You Did What !!?? Starting a New Snowboard Brand

We all remember the uncounted brands that died when these market conditions started to emerge. What’s changed? Something? Or maybe nothing, and the people starting the brands have decided they’d rather have a good time losing their money in snowboarding instead of losing it in the stock market and not having any fun.

Like the stock market, the time to get involved is often when everybody else is fleeing into the night. It’s at least possible that the market conditions that make it look like the worst possible time to start a brand actually make it the best.

The argument would go something like this. There are a group of smaller (or at least non chain) snowboard retailers who are, above all, snowboard shops. They need a product that everybody else doesn’t have. There are a group of snowboarders for whom snowboarding is important. That is, it’s still part of their lifestyle, they think of themselves as snowboarders and they aren’t interested in just buying what’s on sale. Maybe that group isn’t as large as it use to be, but it’s still there and it’s still big.

To succeed as snowboard shops, those retailers need a product that everybody else doesn’t have, that has roots in snowboarding, that offers them a margin they can live with and the high probability of selling it at that margin. The customer they are looking to serve also wants something everybody else doesn’t have that confirms their deeper interest in and commitment to snowboarding. The new brands, the argument goes, provide a way for these retailers and these snowboarder to do some business together based on a common need and interest. It’s niche marketing.

The downside for these new brands is that success may mean fairly slow growth and staying pretty small (Option and Never Summer are the pioneers in recognizing and implementing this strategy over many years). In fact, if they tried to grow too fast, they’d lose the market advantage they have over the large players. They can succeed because they don’t have to compete on price and don’t have to run a huge advertising and promotion program that’s required to reach the mass market.

Hell of a theory. The counter argument is that even if everything I said above is accurate, the business may still not make financial sense. You’re may be paying more for decks and other products than larger companies. Slow growth is fine, but how long can you afford to lose money while you’re true to the market strategy. At the end of the day, can you get big enough quickly enough to provide a reasonable return on investment? Maybe even for “core” shops, the terms, prices, and support they get from the big guys is just to compelling to leave much room for new, small brands.

I guess I know which side of the theory the guys at the new brands will come down on.

Josh Reid, along with Paul Maravetz the founders of Rome Snowboards, takes a philosophical approach to building the Rome brand. No, no, no, he’s not getting marketing ideas from reading Plato’s Republic (Didn’t somebody already do that and name their brand Atlantis?). But he believes that snowboarding continues to be “rooted in the counterculture,” if not to the same extent it was ten years ago and that as a result the “philosophical aspects of the brand are more important than in other industries.”

What he means is that there are still a lot of committed snowboarder who see their choice of snowboarding as more than a sport and the equipment they purchase as more than getting the best deal on what they need to participate in that “sport.”  Those people are Rome’s target customer.

Well, so far it seems to be working. The brand came out two months before Vegas- not necessarily the best timing to attract dealers for the coming season. Still, they’ve got around two hundred dealers in North America and, both last season and this season are getting requests for more product from dealers who have been surprised by demand.

Mike Arbogast, at Mountain Riders in Stratton, says there’s lots of buzz about Rome. He doesn’t know exactly why- maybe the kids are just looking for something different. Mike would probably agree with Josh’s comment about the counterculture. According to Mike, “Every kid who comes through with a Grenade sweatshirt is looking for a Rome hat [“sex, drugs, and snowboarding”] to top it off.”

It’s telling that Mountain Riders carries only four brands total. They’ve cut back on the two large ones to make room for more Rome and Allian. They’ve dropped a third large brand this year season.

By design, Rome has chosen not to meet the requests for more product. They built to orders for this season. Dealers may be disappointed at not being able to meet demand, but hopefully they’ll console themselves with good sell through at full margin and remember to order more next preseason.

In the long term, that’s probably good marketing for Rome, but it also reflects financial realism, something was often sadly lacking in the snowboard feeding frenzy of seven or eight years ago.

Rome’s on track to be profitable in the next year or two. They could have shown a financial profit the first year but decided, correctly I think, that there were some required expenses that had to be made consistent with the brand strategy.

Allian is practically an old timer among the new post consolidation brands. Their first season was 2000-2001. “It’s run and owned by people who stand on top of 100 foot cliffs and jump off them for no good reason,” is how Sales Manager John Stanos puts it. “We’ve had enough head injuries that maybe we can see a little clearer. It’s not complicated. It’s just snowboarding.”

Allian has a target market of the kids who spend a hundred days on the mountain. They are in about a 175 shops in North America and have about 20 distributors world wide. They only make what they can sell, and they try not to spend money they don’t have. The company expects to be self sustaining financially this year.

There’s a certain relaxed attitude and flexibility that I see as contributing to their success. They see their shops, reps and riders as partners. Sure they want to grow, but they don’t want shops to take product they can’t sell. Of course the reps have a sales budget, but it’s doing what’s right for the brand that’s important. “If there are five shops in town, we should only be in one right now,” says Stanos.

Boardsports in Eugene, Oregon is an Allian dealer and Jon Faulkner is one of the owners. They started looking at new, smaller brands a couple of years because the distribution of the usual brands was getting so huge, and because they don’t carry any ski brands of snowboards. John said they liked Allian right away because, “It was new, it was local, and the boards rode great for how basic they were- the company wasn’t based on hype or design or team.

What strikes me and is that the first dealer I called described the brand to me in essentially the same way Allian Sales Manager John Stanos did. It’s not about hype and craziness like it was the first time around. It’s just about snowboarding. If Allian can maintain that connection between its brand and its dealers, it should do great.

Rome was a bit more formal in describing its business model. Given the owner’s background, that’s not too much of a surprise. But both brands have much the same strategy and market concept.

They’re both rider driven. But that doesn’t mean just team riders like it use to mean, but serious snowboarders in general. That’s both brands’ target market. They both want to grow, but not at all costs. The brand’s positioning has to be maintained. They know the mistakes other brands have made, and are going to make building a snowboard brand a lot more fun by not making them.

They won’t spend money they don’t have, make product they can’t sell, or try to be “the next Burton.” It may be snowboarding and it should be fun, but it has to be good business. There’s a sense of realism that didn’t exist in a lot of brands that aren’t around any more.

That’s a good model for success.