The following article provided by Forbes and /Mar 7, 2017
There have always been entrepreneurs nipping at the edges of the ski industry, trying to find ways to fit in, to merge their preeminent passion and their professional life into one. It’s the ultimate ski bum-turned serious person fantasy.
With so many people pursuing this track, we get outerwear brands that pop up and disappear almost annually, a new kind of ‘healthier’ energy bar on a weekly basis, and dozens of new players producing ‘revolutionary’ insulating layers every ski season.
It’s not incredibly difficult, apparently, to contract a factory in China to make a new brand of polyester underwear.
But hardware is tougher. Skis, boots, bindings, snowboards, goggles, helmets—the lineup of serious manufacturers in skiing doesn’t change much. If anything, it has consolidated, as once-independent brands have been merged and rolled up.
There’s a significant amount of domain knowledge equity required to make a binding, a boot, a ski. Distributing hardware is difficult, too. The selling cycle is longer; consumers don’t replace their skis every year.
There’s a newer cast of custom ski makers, however, who have found traction with their craft and enough willing skiers who want a ski or board that was shaped and built just for them.
Almost all of these upstarts can trace their heritage to Pete Wagner, a mechanical engineer, who, in a dingy building outside of Telluride 11 years ago, started using the kinds of tech and advanced manufacturing that first permeated the golf industry—Wagner once worked for Penley Sports, a maker of high-tech shafts for golf clubs—to make a better ski.
Wagner’s business, Wagner Custom, has flourished since he got out of business school at the University of Colorado with the backing of a small group of willing investors. (What Coloradoan doesn’t want to own part of a custom ski company?)
Wagner just moved to a new slot in the heart of Telluride Ski Resort’s village, making it the only ski maker with a manufacturing base that is actually on-mountain.
“It’s pretty fun for us, we get to meet our customers face to face, and we give them insider access to see how we make skis,” Wagner says.
Wagner’s success comes from his technical mastery of ski construction and high-end manufacturing, and the kind of grinding persistance present in most successful entrepreneurs. For those skiers trying to crack the ultimate life riddle of combining work and play, Wagner offers a blueprint, albeit a difficult one to replicate.
The company has recently doubled down on its success, spending $400,000 on capital improvements in the last six months, upgrading its fleet of computer numeric control milling machines and automated routers, and installing new German-made ski tuning machines in its slope-side factory.
The critical path to creating a utterly unique pair of skis at Wagner is just two weeks long. At a big manufacture such as K2 or Volkl, that process takes two years.
“Our process is the most agile in the world,” Wagner says.
The company might work out of shop in a rarefied ski town, but its processes resemble those of a small and nimble software company.
Last year, the company made 1,200 pairs of skis, cranking out six pairs on every workday of the year.
A hardware company’s best defense: better product
At the new shop in Telluride’s Mountain Village, Wagner has 5,000 square feet and 12-full time employees working on designs that, in many cases, have lapped the industry.
The core product’s quality goes far beyond its mass market competitors in the industry. At companies such as Rossignol or Salomon, the total price to produce a pair of skis can be as low as $35 to $50. Just the raw materials for the wood core in Wagner’s skis, produced by a hardwood mill in Quebec, cost $70 per pair.
There was a time when the big ski makers had more of an eye toward craftsmanship and materials. Volkl once held its own stands of timber, specially nurtured to make better ski cores, in the forests of Germany. But the materials have changed as consolidation, automation and Chinese manufacturing have reshaped the industry.
At Wagner, the three employees who do much fo the critical work of honing the manufacturing process and actually putting the skis together all have engineering degrees.
Beyond mere materials, Wagner is ushering new technology into skiing. The company recently rolled out skis with viscoelastically dampened carbon fiber construction.
Companies have been knitting carbon fiber into skis for a long time, but the problem with many carbon skis is that that they’re actually too light on the hill. They can hold an edge because of their high stiffness value, and they’re handy and easy for hiking or skinning uphill, but they can chatter coming down because they don’t have enough mass to keep the edge on the snow.
Wagner’s solution to this issue: reverse engineering the dampening technology used in carbon-fiber aircraft, such as Boeing’s 787, and using it in the ski. The result is layers of viscoelastic dampening foils inside the ski that keep a light, stiff ski on its edge, chatter-free.
The first version of this solution dampened vibrations in the ski too much, Wagner says, creating a sluggish feel. But he and his team, through quick iterations on the product, and the ability to test the skis right out the back door, got the dampening technology dialed to a science.
Wagner can now tune a ski’s dampening characteristics according to the skier, her preferences, and the kind of terrain she prefers.
Supplementing a hard product with community, experiences and software
Wagner Custom isn’t the kind of company evoked by the words ‘hardware startup’ in most people’s heads. Wagner’s model, by design, can’t be scaled up to millions of units a year, and Wagner will never go searching for facilities in China. But much like large hardware startups that fend off well-funded challengers, Wagner has recognized that there’s more to building the preeminent custom ski company than simply making skis.
During the last 10 months, the company has built out a software platform that tracks every customer and ski order that comes in. Instructions for each ski are delivered to the factory floor and tracked as they proceed through the manufacturing process.
The system also includes hooks into the original algorithm that Wagner built, more than 10 years ago in C++, that takes a skier’s preferences, his skills and his size and produces specs for a ski. The specs include the skis’ shape, their dimensions, and the materials, from the kind of wood core used—sugar maple, aspen, poplar—to whether the ski will include a torsion box made out of carbon fiber and epoxy.
The best hardware startups build moats around their product, barriers to entry, with great software and communities and connectivity enabled by that software. Wagner’s skis will probably never plug into the wall or connect to wi-fi—and that’s a good thing—but there still exists a community the company is nurturing along.
The move from modest warehouse digs in Placerville to a primo spot in Mountain Village is part of that. Passerby catch intriguing glimpses of the ski-making process from the window. Those who go in the front door can meet the people who end up making their skis. When returning to Telluride, skiers of Wagners will have a point of gravity, a place where their product grounds them, where conversations on skiing can be rekindled.
For those who come to Telluride to pick up their skis, Wagner offers a half day of guided skiing that includes exploring little stashes on the mountain, and tips and pointers for skiers learning how to ride their new boards. For skiers who don’t end up liking the product, Wagner offers them a complete rebuild—something the company ends up doing on about 3 pairs out of every 1,000.
Taking this community building a step further, the company has put together ski trips for Wagner customers. One trip, later this winter, offers heli skiing in Iceland. All 12 spots are sold out. Another gives skiers a chance to ski with Wagner in British Columbia.
Marketing the company’s skis has largely been a word-of-mouth operation, and one carried out through the web. The company’s skier DNA quiz, completed in less than 10 minutes, has proven effective as a dual-use tool: first as a the top of the marketing funnel, getting a consumer into Wagner’s database, and secondly as the most critical element of determining the eventual shape and makeup of a ski.
Wagner has developed marketing campaigns to reach those who didn’t follow through and buy skis, but here the tenor and cadence is nothing like that from sales-oriented startups out of Silicon Valley. People might get two or three emails a season from Wagner.
“We take a pretty deliberate approach to everything,” Wagner says.