Big switch creates kite surfing startup
Kite surfing products manufacturer Switch Kites is about as far away from a logging company as you can get. But that’s the point, says the company's co-founder and director Jacob Kajavala.
Kajavala is president of the Forest Industry Contractors Association and head of KFL (Kajavala Forestry) in Kawerau.
But after being recommended by his bank BNZ for an owner-manager course run by Auckland business growth centre The Icehouse in 2008, Kajavala realised he was more than just a forestry contractor. “It changed my life. I suddenly saw business as a far more generic exercise. I thought I was a logger or a forestry person, but the truth is I’m just a business person.”
The course made Kajavala ask whether he could do anything different from forestry. “It helped me to untangle and compartmentalise certain business challenges like staff and marketing ... and it gave me the balls to want to give it a crack with something totally different.”
It took another two years for Kajavala to make that leap. First he wanted to hone his new skills on KFL’s problems.
Kajavala had never wanted to run his father’s firm, but after a logging accident almost killed him - and shattered his dream of becoming a professional windsurfer - he turned all his energy to growing the firm.
“But my whole driver was vengeance – vengeance against something that had nearly killed me – and it was a very negative driver.”
You can grow a business with a negative culture, but it’s hard and not much fun, he says. “When people are fighting with each other, lying to each other and backstabbing each other, they aren’t working,” he says, adding that the resulting 10% to 12 per cent loss of productivity can be the difference between being profitable and non-profitable.
So Kajavala introduced positive values into KFL and reinvented himself as the values police.
KFL is now more stable and profitable - Kajavala won't give figures, but it has one of the lowest staff turnovers in the industry and three-quarters of employees who do leave, return.
Transforming the business and upskilling his staff also gave Kajavala the opportunity to get his head out of the day-to-day running of the business and the confidence to look for something new. The question was, what?
Kajavala’s brother Daniel - “a design genius” who was looking for something more challenging than designing the latest fluorescent safety jackets - introduced him to kite surfer and retired industrial engineer Ralph Von Brause, who was on the hunt for a new kite surfing equipment supplier after his US one went bust.
Jacob Kajavala and Von Brause decided to go into business together.
Kite surfing’s attractive because it’s the fastest growing sport in the world, says Kajavala. Also every company the pair researched had the same route to market: manufacture in China; sell via a distribution company to a retailer; who sells to the punter.
“Switch Kites is the only company in the world who manufactures and sells direct to the consumer. So we can sell the latest designs for half the price. That’s our point of difference.”
It’s also Kajavala’s way of doing business differently that has opened a lot of doors for the new company. He attracted one of the world’s top kite surfing designers, Bill Hansen, a former aeronautical engineer based in San Francisco.
Hansen had been frustrated by other kite surfing companies that had promised the earth but hadn’t paid on time. “He didn’t know us from a block of cheese, but we made sure we paid him three days early all the time ... he loved us.” In return Hansen promoted Switch Kites to his industry contacts.
Switch Kites also gave Kajavala the opportunity to try out his newfound branding and marketing tools. “Our plan is not to sell kite surfing gear, but to create a feeling; a brand that has a certain meaning to people, down which we can pump other things.And we’ve found we can sell wetsuits, boards and all sorts to our converts.”
In 18 months Switch Kites has secured 3 per cent of the world’s kite surfing market. It’s aiming for 10 per cent in two and is on target to do that. Only 2 per cent of its business comes from New Zealand, with 82 per cent from the Northern Hemisphere. It has customers as far afield as Montenegro and Latvia and warehouses in London, Hong Kong, Australia and New Zealand.
Kajavala loves his new company. “Confidence in yourself and the trust of others is the real currency of good business. With those two things you can really create things.”
Will it fly?
Advice from Ken Erskine, in charge of startups at business growth centre the Icehouse
A new start
Starting up is even more challenging when you're new to a market, but there a things you can do to increase your chances of success
To be successful when you start any business, you need to understand your market. That's even harder when it's an industry you haven't worked in before, but it's not impossible.
Kajavala had some understanding of the kite surfing market through his experience in the sport and his introduction to Von Brause and Hansen.
These connections gave him partners and customers with a deep understanding of a growth market.
When you're entering a key market, you need to know the key players, suppliers and market leaders. If there are customers who don't buy from the market leaders, find out why.
If it because of price, reliability, brand perception, the dealer network, or other issues?
Kajavala also set out to establish a positive culture for Switch Kites. The values that underpin your startup's culture are fundamentally important. Culture and values should be modelled by company leaders.
To turn around a negative culture, leaders need to model, encourage and support positive values.
A business course was Kajavala's kickstart for starting up. Impactful programmes like the Icehouse's Owner Manager Programme are design to build confidence and create motivation, driving a heightened awareness of what drives growth.
Kajavala's story is a great example of how these courses allow people to et a better understanding of themselves as business owners, along with a clearer sense of where they're going and how they'll get there.