, there were already competitors with similar product offerings such as dolls (e.g. Barbie-esque) or off-the-shelf action figures with the head removed and replaced with a 3D printed custom head. I wanted to ensure that the product was sufficiently differentiated enough from the competition. Thus, I decided that the entire figure would be 3D printed so that the customer could have more freedom to customize it and make it truly unique. This decision increased the material cost of the product and made producing the product more difficult.
You may be asking yourself at this point why producing the product would be more difficult. I had mentioned before that the 3D printed material was plaster-based. This plaster gets built up in the 3D printer layer by minute layer. However, it is very fragile and requires the utmost care when removing it from the build area. In order to harden it for normal handling, you have to dip it in an epoxy bath. Prior to that process, you also have to de-powder it to remove the excess powder using compressed air. If that doesn't sound difficult enough, the real difficulty lies in the fact that you have to lightly sand the figure to even out the color distribution as well. This means taking a small piece of sandpaper on a stick or with your fingers to sand any color bleed or discolorations from the top layer of plaster. Keep in mind that this is a small 3 or 5 inch figure that has little hands, fingers, or other fragile features jutting out at odd angles from the figurine. One mistake and it could trash the entire figure at this point. I have boxes full of broken figurines and each represents $$ wasted.
At this point, hopefully you could see how frustrating this business ending up being despite my early hopes and aspirations. I have learned quite a lot (it was a very expensive lesson). At this point, I still feel that the idea of using 3D printing for custom action figures is sound, but the technology to do it correctly is not there yet. You really need a full color 3D printer that prints in multiple colors of plastic simultaneously in order to achieve the potential that the idea represents. Also, the material costs and labor associated with preparing the figure have to be low as well. Until then, it just won't be a successful business.
Please feel free to contact me a email@example.com if you have questions or comments (I still have the domain name reserved).
Thanks for your understanding and support!
(soon to be former) President & CEO