By Eric Peterson | May 09, 2022
Colorado Springs, Colorado
Model rocket kits
Prior to his acquisition of Apogee Components in 1994, Van Milligan was a launch operations engineer for McDonnell Douglas and a model rocket designer for Estes Industries.
"It had a good reputation with customers," he says. "It was the reputation more than anything I was looking for."
Van Milligan himself was an Apogee customer before buying the business, so he had a firsthand perspective on the company.
The hybrid manufacturer-retailer sells its own Apogee and Dynastar rockets as well as products from other brands. "We make a lot of our own rocket kits," says Van Milligan. "Apogee is small rockets and big rockets, and in the middle is Dynastar."
Dynastar was a response to the Amazonification of e-commerce, he says. "I wanted to make sure I was the only retailer on the Internet -- I consider the Internet a sales territory -- for Apogee, but I had so many people who wanted to sell my stuff, so I created Dynastar as a brand that I don't control the distribution of," he says. "That's worked out very well over the years. . . . They're good rockets. They're just as good as the Apogee stuff. I don't skimp on them at all."
Working out of a 12,000-square-foot facility with a small storefront, Apogee starts with paper tubes and balsa wood and uses an Epilog Laser to cut components in-house.
"We cut our own centering rings, and anything that goes on the inside of the rockets, we manufacture here," says Van Milligan.
The company also prints its own decals, and it works with an outside injection molder to make nose cones. "We take all of the parts and we bring them in-house and we package them here -- bag them up and ship them out," says Van Milligan.
The results include model rockets like the Zephyr. "That one is designed for people that want to fly high-powered rockets," says Van Milligan. "It requires a special safety program -- it's kind of like getting a driver's license. In order to fly it, you have to prove you've gone through the safety program, and we designed that rocket to walk somebody through that program. That has been phenomenal. We just can't keep them in stock."
Coming in 2022 is "a gliding parachute recovery system," says Van Milligan, that will allow rocketeers to steer spent rockets back to them with a Rogallo wing and a smartphone app. "We're all lazy, we don't want to chase rockets," he laughs.
That product will complement other innovative products from Apogee, including online rocket simulator RockSim, and the company's broader mission.
"Our differentiation is the educational side of things," says Van Milligan. "Estes is a big competitor. They work with schools, so they let the schools teach rocket science. We take those customers and then we raise them up to a higher level of education."
That includes a deep archive of newsletters, reports, and videos on the Apogee website. "That sets us apart," says Milligan. "Estes is different. They're going after the intro market. We're going after people who want to progress further. What we see is customers, after high school and college, they drop out, then they start having kids. When their kids are that age, they come back into it, so you not only have the kid, but you have the adult as well. Then, it repeats itself about 20 years later when they become grandparents. That's a big market we like, because now they have disposable income."
Van Milligan says the market for model rocketry has been growing recently, and Apogee has benefited from the trend. "It's asymmetric growth, between 8 and 15 percent a year, depending on the economy," he explains. "This is a hobby -- we're talking about customers' disposable income."
"As far as what makes it grow, we do kind of follow the space industry, and right now it's booming," he adds. "There's a lot of interest in rocketry and space."
Challenges: "Definitely hiring," says Van Milligan. "Supply chain a little bit. We've always had problems with supply chain."
Opportunities: Van Milligan highlights opportunities in both the educational and consumer markets, and points to the upcoming rocket recovery system as a big deal, especially in Apogee's home state. "Here in Colorado, we have canyons," he laughs.
Needs: Employees. "We've got at least three open positions," says Van Milligan.