Submitted by: Submitted by ronyjones
Views: 10
Words: 737
Pages: 3
Category: Business and Industry
Date Submitted: 11/12/2015 05:42 AM
Hw 13
Big-Box or Specialty Shop?
Lance Fried is an electrical engineer who loves to design
new products. He and a buddy were watching surfers and
scenery at the beach near his home in Del Mar, California,
when the buddy dropped his 20 Gig iPod into a cooler full
of water and ice. The trashed iPod gave Fried an idea—to
make an MP3 player that would work underwater.
Fried spent months tinkering with his invention, a waterproof MP3 player designed specifically for athletes who
need tunes while surfing, swimming, waterskiing, or snowboarding. Like most all entrepreneurs, Fried had invested his
personal savings but he had also somehow convinced half a
dozen friends to work for him for free (pretty smooth).
By August 2004, Fried finished a working prototype.
It was lightweight (40 grams), with a 40-hour battery and
lots of memory (for 2004). The headphones wrap tightly
around ears, and all of it is waterproofed using a proprietary technology. He projected to sell the units for $180.
It was then that Fried brought Greg Houlgate into
the story. Houlgate was a friend who served on Freestyle’s board and had worked as a sales strategist for a
number of large sporting goods companies, including
Callaway Golf. Houlgate showed the player to some of
his contacts in the big-box retail world. “I’ve never had
such a quick and positive response on any consumer
electronics,” he says.
Lance was amazed when Houlgate told him that
major retailers—including Best Buy and Bass Pro Sporting
Goods—wanted to put his gadget on their shelves sideby-side with players by giants like Apple and Sony. Fried
knew that such a deal with just a single big chain could be
worth an instant million dollars in revenue.
But the idea also scared him. Distribution via mass retailers had never been part of the San Diego start-up’s plan.
Instead, the idea always had been to start small, selling
through specialty shops. A big-box strategy meant a whole
new...