“I still treat my business as a learning opportunity. It’s fun figuring things out, even if it’s the hard way sometimes.”
Daniel Galhardo launched Tenkara USA in 2009 and has grown it into the premiere brand of Japanese-style fly fishing rods through a combination of beautiful branding and aspirational marketing. But like every founder, he struggles with the same issues all entrepreneurs do. We discuss how he’s still figuring out his product cycle and management, hiring, and the ever vexing issue of how to delegate when you already know how to do it so well yourself.
We discuss how to keep things fresh when your products don’t change every year, some of the ways we vet potential employees, as well as his startup story of finding manufacturers and launching the brand.
- 01:45 – Tenkara USA’s elevator pitch & how they started
- 05:50 – Conducting minimal market research
- 12:50 – Just because you can do it, doesn’t mean you should
- 14:30 – Going from idea to design to manufacturing
- 18:29 – What did the manufacturers need from him?
- 21:40 – Startup numbers, initial funding & determining the product mix
- 26:30 – Who is his competition?
- 31:00 – Marketing tactics and use of media
- 37:30 – Early sales & pricing strategy
- 48:20 – What to outsource, and how to find the right people for the job?
- 51:20 – Startup challenges they faced
- 59:45 – Advice for other entrepreneurs
POST GAME ANALYSIS
How did he know his business idea was worth pursuing? Daniel’s market research was pretty minimal, but he knew he really enjoyed it. And when he showed his friends that weren’t into fishing, they liked it. Perhaps most telling, though, was that he couldn’t get the idea out of his head. In my experience that’s the hallmark of an idea worth working on. The caveat is honestly assessing whether the idea is a good one that adds value to customers’ lives or solves a problem, or if it’s simply a challenge you want to overcome. The former is grounds for a great business, the latter makes a great hobby at best or a tremendous waste of time and resources at worst.
Daniel’s move to manufacturing was easy in that he wasn’t inventing something new. There were existing pole manufacturers, he simply needed them to make something to his spec, colors, etc. And in this day and age, finding a supplier is easy, too, thanks to sites like Alibaba. Where his story gets interesting is that he communicated with 30 vendors to start and narrowed it down to three. This allowed him to find the best ones for him, and allowed redundancies in case one supplier ran into troubles.
On challenge you might face as a startup is getting contract manufacturers to work with you. Depending on the industry, some will need up front payment or may even charge development fees. Daniel sold them on his vision, which helped them believe in what he was doing and made them want to work with them. And he vetted them, too, looking for ones that were responsive to emails and calls, willing to make changes, and made good quality products with high attention to detail. He wasn’t afraid to turn down some manufacturers that didn’t live up to his standards…which is ballsy, but smart. You can’t be afraid to say no if you’re not completely comfortable. You’ll almost certainly be able to find another supplier.
When they started, they had no direct competition. But, as angling has grown in popularity, competitors have come in, partly in the way of major fishing brands adding Tenkara-style rods to their lineup. As Daniel says, when competition comes in, it lights a fire under your feet and makes you get more creative.
What operational challenges keep him up at night?
One of Daniel’s biggest challenges is product management. In particular, he struggles to keep his product mix fresh in retailers’ and consumers’ eyes when his rods don’t really change from year to year. I suggested limited editions and special releases as one way to do it. He could also do special colors that are exclusive to specific retailers. His goal is to keep his SKU count as low as possible, which keeps his business simple (and is an admirable goal), but that needs to be balanced with delivering what his customers want.
Daniel and I also discuss the challenges of finding the right employees for the job. We both agree that the right person is enthusiastic about what they’re doing, and about what the company is doing, and that they’re attentive to instruction. If someone needs constant coaching, particularly on the same task, it can end up taking more of your time to manage than to just do it yourself. The trick (and trap) here is that many founders know how to do most of the things needed to run their small business, and they continue to do them long after they should have delegated because it just seems easier. But that won’t scale, you need to figure out how to delegate important tasks to your employees. Or outsource them to experts. Either way, the goal is to find someone that can do that task better than you can. This is also important because if you’re taking on too many tasks yourself, you become a bottleneck, further limiting your company’s growth.
Worried about how to do this? You’re not alone. Daniel and I both struggle with how and what to delegate. It’s a common issue for founders everywhere. Daniel’s method of bringing someone one for project work to “test them out” is one good way of not just learning what they’re good at, but also how good you are at delegating and training someone.
Tenkara USA’s Marketing & Sales Strategy
How can you make your marketing materials desirable? How can they not only sell your products, but introduce their uses to new customers, educate them, and solidify your brand’s leadership position in your category or industry? Tenkara USA’s magazine makes the practice of fly fishing more desirable, and obviously showcases their products and brand. And once you buy one, the instruction manual and supporting materials are so well done that it reassures the customer they made the right choice. This goes a long way to encouraging word of mouth praise, which helps spread the brand name and message.
Once Daniel starts talking about sales, he reinforces the need for marketing. In his case, after the initial buzz wore off and sales started slowing, he made a bigger push to reach influencers and media to gain earned media (i.e. PR), which started sales back on the upward trajectory.
And those sales are predominantly consumer direct, which lets them build a deeper relationship with their customers. And it gives them much better margins. But Daniel was smart to price his product so that he could afford to sell through retailers, too, which will cut into margins, but take larger orders. The takeaway? Make sure you know what your long term sales strategy is when you’re pricing your products or you could have to perform a painful adjustment in the future.
His Advice for Entrepreneurs
Just start. Just take that first step and see where it takes you. And do it for fun, that helps a lot!
LINKS & RESOURCES
- Find them on Facebook, Twitter, Instagram and Youtube
- Daniel and I both recommend The Four Hour Workweek, by Tim Ferriss
- Alibaba.com was his starting point for finding manufacturers