Podcast Summary
The Slow and Steady Rise of Osprey Backpacks: Pursuing your passion with patience, hard work, and dedication can lead to success, even in a world of get-rich-quick schemes.
In a world where get-rich-quick schemes are ubiquitous, Mike Fain Hour's slow and steady growth of Osprey backpacks is a refreshing reminder of the value of patience, hard work, and dedication. Starting from a small, bespoke backpack brand catering to hikers and campers, Osprey grew into a global, multi-million dollar enterprise after shifting manufacturing to Asia. Mike's love of art and design and the outdoors culminated in the creation of a world-renowned backpack brand, but his journey was not without setbacks and challenges. This success story is a tribute to the power of perseverance and a testament to the virtue of pursuing one's passion.
The Founder of Osprey Packs: Mike Pfotenhauer's journey from minimal finances to prioritizing outdoor experiences: Mike Pfotenhauer's upbringing taught him the value of experiences over money, which influenced his career in designing durable and functional outdoor gear as the founder of Osprey Packs.
Mike Pfotenhauer grew up in a big family with minimal financial means. Despite their situation, his family made a point to prioritize spending time outdoors through camping and hiking, even if he did not enjoy it as a child. These early experiences helped Pfotenhauer develop a passion for backpacking as he got older. The resilience and resourcefulness he learned from his upbringing also influenced his career in designing durable and functional outdoor gear. In his formative years, Pfotenhauer learned the value of experiences over money, and this ethos continues to guide his business today as the founder of Osprey Packs.
Mike Pfotenhauer's Love for Making Gear: Making your own gear gives you a reliable and comfortable experience in the wilderness, and was a common practice in the early seventies when outdoor gear wasn't easily accessible.
Mike Pfotenhauer's love for creating his own gear stemmed from his early years, where he would hike and camp in the wilderness with his family. He appreciated the challenge of navigating the terrain and even got lost once, but appreciated the experience overall. In college, he learned how to sew and started making his own backpacks with nylon fabrics. He believes that making your own gear gives you a better sense of reliability and comfort when in the wilderness. This passion for making things extended beyond backpacks, as he even built his own bicycles. The early seventies was a time when not many people had access to outdoor gear, so building your own was a common practice.
Mike Pfotenhauer's Journey of Building a Backpack Business: Mike Pfotenhauer started small by repairing and custom-making gear for customers before opening a retail shop. He built products based on customer designs, without any advertising, and grew the business through word of mouth.
Mike Pfotenhauer started his business of making backpacks in 1974, originally called Santa Cruz Recreational Packs, after realizing he could make money by building things for other people. Starting by repairing products and custom-making gear for people for their trips or activities, he opened a retail shop in downtown Santa Cruz. The process was much simpler back then, with rent being only $150 per month for a retail house and shop. He put a sign up and never spent any money on advertising for the business until 20 years later. With just an industrial sewing machine and a $1000 loan from his parents, he built products for customers based on their designs.
Finding Balance Between Passion and Practicality in Entrepreneurship: Pursuing entrepreneurship requires finding a balance between passion and practicality. Sometimes it's necessary to take risks and borrow money to scale the business, even if it goes against the founder's initial vision.
Mike Pfotenhauer, founder of Osprey Packs, started off as an artisan making custom backpacks and climbing gear for customers. He wasn’t interested in the business aspects of running a scalable business and was content with just making enough money to survive. He was able to work on his own schedule and live the life he wanted to live. However, he eventually recognized the need to borrow money and grow his business, which was a difficult decision for him. This highlights the importance of finding a balance between passion and practicality when pursuing entrepreneurial endeavors, and understanding when it’s necessary to take risks to scale the business.
Why Osprey Backpacks Got Their Name: Osprey backpacks were named after the bird rather than the founder's name due to an inspiring moment on a backpacking trip. The company started small and transitioned to wholesale with the help of customer feedback and sales reps.
Mike Pfotenhauer, founder of Osprey backpacks, chose to name his company after the bird Osprey rather than his own name despite many other backpack companies being named after their founders. He was inspired to choose this name after a memorable experience backpacking with his family during an electrical storm where several ospreys came zooming up over the edge of the canyon. The company started as a small custom backpack and repair shop in Santa Cruz in 1974 and transformed into a wholesale entity in 1986 due to the need for more income. Naively transitioning from retail to wholesale involved a significant change in manufacturing processes, but Pfotenhauer learned from his experience in repair and input from sales reps to fulfill market needs.
The Journey of Osprey's Founder and the Challenges Along the Way: Starting a business requires persistence and determination, even in the face of challenging circumstances. Building a successful brand can take time, dedication and the willingness to take chances.
Mike Pfotenhauer's journey to establish his backpack manufacturing business, Osprey, involved borrowing a $35,000 loan in 1986 and taking his product line to retail mountaineering shops across the US. However, it was a challenge finding employees skilled enough to handle production in Santa Cruz, where the company was initially based. This made it difficult to meet the demands of the wholesale market. Despite these challenges, Osprey managed to make a mark in the industry with some shops taking a chance on the brand. By 1986, a backpack cost around $150 with a wholesale price of around $70-$75 per piece. The journey leading up to the company's success required resilience and perseverance.
The Rise of Osprey Backpacks in Rural Colorado: Osprey backpacks faced the challenge of meeting growing demand, which was met by settling in a larger factory in rural Colorado and utilizing skilled Navajo sowers.
Osprey backpacks faced the challenge of meeting growing demand in 1990s, which prompted the search for a larger factory in rural Colorado where the company finally settled. The building they found was previously occupied by a contract group building for Goretex, who were performing top-secret work, but were operating their last day of business. The building had a capacity of 7,500 square feet, making it large enough to meet their requirements. This choice of location was driven by the availability of skilled sowers, including hundreds of Navajo sowers who were out of work. Despite the remoteness of their location, they were able to ship their products across the country with the use of UPS and FedEx. The expertise of the Navajo sowers contributed heavily to the success of Osprey backpacks in those early days.
Mike Pfotenhauer's Unique Approach to Backpack Design and Overcoming Financial Challenges: Mike Pfotenhauer's focus on anatomic design and unique features, along with his hands-on approach to managing all aspects of his business, led to his success in the backpack industry despite financial challenges.
Mike Pfotenhauer's success in the backpack business was due to his focus on anatomic design and unique features. He spent a lot of time designing packs that fit comfortably and transmitted the load to the body. One of the unique features was the top pocket that could be turned into a fanny pack. Despite the growing demand for his products, he faced financial challenges that limited his ability to ramp up quickly. With just $5,000 in receivables, he moved to Colorado with his wife and son where he hired Navajo employees. He was responsible for all aspects of the business, from designing and production to payroll and HR, and attending trade shows to find new customers.
The Story of Osprey Packs Founder Mike Pfotenhauer: Mike Pfotenhauer's unwavering passion for design, dedication to improvement, and willingness to push boundaries were the key factors behind the success of Osprey Packs.
Mike Pfotenhauer's passion for design never wavered, even as he juggled multiple jobs while starting his business. He used a combination of intuition, feedback from sales reps and customers, and testing in the field to constantly improve his product. However, this led to criticism from retailers who didn't appreciate frequent design changes. Despite these challenges, Mike remained dedicated to building a better product and pushing his limits. His business was rooted in a unique community of Navajo sowers and he even participated in a peyote ceremony to cleanse his factory of a supposed curse. This dedication and willingness to push boundaries are what made his brand, Osprey Packs, the success it is today.
The Benefits and Challenges of Working with Other Cultures: Collaborating with people from different cultures can broaden your perspective and lead to greater understanding. Offshore manufacturing can provide access to skilled workers, but it can also present challenges.
Working with other cultures can lead to a greater understanding and add value to one's perspective. Moving a manufacturing operation offshore can be difficult but sometimes necessary to remain competitive and find skilled workers. Skilled workers in certain industries are aging out, making it harder to meet demand and turn down potentially great partners.
The Difficult Decision to Move Production Offshore: Sometimes, entrepreneurs must make tough decisions to sustain business growth, like moving production offshore, even if it means leaving behind the original location and workforce.
Mike Pfotenhauer faced a difficult decision when demand grew for Osprey within retail chains, but the company couldn't fulfill orders due to a lack of raw materials in the US. Competitors had already moved offshore, making materials less available. Pfotenhauer eventually opted to move production to Korea, which proved to be a smart decision due to the high quality of workmanship and low prices. Though he felt guilty about moving production offshore, it was an inevitable economic move. Pfotenhauer's story highlights the difficult decisions entrepreneurs must make to sustain and grow their businesses, even if it means transitioning away from their original location and workforce.
Moving Production: The Osprey Backpack Story: When considering moving production to a new location, it's important to weigh the cost efficiency, impact on employees and their families, work-life balance, and potential opportunities that may arise. Taking calculated risks can lead to significant growth in business.
Mike Pfotenhauer shares the story of how he moved production of Osprey backpacks from Korea to Vietnam, citing lower prices and a friendlier environment. Despite keeping sales and marketing in Cortez, Colorado, the business quickly grew, leading to storage challenges and high shipping costs. Pfotenhauer traveled to Vietnam four times a year for production oversight but eventually decided to move his family there. Adjusting to life in Ho Chi Minh City was a culture shock, but it freed up his time to focus on design. This move highlights the importance of considering cost efficiency, the impact on employees' families and work-life balance, and the opportunities that can arise from taking calculated risks in business.
The Success of Osprey: Maintaining Identity and Unique Designs: By maintaining their own prototyping and design facilities, Osprey was able to maintain their identity and produce unique designs, setting them apart in the competitive backpack industry.
After nearly 30 years in the business, Mike Pfotenhauer's move to Vietnam allowed Osprey to scale and produce backpacks at a massive scale. However, the move also resulted in the forfeiture of brands' unique designs over to the factories, which Osprey avoided by maintaining their own prototyping and design facilities. Rather than looking at competitors for inspiration, Pfotenhauer had a plethora of his own ideas for product evolution. He eventually returned to the US due to a promise to his wife and opened a Bay Area design office while still maintaining operations in Colorado. Through their dedication to maintaining their identity and unique designs, Osprey has set itself apart in the competitive backpack industry.
The importance of patents and staying focused on a single product line for business success: Patents can be crucial for protecting your products and business growth. Staying focused on a specific product line can lead to expertise and a competitive advantage. Delegating tasks can allow for more time and focus on important areas.
Mike Pfotenhauer, founder of Osprey Packs, initially had a negative attitude towards intellectual property and patents, believing that making a better product mattered more than being stuck with a patent. However, as the company grew, he realized the importance of patents and they have since patented several important and necessary things. Pfotenhauer also chose to focus solely on bags, backpacks, and travel bags, refusing to expand into other outdoor products as he believed they were not experts in those areas and didn't want to lose focus on what they already did well. Additionally, Pfotenhauer did not want to be the CEO of the company, preferring to focus on designing and leaving the business side to someone else.
Mike Pfotenhauer's Journey as Founder and Owner of Osprey Packs: Succession planning is crucial for small businesses, even if the owner takes sole ownership for years. Selling a company during a pandemic can be difficult, but finding buyers who share the company's values is important.
Mike Pfotenhauer, founder and former owner of Osprey Packs, maintained sole ownership of his company for years and never took outside investors until 2016. He relished the design work and did not enjoy dealing with finance and marketing. Pfotenhauer sold the company in 2021 for over $400 million to Helen of Troy, a company that shared his values on the importance of people. Pfotenhauer's children were not interested in taking over the company, which highlights the importance of succession planning for small businesses. The sale of Osprey Packs was a difficult process due to the Covid-19 pandemic, but Pfotenhauer appreciated the buyers who hung in there and believed in the company's vision. Now retired, Pfotenhauer plans to stay in Cortez, Colorado.
From Backpacks to Art: Osprey Founder's Transition after 50 Years in the Industry: Mike Pfotenhauer transitions from backpack design to art and printmaking, considering backpack design to be a form of art. Success attributed to hard work, luck, and recognizing opportunities. Osprey gained publicity when a blind man climbed Everest wearing one of their backpacks.
Mike Pfotenhauer, founder of Osprey, shares his plans to transition from backpack design to art and printmaking after 50 years in the industry. He considers backpack design to be a form of art and sees his transition as coming full circle. He looks forward to traveling and seeing his company's packs being enjoyed by people all around the world. When asked about the company's success, Pfotenhauer attributes it to both hard work and luck, but emphasizes the importance of being prepared to recognize opportunities when they arise. Osprey gained significant free publicity in 2001 when a blind man climbed Mount Everest wearing one of their backpacks.
