Multiple companies have failed and some are struggling. There are customers which are waiting for orders or will never receive them. What can existing or new businesses learn from the mistakes which have caused others to struggle or fail?
As a business owner myself (we primarily offer IT, project management, and marketing services) I think about this all the time.
I see this time and time again. Clients told me they they were “just winging it”… poor or non-existent SOPs, lack of task and project management tools, and absolutely no adherence to lean management and manufacturing principals.
Passionate people tend to become the leaders in their respective industries… rising to the top of whatever it is that they do well. However, they often cannot keep organized as business scales, and the business collapses.
I have two strong opinions on the subject. One is that people in the esk8 community need to understand that passionate folk who craft badass solutions may not have a business management background, and hopefully will work with them in a supportive, understanding fashion.
Secondly, those passionate people who love what they do (building boards, writing ESC firmware, machining parts) yet struggle to keep afloat will absolutely benefit if they admit their weaknesses, seek assistance in process mapping, supply chain management, whatever the weak spots may be… and focus on what they love.
Any business that wants to grow must act accordingly from the start.
I believe a lot could be learned from skateboard companies as well as companies like Nintendo. Both kinds of companies produced components and complete products with complex electronics and I believe one way they made it work was by having distributors and lots of stores ready to carry their products. Stores would be the ones putting up the money to stock their shelves instead of customers making direct pre-orders and waiting months or longer for an order to arrive. And this way there could at least be a small enough number of shops that managing all those relationships in a more personal way would be possible.
Any company which thinks it is still a good idea to make customers pay the full amount up front and then wait for an order which may never ship has to seriously reconsider. I don’t think we have any patience left for that business model.
Absolutely! It isn’t how a successful business operates. It works for a hobby, but doesn’t scale.
Lean management is hell for everyone but management. My lean management is not wasting time thinking of how to improve, and briefing those improved processes, but just improving the process.
But okay. As reluctantly as I can possibly admit… I guess you’re on to something… maybe.
It’s probably overkill for most builders.
Little things like just-in-time inventory control, simple kanban boards… all those building blocks could at least make the difference and prevent orders from slipping through the cracks. They also give the business owner better insight and prevent “oh look, this failed” surprises.
As a side note, I should add that I really don’t want to bash anyone - I just hate to see people fail! I love to see people thrive at what they do, in particular those involved in building our hobby.
Always get a little frustrated when I see something cool in the forums and read through the whole thing to learn that it either hits a wall in development or something to where it isn’t able to be bought. So many cool ideas around here.
Do not over promise and under deliver.
And don’t do the 110% money back guarantee!
The lessons learned here are nothing new, you had a small group of specialists with no business accumen who designed a complex product with little understanding of the logistics involved after having some mild success as a boutique vendor. This is why it’s important to have investors so you can take some early setbacks at launch and still be solvent enough to keep up supply and pay off the manufacturers.
My unexperienced take would be if your demand for customer service outstrips your supply you either: overshot your market share, made a bad product, or got cucked by your manufacturer.
Either way, the solution is always simple on paper: INVEST (in CS and quality control)
Here’s my take on it:
The high end eskate market is a weird corner. PEV in general actually. The market size is small, very small compared to almost any other market, laying foundation on top of a sport that was historically known to be cheap, skateboards. Dropping prices of over $500 for an electric skateboard will shock the general public and $2k for an Evolve is seen as top of the line for the uninformed.
Where does this lead? The DIY crowd is only a fraction of this market, which leads to one thing: quality vs cost. At such low minimum order quantities, the cost of parts skyrocket for initial production, with no universal standard of parts and compatibility, every component is an experimental introductory. Product field testing to full completion is a long process, in other markets, prototypes are abused for 1-2 years in the field by paid or sponsores testers before entering production, and even then can have unforeseen issues.
The eskate market is not big enough for this, many small businesses can’t afford to test parts for 1 year with many out on the field, then taking another few months to ramp up mass production with markups to recover cost. The unfortunate reality is that it has to go 2 ways, products are either pushed to market in beta phase for batch one and a rolling update is used to fix issues as they come, or extremely high prices to recover in depth R&D costs.
Both ways causes one or the other group of people to criticize that business. The investor opportunities for eskate parts is low, very low. There is not that much money in it yet, and while it is a growing sector, the negativity against it is also high. Vendors need to cough up out of pocket to bring these products to life, while unable to sell enough quantity at a reasonable price to recover costs, WHILE competing with chinese generic models that can be made for much cheaper due to existing factories and low labor costs.
The combined factor of a market in it’s infancy to a very small crowd, with 0 cross compatible standards, many parts requiring modification for the end user to install, with many of these users asking for prices that cannot support the business in the low quantities requested, yet asking the business to cough up large chunks of money for R&D, warranty and CS. It highlights those individuals who really does it for a passion for the hobby, who choose to spend their personal time designing and manufacturing, with a clear distinction to those who simply choses to import cheap goods.
And personally, as much as I love this hobby and making/inventing things, I would think long and hard before I sell parts on the eskate market, because yall fuckers are an impossible crowd to please.
What can we learn from esk8 business failures?
I have been 100% self employed for the last 8 years. I’m not rich by any means but I’m still in business and can pay my all my bills with a family of 6. I always say if it were easy everyone would do it.
*working “ON” your business as opposed to “IN” your business. Learn to grow and scale properly with infrastructure, know your audience and be honest.
I read a great book that I would recommend for small businesses.
Entrepreneurs need to understand there’s a market and markets will fluctuate. They always have and always will.
Company Of One Summary
will teach you how going small, not big when creating your own company will bring you independence, income, and lots of free time without the hassles of having to manage employees, long meetings, and forced growth.*
What do you think of when you hear the word company? If you’re like most people, you probably imagine a large-scale, transformative behemoth like Apple, Google, or Amazon. Maybe this is why the idea of creating your own profitable business seems intimidating.
But what if there was an easier way? What if it was possible to side-hustle your way into a full-time personal business? How would it feel to own a company that gave you the time and financial freedom to do what you love?
Paul Jarvis’s Company Of One will teach you exactly how to make this dream a reality: a profitable company run only by yourself. Jarvis has worked with top athletes like Steve Nash and Shaquille O’Neal, companies like Microsoft, Yahoo, and Mercedes-Benz, as well as successful online entrepreneurs. With 20 years of experience building one-man business ventures, Jarvis is well-prepared to deliver critical advice to those looking to do the same.
Here are my 3 favorite lessons from this book:
- If you want to make it as a solopreneur, you need to stay small and deliberately limit your growth.
- The smaller your audience, the higher your chances of success.
- Technological advancements make it possible to skip large investments and create quick cash to get the ball rolling.
Choose your business partners carefully. Double check on who you trust to manage the operations. Invest in your company before thinking about profit.
These are golden rules IMO and should be strictly adhered to if you want to keep control and quality of the product/services a small company provides.
Opportunities are nice but uncontrolled growth usually doesn’t end well.
Bringing in outside investors is something I avoid.
They lack the passion and knowledge that made the business what it is and all they see are numbers that they want to improve. Most of the time they have no idea of what they are doing yet they take control of the company.
You can enjoy and be passionate about: diy, welding custom batteries, making enclosures, designing gear drives and mounts, try new wheels, wind your own motors, press your own decks, etc
But when business scales, are you also passionate about: registering a business, banking paperworks, maintaining a website, inventory tracking, order raw materials, order fulfillment list, shipping account, shipping materials, taxes, insurance, customer service.
A one man passion project selling small batches is one thing. Having a viable scaleable business is another. A lot of people have great diy skills, but trash business management skills. The problem comes when people don’t realize it themselves.