IF YOU HAVE A CONSUMER PRODUCT STARTUP, DON'T WASTE YOUR TIME AND MONEY. LEARN WHAT HAS WORKED SO YOU CAN APPLY IT TO YOUR COMPANY.
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When you meet the founder of a start-up and the enthusiasm for their business just rolls off of them in waves, you can’t help but to feel some level of excitement with them, even if this business is not in a category or segment that you have an interest. This start-up makes custom downhill and backcountry skis and since I am a skier, this company captured my interest. This article gives a brief profile of this company relative to its value proposition and differentiating features from other ski manufacturers and why I think it has a chance to do well. It sums up by providing a simple and elegant way to figuring out how to succeed in a business that this company seems to have done correctly.
I do not know much about the product manufacturing side of the ski industry. I do know that it is structured in a relatively traditional manner like other consumer product industries, where you have the traditional large brand manufacturers that produce skis and ship them to retail channels for sale to the public. Then, you have smaller niche manufacturers that make custom skis for individuals. I have bought skis (downhill and X-C) at major retailers, once at a large consumer ski trade show, and my absolute best set of skis, which are worth more than their weight in gold, were purchased used from a former European national-level skier who used them in racing. I have never considered purchasing custom-made skis due to the cost.
This start-up produces custom skis at a cost that is much less; this is the companies first value proposition and a well-know strategy for any competitor to capture customers. However, pinning your strategy on a cheaper product is not always the best long-term solution, as competitors will generally figure out how to catch up to you by getting costs down to match your pricing. Usually, the larger the company, the more leverage they have in driving down costs, so they stand a better chance at winning the price game. The companies second value proposition is a small one, but still a differentiation, which is to use more sustainable materials to produce skis. Again, competitors might just copy that, too.
The third value proposition is something that I think could give the company a nice edge that is much harder to emulate by competitors. The company wants to set up a retail location where it will also maintain its ski production line so that customers can select the materials, with guidance from the company staff, and the skis would be produced on site. The companies fourth value proposition is to provide additional level of service by meeting with potential buyers at front-range Colorado-based ski resorts to watch how they ski so that they can help the buyers make more informed choices about ski materials and type.
I like these two ideas – a retail location and on-slope analysis – because they might be sustainable competitive advantages that are hard for others to emulate. The cost-benefit for a larger competitor to emulate this probably does not make sense because they have to sell volume and having a few of their own retail locations would barely register as a blip on the revenue side. Even if small competitors emulate this, the market is probably big enough to support several companies in one geographic location (Denver-metro area in Colorado). But, when you include the other key value propositions of lower cost and sustainable materials, this company may be able to remain unique in the marketplace.
It’s important to point out that what this company is doing is creating a unique buying experience for a more cost-conscious buyer who does not want to spend more than $1000 for a set of skis (or a lot less, like me). The customer is included in the process of the development and production of their skis, including an analysis of their own ski style to influence the outcome. Creating a unique and positive experience like this for the customer is a very powerful driver in generating sales for consumer products and cementing your brand for repeat and word-of-mouth sales.
Here is a final key takeaway. In this article, I have written about things like value propositions, customer experience and competitive advantage – strategic and very business-level analysis. The founder of this company did not intentionally approach his business from a strategic perspective, yet, he has zeroed in on his key success factors. What’s his secret? It’s the same secret that I have seen in lots of small start-ups whose prospects look very promising; through almost 2-decades of being a skier and in the industry, the founder has come to know the market and has observed the customer pain and has taken his experience and observations to craft solutions that solve this pain. A simple and elegant way to figuring out a business, don’t you think?
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