One issue we’ve been discussing for a while as a team is how to price our kites. In small production batches, each kite will cost us around ~$500 including shipping. Kites sell anywhere from $800-$1500. However, many kite companies offer their products at severely discounted rates or bundle them with lessons or other products. A strategy some of the smaller kite companies we talked to employ, is giving lessons then offering a “pro discount.” People like to feel like they are getting a deal, so setting a higher price point initially with the intention to aggressively discount may be good strategy to just get the product out there. Especially as a new company, we are going to need to add some incentives to get people to go Engine.
To test our pricing and wind sensor hypothesis, I walked around Crissy Fields and Ocean Beach for a while chatting with as many kite surfers as I could find. Grand total of 13. 100% indicated interest in getting up-to date wind conditions at their favorite beaches, so good stuff there. While I couldn’t get anyone to agree to buy one of the kites on the spot, I did get email addresses from 10 people and overall there seemed to be some genuine interest. People said they didn’t want to commit to purchasing without seeing the product and maybe a review or two first, fair enough. I started off telling people the kite was $1000 bucks, and while no one’s jaw dropped many people asked if they could get a discount for agreeing to purchase an untested product. Basically, it seems like setting the 1k price with the option to discount and then bundling our product with other services like free lessons and repairs should be our initial strategy.
Kitesurfers at Ocean Beach
We’ve covered a lot of ground in the past few weeks and our fourth prototype is nearly complete. This has caused the unsettling (but exciting) realization that we better start trying to actually sell these kites. We’ve discussed some of our demand generation strategies, but it appears that offering free 1hr lessons is the most attractive hook. With barely any marketing effort we’ve had over 70 people share their emails and express interest in free lessons. From our conversations with other kite lesson providers we know that the conversion rate for paid lessons is about ~75%. While we would certainly expect a lower rate, even a 20-30% conversion would cover our first batch of kites. This assumes they choose to buy Engine brand, but again our conversations with over 50 kite surfers have indicated that instructor recommendation is a huge factor in the buying habits of new kiters.
We see our website with wind conditions as a way to maintain this customer base and keep them involved in our company. If/when we gain momentum and establish some brand credibility we will phase out the free lessons for paid ones and also hope to divert traffic to the website rather than direct sales in an effort to scale. That’s longer term though, for now we are playing scrappy and trying to survive.
As a sidenote: kiteboarder, VC and Angel investor and founder of MaiTai Kite Camp, Bill Tai has agreed to meet with us. Hope to gain some insight from his experience.
Kite surfing schools are developing new ways to capture business from beginning kiters. To make the sport more accessible, San Francisco based company Kite The Bay was recently featured in this San Francisco Chronicle article for developing a new approach to teaching beginning kite surfing techniques.
Kite the Bay now uses a support boat and a KitePole to enable students to concentrate on achieving the proper body and board balance on the water’s surface.
From what I could see from their website, Kite The Bay focuses on teaching and not so much on selling equipment. It’s nice to see that other companies recognize the opportunity of introducing people to the sport.
Out just today! This article talks about the recent push to get Kiteboarding in the 2016 Olympic Sailing Competition. Getting the sport into the Olympics would really increase awareness to this growing sport, creating opportunities for companies like ours to introduce new enthusiasts to their first kiting lesson!
The format would include the following:
Course Racing: Standard windward/leeward courses with and without gates, and with the option for trapezoid course setup
Short Track: A short windward/leeward course with a reaching start, where sailors start in groups of which only the best advance into the next round. Americas Cop-Style racing
Slalom: A downwind slalom course with the focus on speed and equipment handling rather than on tactics. Similar to Snowboard/Skicross in the Olympic Games
Enduro: A combination of a short upwind course and a downwind slalom, with multiple laps and mandatory jumps
The more we think about it, the more we believe getting current wind condition data for our site is a great way to generate some traffic. In addition to researching what hardware is best, we’ve been reaching out to the property owners at the beaches we identified as kitesurfing hotspots to see if they’d be open to letting us put a wind sensor on their property. The private property owners have been enthusiastic about it, and we are waiting to hear back from the park service about putting sensors on state land. We are imagining a simple wind sensor hooked up to a Sprint smartphone and maybe a small solar panel, which can then transmit the data to our PC. It’s gotta be a Sprint smartphone because all the public parks have Sprint radio towers so we’ll be sure to get service. We are still figuring out the set-up, but will report back once it’s nailed down.
In researching other surf condition and forecasting sites, we came across some great data on Surfline. Surfline is the largest water sports media company in the world, reaching over 1.7 million unique users every month. They feature high-demand surfing editorial content, video content, as well us surf forecasting and current surf conditions. While we don’t intend to become the next surfline, there is not an equivalent site for kitesurfing and we have confirmed through our interviews that the demand for current wind conditions is very real. We also were able to get some great demographic data from surfline, summarized below:
- 92% of user are male
- 93% of users surf at least once a week
- 51% snowboard
- 53% skateboard regularly
- 26 is the average users age
- $68,000 is the average income of users
- 55% are active gamers
This is pretty powerful information that will help inform our marketing strategy. In particular, it is a nice confirmation of our hypothesis that there is potential for high converstion from snowboarders to kitesurfers, since many already surf. Surfline has 120 thousand daily unique users that average 9 minutes on the site and visit an average of 8.8 pages.
I tend to doubt that, but it is promising for our market growth. This article also is helpful in listing out some great contacts for us!
Kiteboarding is the New Golf
IP is important to consider for our company because our product has a unique and differentiating feature. Using private networks, we were able to speak with 7 Patent Attorneys for guidance on the topic. Some highlights from our conversations:
- We filed a provisional patent for our design last year. This protects only the date of our filing (which means no one can claim to have invented the product after this date) but is not enough to product the product in any other way. We require a full patent for more thorough legal protection.
- The full patent needs to be filed within 1 year of filing the patent application, the process can take a upwards of a few months. It is extremely advised that the process be completed with a an experienced IP attorney, particularly since this is key to our product
- Ideally, the patent should cover all aspects of the invented technology, as well as cover many other possible adaptations of the original technology. If anyone else has tried to make an adjustable kite, we need to show why we are different from “prior art”
- Execution of the patent with an IP attorney is expensive, the cost is approximate $8,000 – 30,000
- It is easy to get a patent, it is not easy to get a patent that is defendable and worth having
- On International Patents: by filing int he US, you canuse US patent as the priority for the filing in other countries. Still, there are different requirements for different countries. We should identify which countries are most likely to take this idea and be sure to file there (for example, there is a big kitesurfing industry in Australia)
- How we file our patent may also depend on whether we are trying to build a company or whether we just want to sell our idea to a big international company–in the latter case, our biggest assest is patent and we would need to have international patents
- On Partnering with an Existing Brand: it’s ok to start these discussions with just a provisional patent application but the sooner we get a real patent the better. And if we decide to partner with a big company, we need our own attorney
- Non-disclosure Agreements may be useful when pitching our idea to potential partners
- There is no reason to wait to file the full patent, we should start filing the patent as soon as possible!
It has been a great week so far, with much of our work going into product development. We had another test run with Prototype III, no glitches and handles beautifully. We are still waiting, however, for some stronger winds so we can really stress test it. Prototype IV is also coming along, probably about another week in the works. As the product matures, we are thinking more and more about how best to grow and retain our customer base and have had an exciting mini-pivot in this area.
Unlike surfing, there is not currently a “go-to” site for kitesurfing conditions and forecasts. In order to retain customers and generate interest we intend to create a website that will provide updates on the latest wind conditions. Wind conditions are monitored by wind sensors, which are just little pieces of hardware that can be attached to any stationary, permanent object in an exposed location by a beach. Data transmits either via radio or cable to a computer that forwards data to a site. The set-up itself looks relatively straightforward, with most sensors costing in the $100-200 range. We will focus, initially, on just the bay area installing wind sensors at the most popular kite surfing beaches. The Cliff House at Ocean Beach, Swanton Berry Farm by Scott’s Creek, etc. We are still figuring out the exact costs and set-up requirements for the wind sensors, but it is pretty basic technology.
This would be a HUGE draw and a great way to capture eyeballs if we could get bay area kiters to be using our site for all their forecasting needs. There are several other sites that offer wind sensor data, but they require a paid subscription and are not user friendly. We would want to incorporate other elements into the site to expand the user experience, ranging from kite surf news updates to a social platform where people can upload pictures of themselves kiting. A mockup and example site flow we created are displayed below. We have a lot more work and research to do on this concept, but it’s a pretty exciting idea for us. As an example of site that has been successful in the surfing world, check out surfline.com. We have a preliminary site hosted HERE until we can set-up the real deal.