Daniel Varney wants to take on the lucrative bicycle parts, accessories and clothing market with "ingeniously conceived" bicycle accessories.
We caught up with Altum Designs’ founder when he was on the cusp of hitting his Kickstarter target to talk about competition in a £400m market, manufacturing runs and founders' tendencies to hide products from the world until they're perfect.
This is the latest in our The Investibles series of startup profiles.
1. What is your investment status?
We are currently crowdfunding on Kickstarter to raise the £16,500 required to place an initial production order – we’ve hit £14,783 so far and have a week to go!
2. Describe your business in one paragraph; what’s its vision and what problem does it solve?
Altum’s aim is to produce novel, aesthetically strong and ingeniously conceived bicycle accessories.
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This vision is embodied in our first product release – the MODUAL range. The range consists of an innovative bicycle multi-tool (in the form of a modular system) and an accompanying tool roll that provides an effective means of transporting a cyclist’s essential items. MODUAL seeks to offer a portable yet powerful alternative to conventional folding tools.
3. How did you come up with the idea for your business?
MODUAL was born out of my frustration with ineffective folding bicycle tools that are impractical and awkward to use. I did not want to settle for products that sacrificed performance and usability in order to keep them as small and light as possible.
With a background in industrial design and ergonomics, I was confident I could design a multi-tool that remained compact and functional but was also better looking and nicer to use.
4. What’s your addressable market?
Bicycle multi-tools are classified as an accessory and form part of the lucrative bicycle parts, accessories and clothing (PAC) market.
The bicycle accessories market is very competitive and I was wary of the vast choice already available to the cycling consumer.
The accessories component of the PAC market was worth £3.5bn globally in 2014, to which UK sales contributed around £400m. The PAC market, whilst crowded, encouragingly outperforms the bicycle market in terms of growth per annum and generally offers higher profit margins.
Half of the global population are said to be capable of riding a bicycle and there are upwards of two billion bikes in use worldwide, which gives some indication of the market’s scale from a consumer perspective!
5. What’s great about your team and do you have a mentor?
Our business is a fledgling one and currently only employs myself. However, I am fortunate to have a network of close friends and associates with specialist skill sets (branding, marketing, logistics etc.) who regularly contribute.
I have very recently joined the mentorship programme at the London Small Business Centre, which I hope will continue to provide advice and guidance as my business develops.
6. What key challenges have you faced and how have you overcome them?
I would say without hesitation manufacture and product differentiation. As alluded to above, the bicycle accessories market is very competitive and I was wary of the vast choice already available to the cycling consumer. Therefore, I spent a lot of time honing the design features that form MODUAL’s USPs to ensure it was sufficiently differentiated from its competition.
The level of competition has also heavily impacted our pricing strategy. Whilst MODUAL is a premium product we still need to price competitively to stand any chance of gaining market share. The predominant sales channel in this area is through distribution, which for us meant focusing on lowering our unit costs. This was not easy but we persevered in optimising our designs for manufacture and refining our supply chain until we could make the numbers work!
7. How have you funded your startup and why did you choose this route?
The business has been self-funded up until our currently ongoing Kickstarter campaign. We chose Kickstarter as it is a quick and cost-effective method of determining whether there is actually any demand for what you have created! The other great upside is gaining engaged and passionate backers, many of which will continue to follow the brand long after the campaign has ended.
Early next year, once the business is fully operational (as production lead-times are quite lengthy) we will be seeking further external investment.
8. How do you market your business and how successful has it been so far?
Up until now, we have been more concerned with marketing our Kickstarter campaign rather than the business itself. We have been relying on the tried and tested methods of blogger outreach, mailing lists and social media engagement as well as leveraging any industry contacts we have made along the way.
We have a marketing plan drafted for 2017 (when we will be trading fully) that will include activities such as product reviews, social media, SEO, PPC, cross-promotion, and event or rider sponsorship.
9. What are your plans for the future?
Once we have concluded our Kickstarter campaign (through to product delivery) we have lots of plans!
We are already in the process of extending the range of MODUALAR Attachments for use with our multi-tool which will allow the user to expand its functionality to form a truly unprecedented modular tool system.
I fell into the trap of trying to keep my designs under wraps and convincing myself it needed to be ‘perfect’ before showing it to anyone.
From a business perspective, we will be launching an ecommerce site soon so we can continue to target direct to consumer sales.
In the medium-term, we will seek to secure the investment needed for the NPD outlined above and to place larger production orders (thus unlocking economies of scale). This will allow us to start building a domestic (and ultimately international) distribution network to really start growing the business!
10. If you started again, is there anything you would do differently?
Perhaps be a little less conservative and seek product validation sooner. I fell into the trap of trying to keep my designs under wraps for as long as possible and convincing myself it needed to be ‘perfect’ before showing it to anyone.
11. What advice would you give to entrepreneurs that are starting a business?
From my experience (and of course this may differ for other markets) make sure your product or service is distinctly different from what your competition is offering. The world is as competitive as ever and it is becoming increasingly difficult to create something original that will stand out from the crowd. If you fail to manage this, you stand a far lesser chance of survival let alone success.