One of the first things I bought when we started Iridesco was a Spire laptop backpack. Today, almost four years later, the bag still looks and feels new. That's a rare thing these days, where most things are made cheap and flimsy (IKEA) and meant to expire after a couple of years (iPod). Spire bags are made to last, and it is comfortable and damn good looking (yes, a handsome looking laptop backpack).
My business partner Danny introduced me to Spire. He found them online about six years ago when researching for a suitable backpack for his laptop. Three years after Danny got his backpack online, I purchased mine on Spire's website - and you'll probably have to do the same, at least for now, because Spire bags are conspicuously missing on the shelves of most retail stores. I'm used to associating good, solid products with large corporations, and it seems strange to me that a physical product can exist without some sort of presence in stores. I was curious about how a little company came to create such a durable product, and how they compete with all the "big dogs" out there. So I decided to get in touch with Spire's founder, Cory Barnes.
Cory was gracious enough to let me interview him over the phone. After finding out that Spire has moved from Boulder, Colorado to Western Massachusetts, I went to their new headquarters and visited Spire, where I was also introduced to the new line of women's bags by his wife, Lexie Barnes (read interview here).
I. Boulder, Colorado
Hear, Hear: How was Spire started?
Cory Barnes: When I got out of college, with a degree in business, I worked for Nissan Motor Corporation. I didn't feel that I fitted very well in that type of corporate environment, so I quit the job and moved out to Boulder, Colorado. I didn't have a job, didn't have a place to stay, so I stayed on the floor of a friend's apartment when I was looking for somewhere to live. And I just did random jobs to feed myself.
Doing the random jobs was fun, but it wasn't a viable way to make a living. I was really into outdoor activities and outdoor gear, and I was also interested in computers and the internet. I had a laptop then and started looking around for a good laptop bag, like most people do, and just couldn't find anything I wanted. At that time, there was really nothing out there that was any good. And I thought that I could do a good job of making cool laptop bags. Since Boulder is a center for outdoor activities, I started asking around, talking to people, finding out who could help me with designs, manufacturing and securing the materials - those are the main things I needed to get the business off the ground. After enough digging around and talking to people, and being persistent about following up, I had the things I needed. I got a prototype together and found someone to manufacture it. I started with a very small production run, I kept all my inventory of Spire in the closet [laughs]. Literally, everything fit in the closet. We started with maybe 3 products - we had the Zoom, the Endo, and we had the Boots. And when an order came in, we'd ship it out. That's how we started, and it grew from there.
HH: When you were building the prototype, how did you find those people to help you?
CB: Now it's different, it seems that you can find everyone online. But back then, internet wasn't as big. And I had to rely on talking to people, friends, and asking them if they knew anybody. I looked in phone books. It sounds pretty mundane [laughs]. Boulder is a small town... My situation is unique, and I can't say it'll work with everyone else. But I just found people in the outdoors industry, which isn't hard in Boulder, since everything there is pretty much outdoor related. So I just kept on talking to people, and when I found somebody I clicked with, I stuck with them.
HH: What were you looking to create with Spire?
CB: Well, I wanted something that was going to be durable, functional, and something that didn't look like the other bags out there. I wanted something that looked and perform like a bag I'd use everyday. That I could take with me anywhere. And it's still my philosophy today. Now there are a lot more competitors, but I don't think any of them perform as well as ours do.
HH: How about Spire, the brand? How did you come up with it?
CB: I came up with the name Spire when I was sitting in a coffee shop in Boulder with a sketch pad, jotting different names down on paper, trying to think of what would best represent the brand I was trying to create. And the word Spire, it evokes the outdoors, it's short, and it's memorable. We're not the only one using the word Spire in its name, but I really liked it. Once I decided it was a good name, after running it by my wife, well, she wasn't my wife at the time, she was my girlfriend - I ran it by her, she liked it too, and I did a trademark search. I didn't want to start building the whole brand and find out after spending a lot of money that someone else is using the same name. So I bought a book - you know, I didn't have any money to hire a lawyer - I bought a book on how to trademark a name, and I went down to the Denver library, did a trademark search on the word Spire, and filled out all the paperwork, and got the name trademarked. You don't necessarily have to do that when you're starting a company, but I think it's a good idea. So now the name Spire is a registered trademark. So we're the only company that can use that name for this type of product.
II. Selling online: "crazier than anything they had ever heard of..."
HH: How did you finance your company at the beginning?
"I was probably a little naive at the time, and I figured there was nothing I could do to not make it work."
CB: When I started, I had nothing, I had zero, so I financed the business through my credit cards. I couldn't have gotten a loan for the business. I was planning to sell online, and back then it was a new concept to the banks, and it was crazier than anything they had ever heard of - at least in my experience, going to the local banks in town. I had a business plan, but it wasn't like a 50-page document with projections. I had an idea, a unique idea at that time, and I couldn't get traditional financing. Lots of people go to family for a loan, but I had a lot of confidence in my idea, that it was a good one. I was probably a little naive at the time, and I figured there was nothing I could do to not make it work, and I also like to take risks.
I had a business background. I had a degree in advertising, and a master's degree in business. So it wasn't like I was coming out of nowhere. I looked at the market, and I didn't see anything out there that could compete with it. I've done my research about how to sell them, and how much I could sell them for. It wasn't entirely a leap of faith - it was a calculated risk, and I knew what I was doing.
HH: So selling online was part of your original plan?
CB: Yes, I was interested in the internet, and at the time I was teaching myself web design. And I thought it'd be really cool to sell bags online. That way I could get the product out there to the people who need it. People had computers and were using the internet, and that to me was the only way to sell the product. Because it would've cost a lot more money to go to trade shows, and got into stores. I was pretty much doing everything myself - designing the website, doing the photography - because I had to.
Early on, we got a listing on Yahoo! We immediately were listed at the top for laptop backpack, and clearly people were looking for that. From the first week we went online, we started getting orders without doing any advertising at all. People just started to find us, because they were looking for the products, just like I was. It wasn't a lot at first. We were also lucky to get some publicity from some magazines early on.
HH: Did you send out press releases, or did they just find you?
CB: They just found us. Now it isn't so easy. Now we have to make the contact with media people and send out press releases. My wife has her own line of bags (Lexie Barnes), so she's building her brand now and selling her products. And her line's doing great - she's selling knitting bags, diaper bags, etc. Lexie was just in Bust magazine, and she'll be in Parenting magazine. We handle all the PR ourselves, it'd be nice to handle an outside PR firm to do this stuff, but they're very expensive. You have to pay them thousands of dollars every month, and you don't know if you'll get results or not, which is kind of a gamble.
HH: How did you guys learn to handle PR?
CB: I took some PR classes, but... The main thing is that it starts with your product. If your product isn't unique, or different in some way, if it doesn't stand out, all the PR money you throw in isn't going to do you any good. So you really have to do something that's going to be of some interest to the magazine's readers. That's how you need to look at it - from the perspective of the editor. They want to sell magazines, they don't really care about your product as much as selling magazines. So they need to find things that will suit their readers, something that's new, eye catching, unusual and unique. If your product does those things, your PR will be a lot easier.
HH: Aside from PR, what else did you do for marketing?
CB: I'm a huge believer in customer service, and creating an outstanding experience for people with our products. To me everything starts with the website and customer service email. When somebody buys our products, we want them to be satisfied with the entire experience of owning it. So if somebody goes to our website, doesn't understand something, and sends us an email, we'd usually respond within minutes, or hours, but definitely within a day. I can't tell you how frustrating it is as a customer to write an email to a company without ever getting a response. What's the point of having your email address on your website if you don't respond to it?
The whole purchase process begins with our website, so when we respond to customers questions quickly and make it easy for them to find what they're looking for, that's the first step. We ship the product quickly, we have a 30-day return policy with no questions asked, and a lifetime warranty for the product. We also will provide replacement parts to people if they lose them, amongst other things. So I guess the answer to your question is, we rely a lot on word of mouth. That's how we get most of our new customers. And like I said, the reason for us to have word of mouth is our comitment to good products and good customer service. I get emails every week from people saying that they bought a Spire backpack 6 years ago, taken it all over the world, to whatever country it is, and their backpack has held up over the years. And if they don't, they tell me as well, and we take care of the problem quickly. Over the years, we built a reputation of making a high-quality product and standing by them, and that really helps.
But also, beyond word of mouth and PR, search engines have also been very big for us. If you Google "laptop backpack", our ranking fluctuates, but generally we're in the top 10. That's a lot to do with our website optimization. Part of it is that we've been around for a long time, we've been in search engine for a while, so that helps. And our homepage of our site is designed to make it friendly to people who are searching for products like ours.
We do online marketing, text ads. We've done Google ads in the past, and banner ads on sites that are relevant to our products. There are a lot of websites for Mac enthusiasts, such as PowerBook Zone, and they are a natural fit for us for marketing. In the past, we've tried to do a shotgun approach with generic websites, but they haven't been effective for us. We like to do marketing that's highly targeted. So when people see our ads, it's relevant, and they'll click on it.
HH: How do you feel about - say, going to a computer store, such as an Apple store, or Tekserve in New York, where they carry certain brands of backpacks - Timbuk2, Crumpler, booq, etc. A lot of these companies have the budgeting muscle to be featured in stores and trade shows. How do you compete with that?
CB: That's a good question. Spire's never really done trade shows. We'll start that soon. Well - we did MacWorld once, and it worked out well, but generally speaking, we don't really go to trade shows. Because when I started, we were not in the financial position to do it. But now that we've grown and have the capability to keep up with demand, we will be doing trade shows so we get our name out there and the retail stores will pick us up. So those companies are bigger than us, but that doesn't really bother me because we can still make our products better than them anyway. To me that's what it boils down to.
HH: What would be the biggest complaint about your product?
CB:[laughs] I would say, if anyone was to complain about our bags, it would be the price. I understand that our bags are not the least expensive out there. But when you buy a Spire bag, you are getting design, comfort and durability. And those things are worth the money. You don't buy a Spire bag for just a year - you'll keep it for seven, eight years. When you compare our bags with others with similar quality, it is not expensive at all.
One of the things we offer that other people don't is different sleeve sizes for the laptops. I think that's very important because laptops, especially nowadays, come in a variety of different sizes. In my opinion, you cannot make a laptop backpack that holds just one size. If you look around, you see most bags have a generic, poorly fitting sleeve in it, but for our backpacks, you can choose from 8 or 9 different sizes of sleeves, so you're getting a perfect fit for your laptop. That's important to people, and that's why people like Spire over other brands.
IV. Hindsight: "It's going to cost (a lot) more money than you think it's gonna cost."
HH: So what was the hardest thing about running Spire?
CB: Keeping our costs down is a huge challenge. The cost of materials is always rising, especially things like foam, which is petroleum based. When the price of gas goes up, the price of foam goes up as well. For years we were making our stuff in Boulder, that was the way I really wanted to keep it, because I was committed to having a high-quality product made in the US. But it was not feasible for the long term. In January of this year, we started having some of our products made overseas. That was a huge step for us, because we have always promoted that the bags are made in Boulder. And some of them still are, but most of them are made overseas. And the quality is great - I would never have done it if the quality wasn't good. A lot of times the quality is even better. It was a step we had to make, and we're happy with it.
HH: If you can go back to your first year, is there one piece of advice you would give your younger self?
CB: Definitely. It's going to cost more money than you think it's gonna cost [laughs]. There are just so many expenses you don't account for when you are starting out because you don't know anything. You make your business plan based upon your best guesses, but everyone knows the business plan only goes how you think they're going to go. If you think it's going to cost x amount of money to run your business for the next 5 years, double that and it'll probably be closer to what it's going to cost.
Take Lexie's business for example. We pretty much knew how much it'd take to make the bags, since we've been making bags for years. But you know, going to trade shows is more expensive than we have anticipated. It's not only the booths you have to pay for - for example if you go, you have to pay for a 10x10 booth, costing $50 per sq foot, so okay $5,000, but that's only the beginning. That does not include the chairs, table, electrical circuits, you have to figure out a way to display your products and pay for that. Then you need to ship it, get airline tickets to go to the event and get a hotel when you're there. So now it's costing $10,000. And that's a small, small budget for a trade show. We just budget as we grow. For Lexie's first show, she did a 10x10 booth, and the second time she did it, she doubled the booth size and made it 20x20. And we just grow as we're going, I guess.
HH: You started in 1998, it's been 8 years. You went through expansion, from closet to what you have now. What are some advice you would give for people on growing their business?
CB: First, find the right people to help you. Because if you really want to grow your business, you can't do it all yourself. This is something that probably a lot of entrepreneurs struggle with. I did, and I still do. Because you want to be able to control everything. In the beginning, I was doing every single thing myself. From designing the product, making the website, writing the copy, taking the photos, shipping the bags, doing the customer service, accounting, and everything else. The only way I was able to grow the business was to find the right people who could do those things, better than I can. I had to accept the fact that I am not a professional photographer and needed to hire someone to do that. I needed to find a bookkeeper and an accountant who could help me. That would be my first piece of advice.
Second advice for growing a business: you have to be able to gamble, you have to be able to stomach a certain amount of risk financially. You have to invest in your business. You have to put money into inventory, marketing, staff, and it takes a certain amount of guts, I guess. Especially if you don't have enough resources. You also have to not only invest the money, but the time as well. I guess my advice is better for someone who is starting a business than for one who is in one right now. You really have to do something that you love and are interested in. Because if you're not, you're not going to want to put in the kind of hours it takes to succeed.
It's so cliche, but it's so true. You have to choose something that you won't get sick of, that you can do day after day after day after day. From the time I wake up in the morning to the minute I go to bed, almost, some part of me is connected to the business, whether it's answering emails at home or sketching out designs. It's not a job where you can just shut it off. It has to be something you want to do for a long time.
V. Now, with wife and three kids.
HH: What do you do day to day now that the business is off the ground?
CB: [laughs] Well, now I'm in a very different position, personally, from when I started. When I first started out, I was single and had no responsibilities, I could sleep on someone's couch. But now I'm married with three kids, I have a house, and my life is very different.
I think that might be a lot of people's dream, that you start a business, get it running, and it'll just take care of itself. And then you can just go to the beach and relax. Believe me, I wish I could just do that. That's not the way it works. I'm just as busy now as I was 8 years ago, I can't just rest and say things are going great. But I probably don't put in as much hours in as I used to. I can't, I have a family. I have to make them a priority, and so I have to delegate things to other people.
As far as my daily routines... When I wake up in the morning, I have my laptop, so I check my emails at home. I do that before I get dressed. Then I go to the office. It varies day-to-day, but I still do most of the customer service myself. Usually I take care of any shipping problems first. From there I will take a look at how our web traffic is doing. I check on Google Analytics, which is one of my homepages in Firefox. We get a lot of our visitors from search engines. If anyone out there has a website, I highly recommend Google Analytics. It's free and it has just so much information.
I spend about half a day on design, and the other half on paperwork and customer service.
HH: You still spend that much time on design?
CB: I do because we're always doing product development. I have to communicate with the factory, and I'm also working with Lexie on her designs. We have a lot of things in the pipeline for her and for me. A lot of my designs, for one reason or another, do not go into production. Either we can't get the idea to work as well as we'd like to, it's too expensive to make, or people's demands have changed. We spend a lot of time thinking of ideas and testing them out to see if they work. A lot of times they don't. So many hours are spent on designs that you might not see. I also look at competitors, I look at their websites. I still do the website myself, and as a web master, I have a lot of web issues to deal with. That takes up a significant amount of time.
VI. What We Talk About When We Talk About Children: Chucky Cheese, Hot Wheels, and Bionicles
HH: What kind of tools do you use daily, aside from Firefox and Google Analytics?
CB: We use... Live Chat Now, which is the chat we use on our website. And I'm not on it as much as I should be, I'll be first to admit it. But when people go to our site, there is a little link, and if you click on it... I'll get online now. Someone can go there with a question and talk to me real time. I think this is an important tool for customer service. I also use this thing called Web CEO, which is a website optimization software. As for our website, we use Miva, which has been great. I wouldn't think of anything else for our shopping cart. We started with Yahoo! store before they were called Yahoo! Store. We used to use Shop Site. We use Dreamweaver for the website.
HH: What kind of things do you read?
CB: I read a ton of magazines. Business 2.0, Fast Company, Fortune Small Business, Spin, New York Times, Time Out NY.
As for as TV, I love Deadwood. I don't have HBO so I rent it with Netflix. Six Feet Under I love... What movies have I seen recently? I don't get to the movies a lot because I have 3 kids. But I am going to see Miami Vice tonight.
HH: So what do you do outside of work?
CB: I used to snowboard and rock climb and mountain bike, but that was before I had kids. Now, really my kids are what I do in my free time. I go to the park. We go to Chucky Cheese. We have three boys, I hang out with them and play with their Hot Wheels cars. They're really into Bionicles. We take them to play soccer, things like that. It doesn't sound very exciting, but I wouldn't have it any other way.
HH: Last question. What are the 3 things you can't live without?
CB: Well. It'll have to be my wife and kids; my business; and my laptop. Those are pretty much it, I guess.
HH: Thanks for your time, Cory!