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Key Idea: Be Willing to Evolve

Steve Hoffman's company, Modern Postcard, is the result of decades of continuous improvement.  Steve started in business as a company of one and today he has hundreds of employees and thousands of customers.   More on Staying Power ...   More wisdom from Steve...

Key Question:


When we think of innovation our minds go first to gizmos and gadgets, steel and plastic, or chips and wires. It is true that new products are fun to use and so many become part of our daily routine. The flat panel monitors, for example, looked so sleek and stylish when we first installed them; now it is a standard. The big boxes that hogged our desk tops are going out. However, many companies exist because they sell a service, not a product.

  What is the best way for a small business owner to roll out a new service?

A:  You ask your customers what they need and want or you observe your customers closely then suggest how you can help them solve a problem you detect.

Most of the business owners we meet say, "The idea for a business is less than 2% of the result." So much of the work of business is devoted to sales and marketing -- as much as 80% in some industries. If you already have a customer and can provide additional products or services then your total cost of selling is reduced.

Medallion Funding started loaning money to men who wanted to buy a taxi in New York City. Medallion knew the taxi business inside out because the founder started in business for himself by purchasing a taxi then eventually owned 1,000 taxis! Therefore, rolling out financial services to taxi drivers had minimal risk to Medallion.

The key to expanding into new businesses is integration. Horizontal integration -- Medallion really excels at it -- is providing new goods or services, outside of the core business, to an existing market of the business. Vertical integration, another effective way of expanding the revenue base and bottom line profits of a business, occurs when a company ventures into a new part of the supply chain that the business is already part of.

For example, a manufacturer with an established product and distributor network might decide to open a retail location and sell directly to the consumer.

In this episode we mentioned that the marriage counseling once done in person by Dr. Neil Clark Warren is now available on the web; printing services to real estate agents have evolved into printing of high quality post cards at; and Eric Rose now monitors the homes he builds via the web.

Think about it

What changes are you making now to prepare for the next five years? How do you prepare for change or even figure out what changes are needed? What are your assets and how can you use them to increase sales to current customers or to find new customers?

Clip from: Staying Power

Key Questions about business: What makes a business work?  Why do some make it while so many fail?  And, in the USA, why are there so many business start-ups every year?  How does a business make it beyond the first year? ...third year? ...and fifth year? These are benchmarks. Milestones. Most startups do not get past them.

So, when these veteran entrepreneurs answer the question, "How did you do it?," there is a lot to learn.

This television special outlines the common qualities found in companies that make profits for decades.

Go to all the key ideas and video of this episode...
Go to the homepage for this episode...

Modern Postcard, Inc.

Steve Hoffman, CEO

1675 Faraday
Carlsbad, CA 92008

Visit our web site:

Office: 7604317084

Business Classification:
Printing, publishing

Year Founded: 1996

Be Willing to Evolve

HATTIE: Number 9. A Willingness to Evolve

Steve Hoffman started in business printing quality photos for the real estate industry. He's still printing quality photos but you can see for yourself he has evolved!

STEVE HOFFMAN (Founder and Owner, Modern Postcard): (Voiceover) Fortunately we started with technology first. When we went to Modern Postcard, the only way that we could do it was to have everything internal be digitized. Everything was digital from the very beginning with Modern Postcard.

HATTIE: (Voiceover) Steve Hoffman is founder and owner of Modern Postcard. He has 250 employees who produce over 100 million postcards a year for some 150,000 customers.

STEVE: Yes, 1993...

HATTIE: You said, `We're going out there. We're not staying with old stuff. We're going forward.'

STEVE: If you're going to get 32 images on a plate, how do you get that? The key things with color is it has to be in a register, and the color has to be good. And the only way you can do that is through digital technology. We solved the problems back in 1993, '94 in terms of doing that. And so internally, we had a completely digital work flow. Now it's a question of, `How do we take people's information and stuff from the outside inside,' because we already knew where the landmines were.

HATTIE: (Voiceover) At their website, Modern Postcard's customers are invited into the digital workflow. Choose build online. Stock artwork is provided, or you can send in your own photos and artwork. No constraints, optimization all the way. Write your copy. Submit the card and pay with your credit card. And, you can email your mailing list so that you never lift another finger until you receive your own copy in the mail.

STEVE: Well, first of all, we made a pact not to ever do postcards.

HATTIE: Who's we?

STEVE: Jim Toya-Brown, my vice president, my wife...

HATTIE: She worked for the company then?

STEVE: She was actually one of our real estate photographers. And we were driving up to go skiing, and I said, `You know'--we were just talking about business, and I said, `You know, I think that we could probably do postcards just by taking a sheet of paper and cutting it into four sheets of paper basically.' And they said, `No, absolutely not. I don't want to have anything to do something that inexpensive.' And they basically promised me to drop the whole subject of postcards.

HATTIE: They felt it was demeaning?

STEVE: Well, we were heading more towards larger brochures and more quality and going the other direction. I kept trying to bring it down to what people could afford. If we apply the technology of the day towards that, we could actually produce something that the market would respond to.

HATTIE: (Voiceover) Jim Toya-Brown came to work with Steve in 1986. He's senior vice president, part owner, friend and confidant.

JIM TOYA-BROWN: I mean, I've always been driven to work hard, you know. And whether it's mine or someone else's company, I mean, I've always put 110 percent. I mean, that sounds kind of cliche, but, you know, I've just always put that effort into it. And let me tell you something. It was not a pretty sight in the first couple years. I mean...

STEVE: The company basically started in a one-bedroom apartment.

HATTIE: And this is your one-bedroom apartment?


HATTIE: In January, 1976?

STEVE: 1976. And all I was, I was a photographer. And my claim to fame was that I was doing something that would normally cost $60 to take a very nice architectural photograph of a real estate building, and I would do it for $10 as opposed to $60.


STEVE: In doing that, it was easy for me to capture as much market share as possible. And as I captured more market share, I found out that you can build in the efficiencies within your system.

HATTIE: Are you telling me that in this one-bedroom apartment, you were actually thinking market share?

STEVE: I was actually thinking market share.

HATTIE: (Voiceover) From 1976 until 1993, Steve worked to perfect processes, to serve the core customer, real estate agents. When a recession hit and real estate suffered, Steve and Jim agreed, they needed to find a new customer to serve.

STEVE: Actually, I was probably not the strongest believer in the postcards, 'cause It was a lot of work. And we were used to getting in work from professionals, professional photographers, then we would get the quality. When you take in work from amateurs...

HATTIE: Like me.

STEVE: ...they send in one-hour photo prints and want you to reproduce it. And sometimes, you get transparencies that are way overexposed, underexposed, off-color. And our philosophy back then was garbage in, garbage out, and there wasn't the technology to solve the problem economically. Color separation was very expensive, very time consuming. And fortunately Photoshop was the newest application on the block, but it ran on the Macintosh, which totally choked on an 8 megabyte file. But Silicon Graphics had one. Just the timing of everything--like within months of when Photoshop came out on Silicon Graphics, we had it on our machine, and lo and behold, we could take a photograph and change the color and edit it to our press needs, and we were off and running at that point. But that took about four to five months, and it was about a solid year before we said, `Postcards is the right way to go.'

HATTIE: And you had how many employees then?

STEVE: Sixteen.

HATTIE: Sixteen.

STEVE: Yeah.

HATTIE: So, really, the postcard product is what catapulted the company?

STEVE: Yes, absolutely.

(Voiceover) One of the key things that I heard, I think it was, in a book a long time ago was that everybody wants to get to heaven, but nobody wants to die to get there. That's one of the key things that I've always felt was that from day one with my business was I didn't care about, you know, the number of hours. I didn't care about the effort. I was there to build an organization, to grow it and serve my customers and my employees. I love it. I love it.

HATTIE: These nine qualities needed for success over the long haul are hard but not impossible.

Good luck. We'll see you next time.

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