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Re: A moral question

  • Subject: Re: A moral question
  • From: "Andrew Lietzow" <alietzow@myfamily.com>
  • Date: 16 Mar 2004 08:15:39 -0700

Dear Hosta Open amigos, 

Dan, Chic, and Bill have all done an excellent job, IMO, of addressing Glen's original question about protecting the interests of Hosta hybridizers who wish to make a little money, or even a lot of money, from reselling their "personal" creations.   

My brief sojourn into and, at least for the near future, back out of, the Hosta resale business taught me a lot in a brief period of time.  I already knew a fair amount about business (with an MBA plus 16 years of small business ownership, which was much better than the MBA at giving me a degree from the "school of hard knocks"--THE SINGLE MOST valuable degree a SMALL business person can earn).  Unfortunately, I did not know a lot about the subtle differences that the NURSERY business provides.  I believe those are only learned while being IN the business.   

When we look at product life cycles, as applied to Hosta in particular, there are two cycles occurring simultaneously, and probably more.  The two readily evident ones are, 1) the market for Hostas in general, as a shade-tolerant perennial plant, and 2) the market for special flavors of this perennial.  In any market, once supply catches up with demand, and capacity to produce that supply develops significant excess capacity, the price for the product plummets.  All one needs to do is look at what micropropagation has done for supply and it's easy to understand why, for most varieties, Hosta growers and hybridizers are now pricetakers and not pricemakers.  The plant has become a commodity in most of its flavors.   

I believe what Bill is talking about, and certainly legitimately, is, "How does a Hybridizer, who invests years and years into producing something that is truly unique, do a little "price skimming" before the TC manufacturers take the plant into mass production and mega-sales through "price penetration"?"  This can only be done by controlling supply.  Hybridizers and resellers can do little to actually increase the demand (though what little can be done IS being done through advertising, garden tours, conventions, WOM, etc).    

Up until the late 80's, it was much easier for a hybridizer to control distribution because most plants were produced through vegatative propagation.   Limited supply created some astronomically high prices for rare cultivars and the "mystique" of the Hosta was reserved for the well-healed.  Probably 90% of the serious Hosta collectors were either wealthy or they became good at producing their own cultivars, or at trading, to avoid having to pay such high prices.  It was a wonderful time.  I got into the market just at the tail end of this "bubble".

Now that micropropagation is occurring in China, these "rare" plants can be mass produced PRIOR to their introduction.  Buyers are now more aware of the available supply (e.g. Choo-Choo-Train was introduced with in excess of 17,000 plants).  The available inventory from Shady Oaks has been published for years and now is readily available for all to see on the web.  Add to this the Hosta Finder and I believe we have identified the hybridizers two biggest enemies--more than adequate supply and relative ease of access to any limited supply.  

The market for Hostas is no longer local, or even regional.  It is national or even international.  Certainly the supply has gone global if not the demand.   When people know where to find rare plants, and there is some competition, the price adjusts accordingly.   Now that a goodly portion of the mystique is gone, a fair amount of the hybridizer's ability to "price skim" has disappeared with it.  

I think if Bill, and those many other hybridizers who, like myself, cannot cost justify spending the exorbitant amount of money to patent a plant would enter into a limited distribution agreement, reduced to writing, they MIGHT be able to control the supply, at least for a little while.  I think Mary Chastain did this recently with at least one distributor.  I don't know how well this worked out.  Unfortunately, other than patenting the plant, this is, IMO, the ONLY legitimate angle that a hybridizer can take with the market--controlling distribution through legally enforceable agreements.  

This is where Bill is right, IMO, that morals DO play a significant role in business.   Most legal agreements are only as good as the people who sign their names to them.   The cost of enforcing contracts is nearly as exorbitant as obtaining a patent because it involves lawyers.  What a business person really wants to do is work with people who honor their agreements and even that is very difficult.  Economics and issues beyond their control can affect ones ability to perform.  But to not reduce this to writing is truly a crap shoot.  I can't remember much of what I said yesterday, let alone a year or two ago!  To "hope" that people will somehow be altruistic in their business endeavors, guarding the business interests of others without being compensated for such protection? ... Bill, surely you jest.  

As Dan and Chic have so eloquently pointed out, it's not true that savvy business people who follow the laws are "crooks" even if the public perceives them to be in some intangible way.  People can't run businesses based on what others perceive to be the "moral high ground"--they must run them based on existing laws.   We ALL know customers who make unreasonable demands of sellers, and many of us know hybridizers who are just as cantakerous in making unreasonable requests on their intended, or unintended, distributors.   

The moral of the story is, "Business is war, and war is Hell" and, "if you can't stand the heat, get out of the kitchen".   I did the latter, at least for a time, not because of any pressures from customers--Lord knows there are gazillions of customers and I'm sure over 98% of my customers were very happy--but instead because of the ungodly number of hours one has to put into the business in order to work themselves up to even minimum wage.   70-80 hour work weeks during the season that translate to what one could make in just a few hours in other endeavors indicates either intense love (of the plant and the people who grow it), or a mild case of insanity.  

My conclusion was that if I was doing this for the love of the plant, then I could keep going, but if making a living was important, this path would require 5-10+ years of investment before the ball could get rolling well enough to call it a real business (one that generates profits).   

During all of the flurry of activity that occurs during the sales season, to take time to worry about hybridizers whining about somebody "stealing their plants" when they had not taken the steps to protect their own interests?-- I think Chic and Dan answered this quite well.  We all see the world through different colored glasses but their is only one REAL business world and that is the one that is controlled by laws, not by supposedly shared morals.  

If hybridizers want to protect a revenue stream, they must either patent their plants or reduce to writing their expectations for distribution control.  Otherwise, they are fighting a battle they cannot win.    It's not the nature of business to protect those who are not savvy (about how to achieve even a modicum of a chance at winning the war).  

Ciao, 
Andrew 
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