This is a story of three guys writing a business plan for a class at college. A business that rakes in 500,000 euro in sales after three years, with 30k of pure profits to boot.
It’s not a swing for the fences kind of story, but taking three years to set up three 20-somethings and their families for relatively comfortable lives is nothing to scoff at!
I first heard the story last Friday, at a mandatory entrepreneurship class. It’s a story of three of the professor’s former students, told as an example of a business plan gone good. As part of the class we are divided into groups and asked to write a business plan over the semester.
Student A was a very passionate alpinist. His business idea was making climbing rope so he pretty much forced the rest of the group to go along with the idea. The professor found the idea somewhat odd, but hey, it’s just a class assignment so why not.
After some passionate explaining – the rope needs to be elastic so it catches falling alpinists softly. But not too stretchy or it will become a bungee cord and people will die. The same elastic properties must hold at -70C and +40C. The rope mustn’t frail when being dragged through rocks and bushes. Or people die.
A 60 to 70 meter stretch of rope costs 200 euro. (one unit)
Suddenly “climbing rope” doesn’t look like a silly problem. Now, what’s the market?
The guys did their market research. Googled everything, posted extensive questionaires to climbing forums and found out that the average US alpinist buys new rope every year, the average European every 2 years and the average Slovenian every 3 to 4 years.
The average Slovenian also gets 110 climbing days a year, which makes us crazy, since rope after one “full load” becomes unsafe.
Only five companies in the world make this sort of rope.
Most of them also dealing with other climbing gear. Only a single Czech company deals exclusively with rope – they do about 5,000,000 euro in sales a year. The market looks pretty crowded when only 5 companies share the lot, especially since alpinists buy almost exclusively from established brands.
Not one to back down from a challenge, they called the Czech company: “Hiiii, I’m a harmless student from Slovenia, working on a school project … blahblahblah”
They got through to an engineer and got him talking about rope. Turns out the whole market is worth 25 to 30 million a year.
Student: “So only hardcore alpinists buy this rope huh?”
Czech engineer: “Oh haha, heavens no. Most of it goes to indoor sports climbers who rarely leave the arena”
At this point in the story, everyone started getting bright ideas. They could make the rope cheaper! Doesn’t need to be as rock resistant! Hey, they don’t have temperature swings! They can make it lighter! Cheaper too!
But what’s to stop everyone else from releasing rope for indoor use only? Here you are, fresh into the rope making business and everyone else with a bunch of experience … no that’s not going to work. You also wouldn’t want to compete on price since that’s always doomed to fail.
Well, what if I told you most indoor climbers are girls? That they buy rope like crazy (a lot of falls) and absolutely never leave the arena?
Now the class was stumped. What the hell kind of information is this? There’s nothing we can do! Just make it lighter or something, girls hate carrying heavy things …
Make the rope pink and voila, a whole market of indoor female climbers scrambling over each other to buy your rope because it’s prettier.
Even better, these guys are now buying rope from the Czech manufacturer, dying it pink (or whatever the colour of the season is) and marketing it to climbing girls the world over.
Nobody else is going to move in on their market because it’s too sissy. A real man’s climbing gear manufacturer can’t afford to be associated with a sissy product. Just like you and I, they scoff at the idea of “Pfah, pink rope. Don’t make me laugh. As if colour’s got anything to do with anything. That’s not even a real value proposition!”
Here’s the real kicker, when I told this story to my sister or any of my female friends, the idea of “Yeah, just make it pink, right?” came up the moment I mentioned indoor climbers.
PS: my sister keeps complaining that running shoes for real athletes are all ugly. So do all her friends. Anyone wanna do something about it?
- Seilfaktur Knits Old Climbing Ropes into Amazing ‘SeilSchaft’ Furniture (inhabitat.com)
- Reaching my limit (suegaycol.wordpress.com)
- More on the climbing trees with leg irons and a chainsaw… (codeproject.com)
- How to Climb a Rope Like a Navy SEAL (artofmanliness.com)
- How-To: The Rope Braid (bellasugar.com)
- Belay that! (campjack.wordpress.com)
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