It's true!  We just launched our new website and business. Here’s a quick review:

Common Craft is now a video subscription service. You or your organization can become a Common Craft member and have your own online library of all current and future Common Craft videos for use in classrooms and on the web.

Membership features include:

• Instant access - your own growing library of Common Craft videos
• Sharing tools - easily embed, display or download any video
• Worry-free membership - no extra fees for features or views
• Influence - suggest and vote on future video titles
• First crack - be the first to see and show new video titles
• Premium content - access members-only resources
• Mobile - Web-based videos play on mobile devices
• Languages - Most videos are available with voice-overs in 8 languages

• Info, facts and figures
• Embedding options for “The Common Craft Way” video
• Images for blog posts
• Our press release
• Key pages on the new site

For a couple of years now, through our work with videos, I’ve realized that licensing is an often neglected business model.  Not only is a potential revenue source, it’s a way to work with people in a positive and permission-based manner.

Patrick O’Keefe, author of Managing Online Forums, recently wrote a post that got me thinking.  It’s called “Rethinking the Cease and Desist - Don’t Threaten Fan Communities and Groups - License Your Brand to Them.”  Patrick is a professional community manager and has a lot of real-world experience in dealing with fan communities - and I think he’s 100% right.

I believe I have the solution. You have to control your trademark. You also don’t want to abuse your vibrant fan base. You feel you are between a rock and a hard place. The solution? License your brand to the site and/or it’s proprietors.
Provide them with a license allowing them to do what they are already doing.

Let’s take a step back and talk about the issue at-hand.  If you own a trademark, like “Common Craft” you must protect it.  If you don’t, you could lose the ability to protect it in the future.  For this reason, you have to be proactive. Unfortunately, enforcing a trademark can be messy.

If you’re a major brand, you have lawyers who are constantly scouring the web for people who use the trademark in illegal ways.  For instance, if I used the Coca-Cola logo to advertise my new drink, they would surely send me a nice letter.

For small companies, it’s sometimes not so simple.  While enforcing your trademark is your duty, you have the real potential of ruining the goodwill you’ve built among your customers and fans by handling the situation in a clumsy way.  

There are the obvious cases where an organization is clearly trying to create confusion by using your trademark to promote their own products.  This is an easy one - a cease-and-desist is often the only thing that will cause them to stop.

Most often though, the person or company violating the trademark (for example, using your logo without permission) does not have bad intentions. They are a fan who wants to use the trademark to help you - not take business from you.  This is a simple case of awareness.  They either didn’t know it was trademarked, or didn’t understand the basics of trademark law.  It’s these cases that are the hardest because a cease-and-desist will seem misplaced.

This is where licensing comes in.  As I’ve written before, licensing is the business of permission. You have the right to control your intellectual property, whether it’s your words, music, videos, logos, etc. and licensing is how that control is often managed. Trademark is a tool that makes licensing possible - they give you legal authority to control what you own.  

So, to Patrick’s point, what seems like a trademark violation may be a business opportunity, or a way to have a formal, productive relationship with fans.  

Let’s say one of your fans wants to start a blog about your brand.  Without asking, they grab a logo from the web and start a blog, maybe with the name of your company in the URL.  You notice it and realize that they are violating your trademark. The problem is confusion: people may confused their site with your site. Avoiding this confusion is part of why trademarks are important. Consumers need confidence that they are dealing with the genuine article. So, if you feel it's a risk, you have a choice. One is to stop them with a cease-and-desist, which will feel harsh to one of your biggest fans.  Another option is to go them and say something like:  

“Hey, I saw your blog and I’d love to see it continue.  As you may know, I own the trademark for the logo and title your using.  I’d like to work with you to keep using them, but I need to make sure that it’s clear who owns it.  For this reason, I’d like to license it to you.  This way, you have my explicit permission to use it and we can work together on how it’s used in the future.  I’ve attached a simple document that outlines how the relationship works.”

This is a more productive way to manage this situation.  There are a number of benefits:
    1.    You protect your trademark
    2.    You create a formal relationship with a big fan
    3.    You have the opportunity to make this a business

Every situation is different, but think about #3 above. Permission doesn’t have to come with a fee, but often it does.  You could easily say that using the logo (for example) costs X amount per year.  Before you know it, you’re making passive income based on your intellectual property -  and that’s a good business to be in.

Final Note:

Of course, we are not lawyers. If you have questions about trademark law, please talk to an attorney.  Here are a couple of links about trademark and trademark infringement:

http://en.wikipedia.org/wiki/Trademark_infringement

http://www.copylaw.com/new_articles/trademrk.html

Not everyone knows, but Common Craft is a two-person, home-based business. We're 100% independent, with zero employees or investors. While we work with specialists by contract, everything that Common Craft does comes from us and impacts only us. This has been our goal since 2006 when Sachi and I started working together and today, we're starting to really understand what it means to be a two person "couple company."

It's not all unicorns and rainbows. Along with our important video-making duties, I am one of two people in the customer support department. Sachi is our head bookkeeper. There's no one else to answer the phone, run errands or follow up on a question. We spend valuable time on things that could easily be done by others, which surely impacts our productivity. But, we are connected directly to our customers.

Work is a constant part of our lives. Business happens over dinner, on walks and off-hours. We don't ever really get away. Instead, we've learned ways to streamline our work, even when we're supposed to be traveling or on vacation. 

Perhaps most importantly, our business is difficult to scale with two people. When headcount is a constraint, fewer business models make sense. So we have to find what works for us. 

These are obviously self-imposed limits and I'm sure most business people would say that we're missing opportunities. It's true, being small means passing on many opportunities and focusing on ones that fit for us. But it also means new perspectives, perspectives that don't make as much sense outside of a couple company.  

Think for a minute about how decisions are made in many businesses. Money is obviously the driving force, which is directly connected to investor and shareholder interests. Business leaders make hard decisions every day, ones focused on increasing the health of the business. Of course, this is responsible and rational behavior.

But what if there is another perspective, one that is unique to companies like Common Craft? What if, along with money and business health, a driving force of every decision is happiness among the founders? This is how we've learned to operate - our happiness as a home-based unit is perhaps the most important thing for our business and something directly connected to long-term financial success. When we look at opportunities, we ask ourselves - will this make us happy? If this opportunity comes to fruition, will we still be able to live the life we want to live? 

Of course, it's not just happiness. This is really a strategy to prevent its evil twin, unhappiness, from rearing its head. Unhappiness, in the context of a married couple's work together, is poison. Business success wouldn't matter if we stopped enjoying our life together.

So we've been very deliberate about how we run Common Craft. We don't have employees because we don't want an HR department. Instead, we've found a business model (video licensing) that scales without employees.  We don't have an office because we love being at home and have made it our best possible workspace. We can be very low-overhead, agile and lightweight with two people. We've never required outside investment, and I think we're better for it. Investors aren't likely to enjoy a return based on our happiness. We are happily independent. 

In the end, we're designing a business that fits with our goals as a married couple. By erring on the side of happiness, we can grow in ways that create a successful business, but also ensure that we don't lose control of our day-to-day lives. And with these things in place, we hopefully have a solid formula for sustainable creativity.

Of course, things change and Common Craft may become something different down the road.  But what will always be in the front of our minds is the idea that we have a choice. Every business is different and just because your "supposed-to" do something doesn't mean you have to do it. We all have a choice, and for us the important question is - will this make us happy?

For more posts like this, see our Being Small category.

Through going to conferences and talking with people about Common Craft, it's apparent that people have no idea how Common Craft could be a successful business.  From their perspective, they can watch the videos for free, so how does it work?

I want to answer this question because I think it's important context for understanding why we make the decisions we do.

In business terms, we are a "B2B" company, which means business-to-business. We make videos that are focused on helping businesses, schools, and other organizations accomplish their goals. These customers buy the licensed, high quality versions of our videos to educate employees, students, and website visitors. Our revenue comes from organizations and individuals who want the better versions, but also the permission that comes with licensing.

Now let's talk about the alternative: B2C or business-to-consumer.  Being B2C means making products for use by everyday people.  In which case, we might charge for viewing a Common Craft video, perhaps through a membership service or pay-per-view.  Our revenue would come from individuals who pay to watch and learn from our videos. We decided not to be a B2C company.

Here's one way to look at why this makes sense: In the B2C model, it's more difficult to build brand awareness. Only paying customers would see the videos. We decided early-on that we would give our products to consumers via sites like YouTube to help spread the word.  These versions of the videos would educate, but also have ads for Common Craft.  Over millions of views, this helped build brand awareness and lots of links to our website.  A percentage of these viewers might think "Man, I love that video, but I need a version that's more appropriate for the workplace" or "I'd love to show this in my presentation, but I need a downloadable file." These needs illustrate demand on the B2B side that comes as a result of giving our products to consumers.

Our challenge is to find ways to continue to provide free videos to consumers while increasing the awareness and demand for the licensed versions for workplace/professional use. From this perspective, I hope you'll see why we're making videos on things like Insurance. Our focus is not making something cool for You Tube, it's making something valuable for individuals and organizations with specific goals.
 
A note on custom videos: Making custom videos is a part of the Common Craft business model, but is not our focus and more easily understood than licensing. This article on Read Write Web explains our move away from custom work.