Newer brand Outdoor Tech has been growing like crazy in the past few years with its line of wireless audio accessories, including audio for helmets and bikes, rugged speakers and portable power products, that are carried at a wide range of retailers.
After seeing the company’s jam-packed booth at SIA this year, I followed up with CEO and Founder Caro Krissman to find out more about how the brand started and where it is going.
New products include the Buckshot Pro, a wireless speaker that is also a bike light and power bank, and two new pieces for Outdoor Tech’s power line: Kodiak Mini and Kodak Plus. Some models are waterproof with extended charging capabilities.
Another strong product line is a universal wireless helmet audio system called CHIPS that the company is expanding from snow into the bike, skate and lifestyle markets.
Why did you start Outdoor Tech?
Outdoor Tech CEO Caro Krissman: I have always been passionate about the outdoors, particularly skiing. I grew up in Los Angeles but managed to ski 30-40 days a year through an extended college stint that included a year of skiing, bussing tables and working at the Case Logic factory in Boulder, CO.
I founded my first real business in 2004, a sourcing and contract manufacturing business. I learned a lot about growing a business, bootstrapping, managing and leading people, and marketing, but it wasn’t a brand and it was never my passion.
While the business was a fast-growth, successful business, I wanted to start a brand, not just a business. Though I didn’t know exactly what I wanted it to be yet, I knew I wanted it to be entrenched in snow and to add some tech to the game.
How did you fund the business?
Caro Krissman: The first few years I funded Outdoor Tech entirely off excess cash flow from the legacy business. It was one of those things where I would tell my wife, “this is the last $100K, I promise,” and then there was another great indicator for Outdoor Tech and I would go back to the well.
I had never taken money from anyone for the sourcing business and managed to grow it rapidly and turn it into a highly profitable company so raising money and giving away equity were foreign to me.
But the time came when I realized that building a brand was different and more expensive in the early days than building a B2B business. We needed more inventory and traditional bank lines were not easy to come by, particularly because I had a personal guarantee tied up with the sourcing business.
There were moments when I didn’t know if I could continue to fund Outdoor Tech without sinking the other business. I was sucking all the profits out of it to fuel the Outdoor Tech fire and taking a massive lifestyle haircut at the same time.
Once I was confident Outdoor Tech would be a far bigger business than the sourcing business would ever be, I decided to begin the process of selling that business and raising money for Outdoor Tech.
The raise came first, and in the summer of 2012 we took on Caulfield Capital, a family office out of Irvine, CA headed up by our now COO Charlie Gugliuzza.
I later sold the other business to a large competitor on the East Coast and have participated equally in subsequent rounds from those proceeds and at one point even sold my home. I knew our growth was poised to be tremendous and I didn’t want to dilute my stake because of timing and access to capital.
My wife was all for it. She believed in the opportunity, and plus, she didn’t like that house that much.
See Page 2 for Outdoor Tech’s distribution and product strategy
What was the first product that took off?
Caro Krissman: The Tags Bluetooth wireless ear buds was our first Bluetooth product and what we became known for early on. It was a simple message: “Stay connected, but not tethered.”
We had a tiny 10 x 10 booth at OR Summer and to pay for exhibiting at the show, we sold product there. We had huge lines of exhibitors buying Tags from us for all four days.
The Tags are still a good seller, though now one of 11 wireless pieces in the line rather than a single SKU.
The launch of the Turtle Shell, a Bluetooth speaker, coincided with the injection of capital and the build-out of our team in the fall of 2012, so naturally it was more successful. We began to receive some consumer awareness, retail placement and sell-through while pioneering the category of “rugged audio” with a solid message and fun content.
But the product that has really cemented our place in snow and has really taken off has been the CHIPS, universal wireless helmet audio. We launched this with Bern at SIA 2013 for ‘13/’14 Winter and sold every unit we made.
This winter has proven to be a much larger one than last season and we have responded to the demand to expand the product out of just snow into bike, skate and lifestyle markets by making an accessory ecosystem for it.
Which of your products are sold in Quiksilver doors?
Caro Krissman: Quik has the Buckshot, Turtle Shell 2.0, Adapt, and Privates on the audio side and the Calamari Charge Cable and original Kodiak Power Bank on the portable power side.
Sell-through has been good and as a result we have been expanding door count and SKU count with them in North America and hope to have a chance to launch with them in Europe in 2015.
What does the rest of your distribution look like?
Caro Krissman: One of the great things with our brand is that we resonate in so many channels, and as a result we have been growing rapidly in many areas of distribution.
In snow we have strong penetration from independent doors, including the Burton Flagships in the U.S., Europe and Japan, the large resort conglomerates, and the traditional sport guys like Dick’s, Sports Authority, Sport Chalet, and Christy Sport.
In outdoor, we resonate well with solid names like Paragon, Backwoods, Alabama Outdoors, and, of course, REI.
Surf/skate are new channels for us and we have plans to bolster our presence through events, athlete ambassadors, and increased trade marketing. We attended our first Surf Expo last summer. Quiksilver is the flagship of that customer base without a doubt.
Our independent bike dealer channel has been growing in a big way and will continue to do so with the launch of new bike-specific product.
Marine is going to be a strong channel, particularly internationally where it fits with a few of our distributors’ core competencies. In the U.S. we are quickly growing door and SKU count with West Marine.
The marquee lifestyle names are Urban Outfitters in their Without Walls concept and Nordstrom where we recently launched.
On the e-commerce side, Backcountry and our own site are great drivers.
Big box stores, pure consumer electronics, and wireless carriers are not part of the current retailer mix.
Co-branding has been a solid driver. We currently are working in snow with Bern, Bolle, Giro and Smith as their exclusive audio partners and expect to expand this into other verticals.
See Page 3 for Outdoor Tech’s growth rate
How big is the business and how fast has it been growing? How many employees?
Caro Krissman: We have grown from three employees in the summer of 2012 to 16 today and are actively looking at a few more key hires.
Since 2012, we have grown about 1500%. We will be eight figures on a trailing twelve-month basis by the close of Q1, and forecast roughly doubling the size of the brand over the next 12 months.
What role does crowd funding play in the business?
Caro Krissman: At first, it was a way to raise money, nothing more. We had planned our first Kickstarter for the Turtle Shell before we had our first capital raising.
Now, crowd funding is more about exposing the brand to new people, and obtaining valuable consumer feedback – crowd source “shoppers” are vocal first adopters. It’s also a highly targeted way to generate PR and market products.
Plus, the funds certainly don’t hurt. We have decided that even when the brand reaches $100 million in annual sales, we will likely use crowd funding.
