Posted: November 3, 2015
There’s a crucial difference between a “startup” company and a “ramp up” company.
A startup company is at the beginning of its life cycle. The product or service may be new and untested, the inventor/founder inexperienced and in need of basic business guidance.
But as time goes by, the successful startup carves out a market niche. Revenues are being generated from sales. Investors sit up and take notice. Leadership settles down. Staff expand and expertise grows. The product itself improves.
At a certain point of economic development, the “startup” company is no longer a startup. It’s moving into a ramp-up phase. The time has come to take the company from provincial sales to national or international sales. More staff need to be hired. Costs will grow immensely, but so will revenues. The company in its next five-year-business plan may have set a goal of raising revenues from $1 million per annum to $10 million.
As the Alberta economy grows, many startup companies are moving into ramp-up territory.
TEC Edmonton’s business advisory team is evolving with the changing economy, still involved in the start-up sphere, but increasingly working with innovative Alberta companies ready to ramp up. TEC Edmonton’s mandate is to encourage the growth of innovative, high-technology companies to benefit Alberta as a whole. When a company grows 10-fold, expands, hires more skilled individuals and pays more taxes, we all benefit.
TRAK Kayaks, an Airdrie manufacturer of high-end, high-technology kayaks, has been in existence for some 10 years. A TRAK kayak has the unique ability to easily change shape, for optimal performance in both flat and moving water. It’s extremely portable, so light and flexible that it can be folded up into an easily transportable rolling travel bag.
The technology is evolving nicely, says TRAK Kayaks CEO Nolin Veillard. The business voyage, as is expected, has taken many twists and turns involving the original inventors, a move to the Calgary area from Saskatchewan and the outsourcing of the actual manufacturing to a reputable outdoor gear manufacturer in the Philippines.
“Until now, we never did a lot of market research,” says Nolin, an avid kayaker in his own right. “Today, we have to bring a scientific approach to marketing.”
The challenge is not difficult to articulate. The TRAK kayak is a high-performance 16-foot kayak with those unique features that sells for $2,800 US. Hard-shell kayaks range in price from $300 to $4,500, most being in the $1,300 to $2,500 range. How can TRAK Kayaks reach a broader target market that would include outdoor enthusiasts not yet exposed to the TRAK product? How can it grow its sales to create enough profit margin to make the business sustainable in the long-term?
Enter TEC Edmonton: TRAK Kayaks has been working closely with TEC Edmonton Executive-in-Residence and marketing expert Ric Williams. “TRAK had tried a number of different marketing angles, had done secondary research and talked to many qualified people,” says Ric. “But there was a lack of a focused strategy.
“We’re helping TRAK Kayaks undertake a major survey to determine who is their potential market, and then to identify the right segment of the market, how we find them and how we market to them.”
While conventional wholesaling to specialty outdoor stores is one avenue, TRAK Kayaks is exploring direct on-line marketing options, such as inviting kayakers to kayaking holidays featuring TRAK kayaks, creating a sense of belonging, a family around the TRAK brand, making the brand something special in the kayaking world and offering potential buyers a trial try-out period.
“There’s no reason TRAK Kayaks can’t meet its sales goals,” says Williams. “The feedback from its existing customers is extremely positive. They love the product.”