Discovering a great business is something, but finding a great business owner is something else entirely. I am pretty sure that you can count the number of comic book shops that have been in business for almost four decades on one hand (maybe even one finger!) and if that is a rare breed, Joe Ferrara of Atlantis Fantasyworld in Santa Cruz is rarer still.
I spent my morning trying to find a coffee shop to work in that had the right combination of vibe and great coffee, driving all over Santa Cruz and walking in and out of at least six coffee shops (there is a whole other story to write in just this sentence.) I was wandering around downtown Santa Cruz like a zombie, until I found myself in front of Atlantis Fantasyworld. This is not The Simpson’s comic book store—it’s bright inside, high ceilings, signage above the sections and, oh yeah, every book is cover out, not stacked in bins, so you can see every piece of artwork. Everything about Atlantis feels intentional and then you meet Joe and begin to understand that every detail has been thought about, curated and iterated over the last 38 years.
“It started as a hobby,” says Joe, of his opening the store in 1976. That hobby took him through the 1989 Loma Prieta earthquake, three years in a temporary tent while they rebuilt and then into his new location, 22 years ago. Atlantis Fantasyworld sports the only logo ever commissioned and drawn for a comic book store by the great Neal Adams, and they even filmed part of The Lost Boys in his original location. As cool as the store is, I actually sat down to write about what really fascinated me about my conversation with Joe—what can you learn about business from doing it for forty years.
In a previous life, I built an ecommerce platform specifically to help businesses like Joe’s be more profitable. I’ve worked with hundreds of Main Street retailers and what I found is most small businesses started out of a passion, not out of a desire to create a great business—often, they are head-down and operating under the idea that if they just keep selling, they’ll survive. Pretty early on, Joe decided that he better figure out how to be a businessman, and I am positive that is the primary reason why he is still around.
Here is a distillation of what can only be described as a masters class in retail, in conversational form.
Know the real game
The things you are selling don’t really matter, they are primarily a means to some other end that you’ll never really understand. Stuff is easy to come by and can be bought anywhere, there are millions of tools, apps and practices to do almost anything, and anything can be replaced.
What are you really selling? Yourself, your ethos, an experience, and often a sense of community. Joe shared a number of stories about experiences with customers over the years that shaped his business practices that can really be boiled down to this:
treat your loyal customers extra special because they come back and tell others. Treat new customers like loyal customers because they may have heard how awesome you were from a loyal customer and thus have high expectations. Treat bad customers like loyal customers because if you make them happy, even if they never come back, they will tell others how awesome you are.
The biggest job
Joe gave me a little quiz and asked, “In this whole store, what do you think my biggest job is?”
I quickly responded, “Managing inventory risk.”
He nodded, as though I threw a great curveball that was just a bit outside and then pointed to the two young women behind the counter, “You want to talk about managing risk, I have to leave them with my store and get eight hours of great work out of them!”
He went on to talk about how making sure that his employees felt good, confident in their knowledge of the store and empowered to operate the business. That’s what makes it all work. If you go back up to “Knowing the game”, your team also needs to be able to sell you (maybe even better than you do), your ethos, the experience you want your customers to have and make them feel like they are a part of the community they are selling.
Adapt or die
Forty years of a singular perspective on the evolution of a business vertical like comic books is something I could geek out on for a week. At least. Think of it this way, Joe opened Atlantis Fantasyworld in 1976 and the next year, as he put it, “The gods gave us Star Wars.” Not only did George Lucas change filmmaking, like Henry Ford and Steve Jobs, he single-handedly changed the economy, the ripples of which we are still feeling and Joe still experiences in his shop. Star Wars made science fiction and fantasy mainstream and with the revolutionary merchandising, branching of stories into products and products into stories—everything we experience today in entertainment is still riffing off of George’s strategy.
Collectible comics were once the bread and butter of a comic book store’s revenue, today it is almost entirely graphic novels and the new, weekly comic selection. Everything else—the collectibles, the merchandise, toys, games, posters, and other things are long tail, and all together make up less than a quarter of his revenue. And while the online market puts a bit of a wrench in the comic book market, Joe said the creation of the graphic novel has had the biggest impact on sales. The previously issue-driven industry can now release a series, then collect it into a graphic novel and sell it in every bookstore, distributor and online venue.
The ability to absorb changes in the market, understand how they relate to your customer and react intelligently to them quickly in your business is the difference between being open and closing up shop. Joe related a story about how he turned the release of The Death of Superman in 1992 into an opportunity to get people to come visit his soon-to-open location after three years of operating out of a tent after the earthquake. As a result, he reopened his shop to a line of people down the street.
Perhaps the best point to understand about how businesses evolve and what they need from us as owners is how Joe summed it up, “Our greatest enemy is our own inertia.”
Know your stuff
I have a fascination with how businesses manage inventory risk and how that effects their approach to merchandising—bookstores, along with comic book shops and record stores have the toughest go, because the product coverage per square foot is huge. Go take a look at a small bookstore, with most of their products spine out, even a small shop can have 20,000 products on their shelves, representing over $100,000 of real money. With all that risk in play at any given time, knowing the real sales, cost and inventory data of your shop is vital.
Joe showed me a spreadsheet he created and shares with other comic book shops he has mentored over the years that calculates and breaks out his weekly costs and sales and then projects out what he will need at any given point to reach his goals for the month. This granular view allows him to always see what his cash is doing as well as his money tied up in inventory, and how that relates to his bills and overhead costs.
“That is your life, right there.” I said.
Joe responded, “You are exactly right.”
The more data you have, on as many facets of your business as you can get, the more you can plan and adjust for growth and health, instead of react and respond for survival.
Always Be Learning
Joe pulls out a well-read copy of “Customer Loyalty: How to earn it. How to keep it.” and says, “have you read this?”. I haven’t, but he went on to explain how he got just a little ways into the book and called a company meeting to discuss how to better serve their customers. A few minutes after that, he calls out to one of his employees, “We need to make a sign for the door for the double Atlantis dollar days to put out every Monday!” referring to their in-house loyalty program. Joe looks back at me, “It took 26 years to realize that the only way people knew about our double dollar day is the tiny print on the actual dollars, and we should put a sign out on Mondays.”
When my partner and I were building our small business ecommerce platform, we used to say that we were trying to suck a little less every day. It was a bit of a joke, but it really is what we are all trying to do—evolution, not revolution. It was amazing to see the results of that approach on a business that has lived it for thirty-eight years. When you walk into Atlantis Fantasyworld, I guarantee that you will feel it. Joe’s shop is a well-honed expression of the harmony of passion and business and the real return is immeasurable—the impact on the community, the other businesses and students he’s mentored, the values he models for his employees, and on and on.
I walked up to the counter and put down a copy of Deadman, a compendium of a comic book series from the late sixties. The young woman at the register says, “Did you know this is Joe’s favorite comic?”
“That’s why I’m buying it.”
There aren’t baseball cards to collect for the entrepreneurs we admire, but we can participate in the experience they create and take a piece of the ethos with us.