Mountain Village, Colorado
Industry: Lifestyle & Consumer
Pete Wagner tapped a global growth market with his custom skis and changed the way skiers buy. Now he's moved his factory to a stone's throw of a Telluride chairlift.
Before going into the ski-making trade, Pete Wagner worked in the golf industry, developing software for swing analysis used in the design and manufacturing of custom clubs.
In 2000, he got himself a pair of high-end skis off the shelf, and the experience led him to think that the custom-built model would also be a good fit for the slopes. "I bought a pair of skis that in theory should have been good for me," Wagner recalls. He skied them for a few months, but after he tried a different pair, he realized they were anything but. "They were crippling me -- they were way too stiff."
So he developed custom ski-modeling software and a business plan to shop around to the snowsports industry's top brands, but found no takers. "Big companies like K2 weren't interested in talking to me," he says.
Wagner subsequently went to University of Colorado Boulder in 2003 to get his MBA and dusted off the plan for an entrepreneurship class, asking, "Is there a market for custom skis?"
The exercise convinced him that there was indeed a great business case for a custom ski maker, so he set up shop in Placerville, 15 miles outside Telluride, in 2006 with a staff of five.
The process is simple: Customers take three minutes to complete a Skier DNA questionnaire at the Wagner website, followed by a Skype session or call. Then the team creates a model of the perfect ski based on the customer's size, age, skill level and preferences. "On the back end, it's complicated, but on the front end, we try to make it as simple as possible,” Wagner says.
After the buyer picks graphics and signs off on the design, Wagner and company turn the digital model into the real thing in Placerville and then they ship it -- just three weeks after the order is initiated.
Compare that to a two-year product development cycle at the major ski manufacturers. "They build a prototype, they have people ski it, they go back to engineering and make some tweaks, and repeat the process," Wagner explains. "We go from concept to on-the-snow in two weeks."
Like fingerprints, every set is unique. "A difference of one pound in your weight will make an incremental change," says Wagner. "They're always different." The distinction owes itself to time-honed algorithms, not to mention such top-quality materials as ash and maple cores, carbon steel edges, and aircraft-grade aluminum. "Our design system is so sophisticated and refined that it works," he adds.
At first, Wagner took on a good deal of prototyping and product development work from domestic ski startups. "We rode that wave for a while," says Wagner, but it dried up when Wall Street imploded in 2008. The company didn't skip a beat: "By that time, we had really good momentum with our brand."
And he's ridden that wave to present day, thanks to an agile process and a wide-ranging market. "It's scalable and we can connect with people wherever they are," says Wagner describing a market that's 80 percent North American and 20 percent "scattered."
Wagner Custom Skis has grown 30 to 60 percent annually in recent years, and the staff has tripled. Wagner expects volume to hit about 1,500 pairs for 2016. "We're definitely firing on all cylinders right now," he notes.
To accommodate the growth, the company has moved into a 5,000-square-foot facility as of Nov. 2016 in Mountain Village, the main base area for Telluride Ski Resort. "We're 200 yards from the nearest lift," says Wagner. "We knocked some walls down and gutted it and got to design a ski factory."
The building, which is owned by the resort, not only offers more space, he adds, it offers a much more visible location, complete with a showroom. "We're going to have a brick-and-mortar location like we never had," says Wagner. "It's pretty unique to have a ski factory right in the village core. It's going to be pretty theatrical. There'll be glass so people can look in and see people making skis."
But the move is not about a higher profile as much as it is about productivity. "We're estimating we should increase our efficiency by 40 percent," he explains, citing a rewrite of the design algorithm and better integration with scheduling, design, and invoicing. "We're going our keep our crew lean and mean."
And that crew is amply stoked about the move. "We have a powder day clause," Wagner says. "If Telluride Ski Resort gets four-plus inches, we work from 1 to 9 p.m."
Wagner Custom Skis start at $1,750 a pair -- custom snowboards run $1,200 and up -- but Wagner says his customers feel the product is well worth the premium. "When they go on a ski vacation, they just ski -- they don't worry about their equipment."
Challenges: "Our biggest challenge is brand awareness," says Wagner. "How does a small company like us get on the radar of someone who wants to get a new pair of skis when our competition is a bunch of big multinational companies?"
While the Mountain Village location will help, the short answer is word of mouth. "Our main strategy is we work really hard to make each one of our customers happy and have a great experience," he says, "and they tell their friends."
Opportunities: Continued high growth. "Buyer behavior has changed and is changing in a way that aligns with our business model," Wagner explains. "Since the downturn, people are more thoughtful -- people are willing to spend more money on a product that will perform better and last longer." He adds, "I call it the farmers market analogy. People like to know the people growing their tomatoes."
Needs: "Getting up and running," says Wagner of his new factory. Construction and moving involved a big "cash burn" for the business. "They say it takes twice as long and costs twice as much. That's definitely the truth."