7.31.2011

Why are outdoor companies leaving Vermont?

They came. They grew. And they left.

I suppose it's an essential thing to do, wondering why somebody left a place for someplace else, especially if you're the one that's staying put. I've certainly been on the leaving end numerous times -- pulling up stakes from Boulder, from Seattle, from Jackson, from Portland. And each time, while there were plenty of those who were happy and excited to endorse the new adventure, there were always those who weren't exactly wild about the news. Understandably so.

Taken one at a time, the list of outdoorsy companies that have left Vermont behind isn't so bad. But looking at the pile of names in a single group -- it can certainly appear that some sort of nefarious forces are at play, with a bend that leans against the Green Mountain state.

Tubbs, Merrell, Karhu, Mad River Canoe, Isis, Garmont.

As any J-school dropout can tell you: two is a coincidence, three is a trend, but six means that your story is very, very late.

In all fairness, each time one of these outdoor industry stalwarts has packed up the U-Hauls, the minor tremor led to a brief festival inward-looking hand wringing. Why not Vermont? What has this place done to turn these companies away? Are our taxes too high? Is this place unfriendly to business? Are the mountains too small? Is it the lack of good chile relleno?

But freaking out about the cute girls who left the dance early ignores a few significant realities. Like the talent that still remains in the room.

Darn Tough puts Vermont right there in bold letters on the front of every package, and it would take an army of sandblasters to push them out of Northfield. Waterbury's Rome Snowboards is the third largest snowboard brand in the world -- though arguably the most influential, imitated and important -- specifically because of their gritty eastern perspective. The crew at Ibex down in Woodstock is competing against publicly held mega-brands, and is not only holding their own, but growing, simply by being the independent-minded Vermont dudes and dudettes that they are. Vermont Canoe is going all-in on spectacular, hand-crafted boats ... right in the Mad River Valley.There's apparently a fly fishing company down in Manchester called Orvis, though i don't know much about them. And don't get me started on the soaring future of Outdoor Gear Exchange -- I just wish that Marc would adopt me.

The second reality is the reality of business. Wrestling to find Vermont's "fault" in an outdoor company's departure, or succumbing to the easy out of blaming the trend of "brain drain" doesn't just play into the hands of the gloom and doomers, it simply ignores major market trends. It's like blaming the rules of chess for not being able to move a castle diagonally, or like blaming your ski jacket for not being able to stop the wind from blowing.

Once companies started shifting to international manufacturing, the home team was no longer anchored to a specific geography. The economies of scale -- being able to share marketing, R&D and financial support in a single office, for example -- are simply too attractive for many efficient business managers to pass up.

And making Asia that manufacturing choice has also impacted things. Apparently there are some factories over there that are a lot cheaper, and it's a shorter trip from southeast Asia to West Coast ports than the Eastern seaboard. So if you're playing in that sandbox, it makes basic dollar sense to have an outpost west of the Mississippi.

That's all pretty obvious stuff, of course. But another perhaps more subtle shift in the last two decades is that outdoor brands, these inventors of adult toys, these purveyors of sustainable healthy lifestyles, these role models for endless outdoor amusement ... have become legit. Today's outdoor icons are eagerly pursued by private equity money, and acquired by publicly traded NYSE ticker brands for a simple reason: they're money makers.

Inside the climbing-webbing beltway (aka, "behind the soft-shell curtain"), there are a handful of savvy, skilled and extremely good looking executives that have saved and made a ton of money for their companies by navigating these waters. These men and women are pretty well known in what's called the outdoor industry.

But up on the rock or out on the water -- nobody is famous for pioneering Vietnamese manufacturing or for maximizing brand synergies through consolidation. Nor should they be.

True legend status in the outdoor world is reserved solely for the innovators. The inventors. The passionate outdoor addicts who saw a need, who thought it through, and who stand behind their ideas by putting their name on every product.

While it's a fruitless, pushing-meat-uphill exercise for a small state like Vermont to beat itself up about how to compete with offshore labor costs, or how to artificially subsidise the effiiciencies of a clustering market segment, it's actually a pretty good moment to focus instead on setting the stage for that moment of outdoor inspiration.

Sure, Vermont isn't cutting multi-million dollar checks to lure mega-employers here along with their three-ring binder full of job postings. But Vermont does have the fertile ground of a vibrant four-season outdoor culture, a passionate outdoor community, a truly unique natural environment, and widespread acceptance for having more than one job.

Of course, as any good farmer knows, the best way to grow a big crop is to plant a lot of seeds. Encouraging entrepreneurship in the outdoor industry can take a lot of forms in Vermont, from structured programs at the University and high school level to carrots at the State level.

But the best way to get things started is to lace up those hikers, head out into the fresh air and see where your feet -- and your mind -- takes you.

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1 comment:

  1. Anonymous1:18 PM

    Just a thought . . . minor issue really. But, industries succeed when their is a cluster or center of competency. One example is athletic footwear in Portland, OR where you have Nike, Adidas, Columiba/Montrail, Lacrosse, and others. Look at Montebelluna, Italy for Ski Boots.

    One negative of Vermont - non-compete clauses are enforceable. Like California and other states, make non-complete clauses illegal and unenforceable and you start to create a cluster where minds can gather, split, re-gather, etc.

    The state legislature would have to pass the law given court precedents established in Vermont. In fact, Vermont is one of the few states that actually allows an employer to fire someone who refuses to sign a non-compete.

    Just one thought.

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