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Copied from http://money.cnn.com/magazines/business2/business2_archive/2005/06/01/8263450/index.htm For better readability, please see the above link The New Instant Companies CHEAP DESIGN TOOLS. OFFSHORE FACTORIES. FREE BUZZ MARKETING. HOW TODAY'S STARTUPS ARE GOING FROM IDEA TO $30 MILLION HIT--OVERNIGHT. By Michael V. Copeland June 1, 2005 (Business 2.0) – The creation of a shoe is a far more complex endeavor than its appearance might suggest. Footwear companies can spend up to 10 months designing new styles, which retailers expect to see long before stocking them. So it might have seemed crazy that in May 2003, just eight weeks before they would need samples for their summer 2004 line, Jim Van Dine and his three partners were still debating the merits of Mary Janes. The four were sitting in a conference room in Hayward, Calif., banging out the concept for Keen Footwear, their new shoe company. Everyone agreed on the core product, an athletic sandal with a protective cap at the toe. But Van Dine, hoping to make Keen more than a one-shoe wonder, argued for a broader array of styles, including clogs, slip-ons, and the strap-and-buckle design known as a Mary Jane. "We had one shot to get it right," he says. "I didn't want to just be a sandal company." Rolling out so many shoes at such a late date would have been unthinkable for an established shoemaker, let alone a brand-new one. But Van Dine knew that Keen had at its disposal resources far more powerful than what has traditionally been within reach of a startup. For one thing, one of Van Dine's partners, a guy with overseas manufacturing contacts, had already reserved capacity in two Chinese factories for massive production runs. Thanks to Van Dine's experience in the industry--including 10 years at Reebok--he knew there were plenty of freelance shoe designers who could quickly translate his team's vision into manufacturing specs. What's more, having helped stoke the hype that made Reebok's aerobics sneakers popular in the 1980s, he believed that Keen could make its brand a household name--in enough households at least--while spending virtually nothing on advertising. In sum, four guys with a great idea, some good contacts, and a loan to cover initial inventory figured they could go head-to-head with Nike in just 60 days. Two months later a factory in China was churning out the clogs, the slip-ons, and, yes, the Mary Janes--16 styles in all. The rest is footwear history. According to Van Dine, in 2004 Keen sold $30 million worth of shoes--around 700,000 pairs--with Mary Janes and other nonsandals accounting for 45 percent of the total. To put that in perspective, it took Teva three years to reach just $1 million in annual sales. Within months of Keen's launch, some of the most highly trafficked hipster websites and outdoor-gear blogs were singing the brand's praises, generating free buzz worth hundreds of thousands of dollars. "You could say we were birthed full size," Van Dine says. Keen's overnight rise reflects many elements of traditional brand building: a product customers love, a
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This note was uploaded on 09/08/2010 for the course BUS 131D at San Jose State University .

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TheNewInstantCompanies - Copied from

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