Ulla Engeström

Crafter Economics

This column was published in the first issue of CRAFT. I wrote it earlier this spring.

In the Long Tail, Wired’s Chris Anderson wrote “The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.” I’ve been wondering how the economics change when exchange moves further down the tail from manufactured products to crafts.

When I post a picture of a self-made laptop sleeve on my weblog, does that mean that my laptop sleeve is now “on the market”? Many of us would probably say that the answer depends on whether I offer to sell my sleeve for a price. Well, let’s assume I do not, but then a stranger emails me offering to swap it for something she has made. And when my friends see my creation, it inspires them to make their own versions that inspire yet more crafters. Some sell theirs on Etsy.

In this story, the self-made laptop sleeve on my blog is clearly part of some system of exchange. Still, it seems that in this system of makers, users, buyers, and sellers, the idea of the market is broader than classical economics would have it. We are used to thinking that

• profit motivates exchange;
• exchange is based on money;
• price is determined by supply and demand; and
• demand can be purchased (stimulated through marketing).

But my goal wasn’t to profit; money did not always change hands; there was no need to negotiate a price except on Etsy; and nothing was spent on marketing.

If we still want to call this system a market, we need to update the definition of the term.

First, learning, recognition, and reciprocity motivate crafter exchange at least as much as economic profit. The American Craft & Hobby Association reports that only 15 % of crafters claim an interest in selling their creations*. The rest have other reasons for making things.

Second, barter and conversation are more important modes of exchange to crafters than monetary transactions. I impart bits of my know-how in exchange for your recognition and advice. I may also swap my laptop sleeve for something that you have made. To sell my laptop sleeve for money is just one option among others.

Third, links determine the crafter-value of an object. Crafters value objects that can teach them something new. A product rich with stories about its origin, maker, materials, and techniques of manufacture, is infinitely more interesting than a product without a history. For a crafter, a product without links is a dead product.

Lastly, crafter demand shows as recognition, not just purchases. Recognition depends more on recommendations than marketing dollars spent on media space. Companies who have dabbled in purchasing recommendations will keep burning their fingers.

So is there a different crafter economics? I think there is, and the crafter exchange logic is moving up the tail to manufactured goods. Witness the growing preference for customized fashion, cars, and electronics. In America, the size of the craft & hobby industry has risen by 50%, from USD 20 billion in 2000 to USD 29 billion in 2004*. Although money doesn’t move crafters, crafters are moving increasing amounts of money.

* Source: Craft and Hobby Association Attitude & Usage Study 2005 (not free - non-members need to pay). Get it here.

CRAFT for all of us

O'Reilly's new CRAFT magazine is a boundary crosser. Unlike traditional crafts periodicals that limit themselves to knitting and sewing, CRAFT combines soft craft and hard craft in fascinating ways. As one of the columnists, I had the opportunity to get to know the people behind the venturous publication. Congratulations Carla, Arwen, Goli, Natalie, Shawn, and everyone who did such an amazing job to make CRAFT happen.

On Design and Craft

Bea Correa from mindwhatyouwear dropped me a question: "what is the difference between design and craft?". This is a great topic for a longer article, and certainly many conversations have touched on it over the years.

The first thing that comes to my mind is the history of these terms. As we discussed earlier here on HobbyPrincess, 'craft' is typically linked with handcraft, hand made, something that is made by human hands from start to finish. 'Design' as a concept emerged in the late 19th century and as a professional institution in the beginning of the 20th centrury. From the beginning it was developed to serve the needs of the industry. Design as a term also implies separation from manufacturing: Products had to be "designed" before they could move to the production line. This means that a design product can be easily machine-manufactured and serially produced – something that a craft product typically cannot.

Design, more than craft, is often associated with certain aesthetic norms, which determine what is good design and what is not. These norms, like fashion, change over time and are (to a degree) controlled by professional institutions. Craft, in my opinion, emerges more out of individual and local aesthetic ideals reflecting the personality of the maker.

Many well-known designers base their work on traditional craft. For instance, here in Finland almost all the great names who went on to win gold in the Milan Triennale during the 'golden age' of Finnish design in the period from the 1930s to the 1950s had high respect for the use of original materials and traditional handcraft. Some excelled in craft skills themselves.

...

Here are Wikipedia's definitions of design and craft.

Two talks in Oslo

A guest lecture at AHO kindly organized by Timo Arnall.

Play, Craft and Digital Life: Emerging Directions in Professional Design
12.10.2006, 1:00-2:00pm, Oslo School of Architecture and Design

This presentation discusses future directions in professional design by challenging the current conceptions of production and consumption. The main indication is that organisations that wish to innovate and foster creativity need to conceive products that exist simultaneously both in physical and online form, make designers play with users, and support crafting and voluntary development outside businesses.

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A presentation with Matt Biddulph at NordiCHI Near Field Interaction workshop organized by Timo Arnall, Julian Bleecker, and Nicolas Nova.

Designing Social Affordances for Physical Objects
14.10.2006, Oslo School of Architecture and Design

This presentation focuses on annotating physical objects with contextual information from the viewpoints of affordance theory (Gibson 1979) and practical design of “Internet middleware”. Our starting point is the notion that linking user-generated meanings to everyday objects equips physical artifacts with new types of affordances, which we call here as social affordances (Kreijns &Kirschner 2001). These social affordances differ from the notion of perceived physical affordances (Norman 1988) in three essential aspects. First, instead of functional, their nature is principally social/socializing (Adler 2001). Second, instead of being defined by designers, social affordances are primarily defined by users. Third, unlike physical affordances, social affordances are historically accumulative; the more people annotate the same object, the richer its affordances become.

Trying out 'object cards' to help blogging about design

I collaborated with Helsinki Design Week to encourage people to blog about design. We chose ten young designers and thinglinked their products. We also created special "object cards", business cards for products, that were handed out at the exhibition. The card contains a photo of the product, the thinglink as well as the contact information of the designer/manufacturer.

When objects have an identity online, people can link to them. That to me seems like the prerequisite for enabling discussion about new design. When we make it easier for bloggers to point at design objects, we make it easier for everyone to learn about design. And connect objects and designers to other objects and designers.

See a list of featured products at the Helsinki Design Week exhibiton.

Consumers want new skills

Charlie Schick pointed me to this excellent report on "Status Skills" by trendwatching.com. Here are some quotes from the report that link well with Crafter Manifesto.

The phrase STATUS SKILLS originated in the gaming world. From videogameoutfitter.com: “Unlike Battle Skills which are used more for offensive attacks during battle, Tactical Skills and Status Skills are more like support skills your characters can attain. Although these skills are not used directly against your enemy they are a vital part of your character's development and can effect the outcome of certain battle. (...)

In economies that increasingly depend on (and thus value) creative thinking and acting, well-known status symbols tied to owning and consuming goods and services will find worthy competition from 'STATUS SKILLS': those skills that consumers are mastering to make the most of those same goods and services, bringing them status by being good at something, and the story telling that comes with it.

Note: this is *not* an anti-business trend. It still relies on a dominantly capitalist system, in which consumption remains important, yet is partly replaced by another highly valued, status-providing activity: mastering skills. Which opens entirely new markets for both providers of skills, and those skillful consumers who may become competing producers of (niche) goods and services. (...)

Now, consumers can acquire as many skills as they want, but equally important is the showing-off aspect of what they've learned and created. Don’t forget: without ‘the others’ seeing, tasting, hearing or smelling your skills, without the inevitable story-telling, there shall not be any status coming thy way! Some of this showing off is best done in the company of family and friends, garnering recognition from those who are closest and who matter most. But other creations are just dying to be flaunted to strangers, to the entire world, to give their creators a status fix that's more in tune with today's obsession with instant celebrity. In that light, the incredible numbers behind Wikipedia, blogging software, Lulu.com, PureVolume, YouTube and Flickr are not at all surprising. We’re now all skilled encyclopedia editors, writers, musicians, directors, photographers, and we want to share the fruits of our labour with a responsive audience. Lesson learned: don't just figure out how you can help your customers improve their skills, but also give them an intimate or worldwide outlet to show and tell and brag.

MOO is a new kind of printing business

One of the most interesting new ventures, MOO has just launched their new web site, where people can turn their virtual content into beautiful print products. Congratulations to Richard Moross, Stefan Magdalinski, and the whole MOO team! The site is fun, stylish, and easy to use. I also use MOO cards!

Crafter Manifesto in Dutch

Nadya Peek (an amazing woman who deserves to be introduced properly in another blog post) has translated Crafter Manifesto into Dutch. Here it is:

1. Mensen krijgen meer tevredenheid uit de mogelijkheid om zelf dingen te vervaardigen omdat ze zichzelf kunnen herkennen in de voorwerpen die ze maken. Dat is niet mogelijk met gekochte goederen.
2. De dingen die mensen zelf maken hebben magische krachten. Ze hebben verborgen betekenissen die anderen niet kunnen zien.
3. De dingen die ze maken willen ze meestal houden en vernieuwen. Craften is niet tegen consumptie, het is tegen weggooien.
4. Mensen zoeken erkenning voor de dingen die ze gemaakt hebben. Die erkenning komt ten eerste van hun vrienden en familie. Dat manifesteert zich in een economie van cadeaus.
5. Mensen die oprecht geloven dat ze gave dingen aan het vervaardigen zijn zoeken meer zichtbaarheid voor hun werk. Dit creëert mogelijkheden voor alternatieve werk kanalen.
6. Werk inspireert werk. Het zien van werk van anderen genereert nieuwe ideeën en ontwerpen.
7. Essentieel voor het craften is gereedschap dat toegankelijk is, draagbaar en makkelijk aan te leren.
8. Materialen worden belangrijker. Kennis van waar ze van gemaakt zijn en waar ze te verkrijgen zijn wordt essentieel.
9. Recepten worden belangrijker. De mogelijkheid om interessante recepten te creëren en distribueren zal waardevol zijn.
10. Leren brengt mensen samen. Dit creëert online en offline groeperingen van beoefening.
11. Craft-georienteerde mensen zoeken mogelijkheden om interessante dingen te ontdekken en hun makers te ontmoeten. Dit creëert nieuwe markten.
12. Tenslotte is craften een vorm van spelen.

References to Arts & Crafts in North America

Jeff Ubois from archival.tv pointed me out two significant figures in the Arts & Crafts movement in North America. One is Elbert Hubbard, a soap salesman that turned into a philosopher, writer and publisher, who instituted the William Morris Arts and Crafts Movement in East Aurora in 1895. Hubbard disliked mass produced, machine-made articles, the "mad onrush of modernism", and made the opposite, art and handicraft, as his business.

The other is Charles Keeler, the author of The Simple Home, which was a key essay in the creation of many of the west's most beautiful neighborhoods, and to the development of American Arts and Crafts, Art Deco and Modernist design. Keeler was also a founding member of the Berkeley Hillside Club, something that Jeff is now interested in reviving.

Posted on Glimmer

How Small Can Beat the Big

Platform 21 asked me to write a column for their Positive Alarm project, which reframes negatives as positives by means of art and design. Here is my text, slightly self-promotional in the end:

How Small Beats the Big

For the past eight years I have worked with decision makers, technology companies, and design-promoting organisations. No matter how different each party’s point of view is, they all share one common belief: it’s not good to be small. If you are small, you should try to become big.

Smallness is a no-no in design for several reasons. First, small-scale activity is linked with small-scale productivity: higher unit costs result in lower profit margins. Second, boutiqueness does not scale. For example, a retail chain cannot sell products by local designers, because the volume of an individual designer is not big enough. Third, small brands disappear in big media. There is little money to be spent on advertising, and the press typically casts its spotlight on the bigger players.

Poor productivity, scalability and visibility have become political issues in the design sector. Consequently, various actions to get from small to big have been initiated. Consultants have been hired to study what keeps small design firms from growing, universities have devised new courses to teach designers entrepreneurial skills, and governments have offered young designers grants for business development and internationalisation.

Yet something is not working. Studies of the arts and crafts sector report that most designers and crafters don’t expand their businesses, because their first goal is not to scale up production. Design entrepreneurs prefer a smaller scale, because it keeps them in control of their own work and in touch with their customers.

Although small designers don’t interest the mass media, they can be well known to an international niche audience online. This suggests that small size and low public visibility might not really be such sins for designers and crafters. In the current networked markets, on the contrary, they may be strengths. Small is trendy because it is different from the mass-produced. Small is high-involvement because it is rare and invites discovery. Small is valuable because it is genuine and intimate. It connects people with people, not companies.

On the Web, services like Amazon, eBay, and Etsy aggregate the small. Their logic is that when put together, the small is bigger than the big. What’s more, personal recommendations are taking the place of traditional marketing. The statement of The Cluetrain Manifesto that markets are conversations is turning out to be true.

To participate in the emerging online recommendation-based markets, small designers and producers need unique identifiers for their products. My project, Thinglink, is a free product code for creative work that can be used to point to unique objects on the Web. Together with peer-to-peer recommendations, we can connect the online to physical objects and build a way for the small and the distributed to outdo the big and the centralised.

Links:

Seth Godin: Small Is the New Big

Ulla-Maaria Mutanen: The Crafter Manifesto

Chris Anderson: The Long Tail

Tom Coates: The Age of Point-at-Things

Further reading:
Schumacher: Small Is Beautiful: Economics As If People Mattered. Hartley & Marks Publishers, 1973.

Locke, Levine, Searls & Weinberger: The Cluetrain Manifesto: The End of Business as Usual. Perseus Books, 2001.