We didn’t start Owner Operator as a business. Pete and I grew up snowboarding together, and eventually I went to art school, and Pete went to school for fashion. Owner Operator was founded in order to keep ourselves connected to the snowboarding world that we grew up with. In that, we succeeded! I was barely following snowboarding in 2008, and now am riding more, have a whole new group of snowboard friends, am discovering new mountains, and at age 40, and am still getting better at the act itself.
The most unexpected part of it all for me was an education in business. When we made our first run of clothing we didn’t even understand the basic business cycle. We didn’t understand pre-booking collections, going to trade shows, markups, what retail looked like- embarrassingly naive.
The companies we grew up admiring, like Tough Traveller in our hometown of Schenectady NY, have always operated on the most straightforward principals. Source the best materials, build products the best you can, and sell them at a fair price. We’d stop at the Burton factory on the way to the mountain, and know that we were buying the coolest boards, from a local business focused on doing what they did best. It was all so simple.
For most people, it's just not like that anymore.
The more I’ve learned about how business works, and about how I believe business will look like for the next 25 years, the less I want to put Owner Operator into the system.
Here's what we've done, and what we've learned from it.
Owner Operator Corporate Timeline (condensed for clarity)
- Figure out how to make what you want. It is way harder than you thought.
- Use a few personal dollars to make some stuff.
- Make an awesome product.
- Accidently arrive “on-trend”.
- Sell to ultra cool NYC boutiques. Learn what markups are.
- Have awesome ultra-respected luxury brand that distribute and represent your product in Japan.
- Borrow a ton of money.
- Deliver product late. This is unavoidable when you don’t have enough dollars to make your project a factory priority.
- Appear in all the cool Japanese fashion magazines.
- Sell to a few awesome independent stores.
- By the time you deliver your gear, two of them are out of business, and/or can’t otherwise pay their bills.
- The other half of them can’t sell your product. A few do okay, but they’re basically as broke as you are.
- Figure out what to do with the stuff you made for that hot NYC boutique that ran out of money before you delivered it to them.
- Struggle to design new lines for markets you don’t understand, and can’t afford to really dig into in any meaningful way.
- Try to look pro.
- Sell big order to mega retailer at a discount.
- Make special products for an online “core” specialty retailer. Give them access to exclusive products that you’re not letting the big mainstream guys in on.
- Sell small orders to fashion world that you lose money on.
- Borrow more money.
- Learn that you have to buy insurance, figure out how to buy UPC codes, make stickers, slap them on thousands of little plastic bags.
- Try to fit 1500 knit hats into your 200 sq/ft office.
- Count and package hundreds of jackets scattered all over the floor of a fabric storage room in the Garment District.
- Deliver product to mega retailer.
- Get stiffed by that “core” specialty online retailer. Get left with stuff you borrowed money to make. Try and figure out what to do with it.
- Mega retailers charge your card for a bunch of packaging mistakes.
- Your product can’t compete with mega brands in the mega retailer. The megas will never buy from you again.
- Realize that if you don’t stick to production minimums, you’ll continue to lose money on every product you make.
- Design awesome new line. You have no idea at this point how many lines you’ve actually designed and sampled.
- Serendipitously meet the perfect ambassadors for your company.
- Everybody loves new gear. You’ve finally got a great line, great marketing, etc.
- There’s not a single store in the country that both loves your story, and can sell your product to it’s customers.
- Bite the bullet. Borrow more money. Work freelance, squeeze a few last drops out of the old 401k. Develop new line overseas.
- Samples are great. Quality is amazing, price is a little better.
- Show new line. Everybody loves it. Kind of feel like a sell-out for moving line overseas, but if it enables you to survive, and support your friends, isn’t it worth it?
- Realize that there’s really no market for this product either unless you come into it with millions in the bank to back it up.
- Take a deep breath that lasts six months.
- Fuck looking pro. i.e. Be yourself.
I just read that nobody can hope to survive in today’s retail landscape without Amazon. We sold some stuff to them a few years ago. You get a letter from them and basically tell them what you want them to buy. It’s great- we figured we could use their extra dollars to help support our production run. Bring our costs down a little, hit some minimums, make a couple bucks in the process hopefully. The best part is, your customers can now get your gear on Amazon Prime, which is an undeniably great service if you hate going to stores like I do for the most part.
You wrestle through the buggiest, most antiquated and dehumanizing series of electronic forms, and half-broken spreadsheets. You borrow some money and somehow manage to make the stuff and get it out to a few of their mega warehouses. Your credit card is auto billed for mis-labeled boxes, missing UPC symbols, and a million other things you don’t have the time to argue about. Have dead-end conversations with somebody from a foreign call center.
Years later, I still see corny Amazon photos of bags I sweated through the summer to make. The price is different every time. Everybody you know sees a different price. At some point we got paid some shit margin, and I feel like the whole experience cheapened our gear, and made me feel helpless and hapless, at the mercy of an uncaring bureaucracy.
Low pricing, discounts, credit cards, and painless and “free” deliveries are all just grease in the wheels that keep an unending avalanche of stuff sliding from some factory somewhere into a pile in your house.
The whole economy of it, now that we have a basic understanding of its structure from top to bottom doesn’t make much sense to me. I believe I understand what it would take to build a traditional business up from zero, and it’s not going to happen. We don’t have the financial resources, or the desire to be a part of it. I see companies in the market losing $100 million dollars on $200 million dollars of sales. I see fashion boutiques going out of business, big box stores going out of business, and specialty stores going out of business. I’d rather make $100 this year, than rack up a pile of debt to some shit chain store that curled up and died while owing everybody in the industry millions. Pretty much every one of my favorite brands over the last 20 years have gone out of business.
The whole thing is really ugly.
There’s nothing inherently valuable about annual product releases. The jacket we made last year is just as good this year. It cost just the same amount to make- more even once you account for it sitting in our office all year taking up space. Do we dump it at a lower price, so we can scrape up some money to make a new jacket? What if the new one is pretty much the same as the old one?
The whole clothing business in 2016 is based on deep discounts, low margins, and massive volume.
I just got off the phone with a new factory I was beyond excited to work with. Beautiful place, amazing quality, all the right machines to make a great jacket. She says I’m an artist, and she loves what we do, but that it doesn’t make any financial sense for them to work with us. Like most of the remaining USA factories, they’re focused on making jackets for the military. We’ve even been invited to submit bids on military contracts ourselves. If I’m uncomfortable dealing with Amazon, I definitely don’t want to get wrapped up in the military-industrial complex. We’ll figure something else out. We always have.
The truth is, that a small company like ours will never beat the big boys on quality or price. This world is built from top to bottom for big businesses. I find myself asking what value do we really add? There are clearly people out there that love our gear. I love it myself. Is it the “best”? That all depends on where you place value. Maybe one day we’ll figure out how to join the club.
Big businesses don’t want to be in small markets. K2 is too small for Rubbermaid. Snowboarding is too small for Nike. The fashion world is run by rappers, financed by mega corporations. Billabong lost $115 million bucks last year. The world is overfull of stuff. If we’re going to justify making more of anything, it’d better be special. Anything short of that is a waste of everybody’s time.
I haven’t checked my spelling and grammar. I’m not 100% sure that we haven’t burned a few bridges, but I don’t think I’ve said anything that any reasonable person wouldn’t agree with. There’s nothing in particular we’re trying to prove here, just wanted to share a bit of our story.
The days are full of new ideas, and I’m getting back to work. We’re going to build something awesome, and it won’t make any sense at all to most people, but it’ll make sense to us, and hopefully to you too.
Thank you so much to all of our friends, you’re the only reason we’re still here, and inspired to try and make the world a little bit more interesting.
Steven & Pete