How Redshift Sports Launched a New Business Around a Niche Product Solution, Debt-Free
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Entrepreneurship is a common goal for the highly-motivated. It allows you to work on your own time, toward your individual passions, solving problems for people using your unique skills and talent. Entrepreneurship, though, isn’t for everyone. Starting your own business takes a lot more than time, passion and talent –– you need business acumen.
Of course, business acumen comes in many different forms and you don’t necessarily need an MBA to prove you have it. In fact, often, all you really need is some common sense financial practices. For example, figuring out how to not go into debt opening up your own shop.
For online store Redshift Sports, this thought was the founding idea behind how three engineering co-workers would launch innovative, solution-oriented products for the cycling niche. Today, Redshift Sports has successfully launched two products via Kickstarter, both 100% unique to the market.
Original Kickstarter video
“Ultimately, for a small company that was just starting up, Kickstarter was an opportunity for us to assess the market” says Erik de Brun, co-founder of Redshift Sports. “It was an opportunity for us to reach a large group of people in a short amount of time. A traditional product launch within cycling or triathlon would require being able to get a certain amount of media attention, which for a small company, without a lot of industry connections, would have been something really hard to do.”
Generating demand is one thing. After all, in order to sell a product, you first need an audience. You also need a product, though. Traditional retailers often go about this process backward from how de Brun, Stephen Ahnert and Scott Poff, the three founders of Redshift Sports, approached it. Kickstarter was indeed a way to drive demand and gauge industry interest, but the team needed much more than just community support. They needed a product, but first, they need the cash flow to create it.
“We chose to use crowdfunding because we needed resources to help us with production,” says de Brun. “The funding enabled us to set up production the way we wanted to.”
And their strategy worked, 2.5x better than they expected it to, with 255 backers raising a total just short of $50,000. That’s when the team went to work on production. Before their Kickstarter launch, de Brun, Ahnert and Poff worked together at a product development consulting company they founded in 2008. Each worked with various companies in various business stages, helping them to get their products manufactured and ready to sell as cost-effectively and time-consciously as possible. Needless to say, the three-some have quite a bit of experience in product production and manufacturing. In fact, their experience in this area is what led them to launching a Kickstarter in 2012 to begin with.
Video of product testing performed
“We were lucky because we had lots of valuable experience with product development and production since we had been doing that kind of work for a while,” says de Brun. “We wanted to launch a product under our own brand and we had a lot of good ideas. We were all cyclists, and had some product ideas in that area so we thought why not work in an area that matched up with our interests both inside and outside of engineering.”
For the production of cycling parts, the team looked to both Taiwan, the center of cycling production, and to vendors local to them in Philadelphia. Redshift works with the same manufacturers as the more-established cycling brands –– ensuring their products meet the quality expectations of those in the cycling industry. Final assembly and packaging, though, is done in the Redshift warehouse in Philadelphia. This assembly process includes some refinements to the final product to ensure that de Brun, Ahnert and Poff’s innovative solutions work as intended.
“There is a lot of trial and error, which is par for the course with manufacturing. It takes a little while to get things working properly,” says de Brun. “What’s nice is we’ve gotten to the point where it is a pretty automatic process. Every order that comes through Bigcommerce goes straight to our inventory management and fulfillment tools. We’re able to check inventory and then process orders for shipping. A lot of the process is automated, and for a small company, it has to be like that. When we’re getting lots of orders each day, we can’t be individually processing things.”
So, with fulfillment automated and under control, the team focuses their efforts on expanding their business through awareness. Events are particularly useful for Redshift Sports, which allows them to network with the industry insiders who can help spread the word in impactful ways. This face-to-face interaction supplants the company’s need for advertisements. With selling such niche products, de Brun points out, knowing the right people is more important than drawing in large, top of funnel site traffic.
“We have focused a lot on identifying the key media sources within our industry. there is not a tremendously large number of big, reputable blogs or publications, so it’s not too hard to identify those high-impact publications and cultivate those relationships. We’ve been lucky enough to have editorial pieces and reviews written about our products in some of the high profile magazines.”
Like so many other small and midsize businesses, Redshift Sports has found B2B equally appealing as B2C. In fact, as the team looks to 2016, expanding their wholesale operations is a key initiative. Currently, about 100 retail stores carry the company’s products, and as that number expands, de Brun and team want to get to the point where their B2B operations are as automated as their fulfilment process.
“We’d like to have our dealers simply go to the site, login and then place wholesale orders,” says de Brun. “What’s nice is that the backend capabilities are there. Within the wholesale storefront, we can establish unique prices, unique bundling, and also the unique ability to have different shipping options, as well. We are using it now for a few customers, and we’ll be rolling it out to more of our dealers in the future.”
All right, all right –– so Redshift Sports has this successful entrepreneurship strategy all wrapped up and working well. But, just like any business, they have challenges, too. And while their national fulfillment process is seamless, this isn’t so true with their international audience, which is a large revenue driver for the company.
“International shipping and fulfillment is definitely a difficult area,” says de Brun. “We would like to automate our process more in the future so that we do not have to interact with each order as much.”
Currently, the 3-year-old company’s profit is in the green –– and their brand awareness and subsequently their sales are increasing. The team has proven that their business acumen is spot on, that you can indeed build demand before you ever have a product, and that staying true to your passion and your people can serve you well in the first few years of business.
What’s that famous stat about most startups failing after five year? That was never a possibility for Redshift –– and it all began with loyal backers and ample funding thanks to Kickstarter.
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