In an effort to explore how we can expand our market we took a look at how some other dedicated entrepreneurs have gone from producing a niche product to running large, successful business. Thanks to our teams network of contacts we have been able to interview the former CEO of Espirit, the founder of Northface and the founder of Patagonia. We have also extensively researched several proxy businesses including Under Amour, Hurley and Burton.
The conversations and research has been fruitful. In almost every case these business have built their brand around a few niche products, established a reputation among a certain customer segment, and then expanded their offering. Patagonia is the classic example, initially producing handmade rock climbing equipment they are now an icon and leader in the outdoor apparel industry.
Founder Yvon Chouinard started off making high quality rock climbing tools for himself and friends. While the equipment received excellent reviews from the climbing industry, he could barely make a living.
However, Yvon was in the habit of wearing rugby jersey’s imported from Europe, as the tough garments were able to withstand the wear and tear of climbing. Soon friends began to ask Yvon where they could get jersey’s so he started importing in bulk and selling to friends. While the business was still defined by the climbing equipment he started making all of his money off the jerseys. Yvon recognized that his customers were interested in more than just climbing equipment. He found customers resonated with his commitment to quality, durability and so began to attract even non-climbing customers. People would buy Patagonia because they wanted to be part of the lifestyle and values it represented. The same is true of Hurley, in 1995 “Hurley and his group realized that the modern surfer also loved fashion, skate, snow, music and art” and similar stories are true for the other businesses we interviewed and researched.
Our hypothesis is that through focusing on building one core product very well, we can establish brand credibility to support new product lines. Thus far, no kite surfing company has made a concentrated effort to enter the apparel market but this is certainly something we would want to evaluate if we are able to successfully get our product off the ground (no pun intended). It’s difficult to estimate what the serviceable market size is, however, the U.S. surfing market boasted $6.24 billion in retail sales in 2010. The graphic below represents how we imagine expanding beyond just the extreme sports equipment market.