Report by Marc Nager, Managing Director, Telluride Venture Accelerator
As we gear up for TVA's 2017 program, we'll be attending several conferences related to our focus areas to help build relationships with key players and uncover promising founders that we might be able to help through our resources and programs at TVA. This report is really an internal report we wanted to make public from our trip to Outdoor Retailer Summer Market 2016 in Salt Lake City. We hope it will be valuable to share with startups, investors, and stakeholders alike!
Goals of the trip:
- Support 5 companies with Telluride ties present at Outdoor Retailer: Western Rise, Hyperlite, Froodles, The Dyrt, and Sol Paddle Boards.
- Recruit potential companies for the 2017 TVA program.
- Test the idea of doing a TVA program solely focused on the outdoor industry.
- Attended Outdoor Retailer Conference Showroom Floor: Having spent most of my career in tech & startups, this was similar to CES in some ways. With what felt like thousands of booths, it can be quite overwhelming.
- OR's Venture Out: Similar to CES's Eureka Park and SXSW's Startup Village, OR has created a space for the young up-and-coming companies to showcase. This was where we found more of our people and the type of companies we personally we're drawn to. In fact, Western Rise was one of the top brands in this section at OR Summer Market 2015, so we knew this was where to spend the most time.
- PitchFest: Put on by Camber (formerly Outdoor Industries Woman's Coalition), eight founders pitched their companies including TVA's very own Sarah Smith from The Dyrt.
- Western Rise & Huckberry Private Party: Will and Kelly from Western Rise, recent graduates of TVA, invited us to a private party full of many of the big names from the industry. To say it was packed was an understatement. The brands from Venture Out all seem to stick together and we saw many of the same folks at the party.
- Scott McGuire from Mountain Labs in Mammoth Lakes. Scott helped create and run Venture Out at OR, and he's been to OR for dozens of years. Scott is truly one of the industry insiders and is passionate about helping progress the startup and entrepreneurial approach to the industry and for mountain towns like Mammoth and Telluride. Turns out we discussed an idea and are now co-hosting Mountain Venture Summit together in early 2017.
- Maile Buker, TVA mentor and outdoor industry veteran. Mailie was crucial to having a productive trip. If you ever attend OR as a noob to the industry like us, you need to find someone like her to really make the most out of the experience. She knew all of the CEOs of the biggest brands, and a lot of the more disruptive and up and coming brands as well.
- Robb Kunz, who runs BoomStartup, an accelerator in Salt Lake City and a VC firm among other things. I've known Robb for years from my Startup Weekend days, and he is well respected in the startup world. They are experimenting with models in the accelerator that are relevant to any non Tier 1 cities, such as no Demo Days, rolling admissions, and flexible capital. There is a huge growth in the startup scene in SLC and Robb will prove a good friend and ally for any startups going through TVA and Telluride Angels.
- Kristin Carpenter-Ogden from Verde PR and also a TVA mentor. Kristen is another industry veteran who helped us get our passes to OR. If you're a company in the outdoor space, she's someone you should know.
Fun Companies we met:
- Grayl: It felt like there were hundreds of filters at OR. This one stood out. From branding to packaging to a friendly team, they are a brand to watch.
- Rumpl Blankets: Think down jacket, and then turn what you're picturing into a blanket. Fun take on a something we all need and use in the outdoor lifestyle.
- Tenkara Rod Co: Bringing flyfishing back to its roots and making it accessible to the masses. I recently got into fly fishing and had purchased one of their rods without knowing who they were. Great to get to meet some of their team.
- Fayettechill: Friends of Will from Western Rise, we got in touch with Mo after the event. Another company with a great product that is bridging mass market appeal with a firm grounding in the outdoor world.
Insights & Takeaways:
- The outdoor industry is highly competitive, and not very welcoming. Coming from the tech world, it was a very different feel even from when we first got started. There seemed to be a not-so-permeable membrane, and if you're an insider, great. If not, good luck. Good news, we have access to a lot of insides. But it means it's very tough for startups in the space.
- There is still very much an owner/employee relationship at even the young companies we saw vs. what we're used to with startup teams. Many of the employees we spoke with couldn't describe company performance/challenges/opportunities with much level of detail and generally referred us to the "owner" when we asked some of the more typical business questions to understand how they were doing and if we might be able to help them.
- There is a very real need and opportunity for financing companies in this space. Talked to one company with a booth at OR offering loans of $50k-$5M at 2-5% PER MONTH who was doing well from the outside at least. However, the offerings we saw felt a little dodgy and reminiscent of payday loan type marketing. We asked a number of companies if financing was a challenge for their business and almost 100% said yes. Most companies are either putting their house and personal assets on the line as collateral to get funds and some were lucky enough to be friends and family funded. Revenue loan type products would do well in this industry for new entrants.
- Seems hard to define "innovation" in the outdoor industry. Unlike many other industries, tech is necessarily the disrupting factor. Here it seems more to do with new product lines, the right timing, and right connections vs. true innovation. However, there is definitely a clear move away from traditional retail model and the trend is towards direct to consumer. This was a regular topic of conversation, especially in the Venture Out space.
- If TVA did pursue a single focus on outdoors, it's a hard industry to help create high paying, sustainable jobs. Given the competitive nature of the industry, it's hard to move the needle on things like social mobility and median income unless you're working with really break-out brands. That said, there are clearly some trying to be more disruptive like Western Rise and Tankara.
- Talking with over a dozen "upcoming companies" and folks like Mialie and Scott, Western Rise truly is a favorite in the industry right now. Their brand, their product, and people just like them as humans. Their approach with their 2017 line is spot-on with the largest macro trend and their products are top notch.
- Companies: We met about 10 great companies that we look forward to following up with over the next few months to see if we can help.
- TVA ultimately should aim to help 1-2 companies a year from the space but not move towards an exclusive focus on the outdoor industry for two reasons: first, the market is just too competitive and disruption too hard to define, and second, our mentor network is just too diverse in Telluride. We have a top notch mentor network in the space, but it doesn't do justice to wealth of experience we have access to nor to the variety of companies that we could help.
Keep an eye out for future trip reports and an inside look at what we're up to at TVA!