by Elaine Davidson
"A tiger hunts best when he's hungry," proclaims Nike founder Bill Bowerman. "Like that hungry tiger, Dynastream was highly motivated. Our hunt was challenging, thrilling, exhausting and rewarding," answers Dynastream vice-president of marketing Vicki Brilz.
Where better to sell the invention of a high-tech gizmo for serious runners than to sports and fitness giant Nike? Dynastream Innovations, a small start-up based in Cochrane, broke the tape and won the ultimate prize of a multimillion-dollar deal with the swoosh company to bring its invention to market. It took a good idea that solved a problem many others had tried and failed to accomplish. But more importantly to "just do it" took focused, driven and smart marketing with a healthy dose of sweat and perseverance.
"We had a strong belief it was going to go from the beginning," says Dynastream's vice-president of marketing Vicki Brilz who quit her IBM job to help start the company. The marathon challenge was to take the prototype to the right people "who are literally bombarded by ideas" and to be taken seriously, she adds.
On your mark
Dynastream's President Kip Fyfe says, "A lot of people have tried and failed to make a device to accurately measure a runner's speed and distance. We knew the idea was great and that we could make a go of it."
Kip's brother Ken Fyfe, a University of Alberta mechanical engineering professor, invented a shoe-mounted sensor device that calculates-in real time and with at least 97% accuracy-the speed and distance travelled by walkers and runners. Unlike the notoriously inaccurate pedometer, (which counts strides and determines distance based on an average stride length) Fyfe's invention is a proprioceptive or "smart" device. The data from the shoe sensor is transmitted by radio waves to a specially designed watch, which gives runners instant and accurate digital feedback on performance. The product's accuracy is possible because it actually tracks the motion of the foot through its stride.
The device makes so much sense-why had no one invented it before? Dynastream's president Kip Fyfe explains that it was the advent of vehicle air bags that paved the way. Air bags are deployed by small accelerometers that measure deceleration. Before the air bag, existing accelerometers were too large and required too much power. The accelerometers in Fyfe's invention use sensors smaller than pinheads and require only two AAA batteries for power.
It was a long run from Fyfe's five or six years inventing the technology, which was patented in 1995, to the formation of Dynastream in December 1998, to the Nike deal sealed in the spring of 2000. The company's pace has since picked up to a sprint with the first Nike-branded product selling in the U.S. before Christmas 2000 and here in Canada this spring.
"Ken tried to market the technology through the university but that just didn't work," says Kip Fyfe. "It was decided that the best way to take it forward was with a prototype. Dynastream was formed to develop the product and put in the effort and take the risk to get it to the manufacture stage."
With specification sheets and prototype technology, Dynastream went about marketing "from four or five angles," says Brilz. The company did the trade show circuit and Brilz spent countless hours knocking on doors in pursuit of "the foxes-the people in a company that can make decisions. It was a matter of networking and pursuing every hunch to find the forces in a number of different departments of the companies we were pursuing."
There was a lot riding on the marketing efforts. Dynastream invested more than a million dollars to develop the technology to a stage that proved the concept and demonstrated that was realizable for the commercial market-all of it financed by Dynastream founders and investors.
Fortunately, the invention drew a lot of interest, which gave Dynastream some strength when it came to talking to Nike who proved to be its most serious and ultimately successful suitor.
Fyfe says acting like a big, professional company, which meant spending big company money, in pursuit of a taker for the invention, was also a success factor in the marketing process. "Most start-ups don't have enough cash," he says. "We separated ourselves from the outset by being professional," Fyfe says of the family-and-friends-funded enterprise. "That's what it takes to bring a product through to manufacture. When we were negotiating with Nike, they might phone us on Tuesday and ask us to come for a meeting in the States on Thursday. Without blinking an eye, we would go. And there are no cheap flights to be had when you book two days in advance."
Brilx says that Dynastream s management thought all their business decisions through carefully from the beginning because they were so confident they would succeed. "We researched our company name and URL availability right at the beginning so that we could be Dynastream.com and not Kip@home. We knew our name was equity and we didn't want to be changing anything part way through."
Another key was the company's sell, design, build approach, Fyfe says. Rather than spending countless hours and money on developing the invention into a final saleable form, Dynastream worked with specification sheets and prototypes. "We put the brakes on the engineering until we could find a customer which was a lower risk approach."
"We originally had planned for the sensor to be mounted in the heel of the slice," Fyfe says. "Nike would phone us up and say 'how about putting it on the shoelaces in the front. Come down in a month and show us. We always responded quickly and this was pivotal."
Albert Shum, Nike's Techlab division business director in the world headquarters in Beaverton, Oregon, fills in the other side of the equation. "Nike always had an interest in the area of the convergence of sports and technology and we had been evaluating new technology tor some time. We had made an exhaustive search for the technology for a device to measure how far and how fast a runner was going. We looked at GPS and a number of other ideas.
Dynastream was one of the few companies with patented technology to meet this need and in the end we felt they had both the best technology and the best team.
"For a start-up company, their expertise is amazing. They are very focused, their people have good backgrounds, and they had the technology and the ability to produce to meet our quick time to market," Shum says.
Nike's Techlab product line manager James dark says Dynastream was "refreshing" compared to many other start-up sport technology companies that Nike had considered. "In Silicon Valley, there is a lot of hype. Dynastream was not a hype company, 'they had the focused approach to get it done and done in only 12 months to market."
And the winner is... Dynastream
Once Nike and Dynastream reached an agreement, the process to ink the business deal began. "We were in shock," says Fyfe. "Our little team had to go through several rounds of Nike teams. We worked with the technical people, their boss, the lawyers, the production teams and so on. Our small team had to get through all that. Again, we went in with a good business approach."
Dynastream held onto the manufacturing of the boards (built in Calgary) that make up the guts of the shoe sensor device. "Licensing a technology without manufacture can get very tricky. By holding onto the manufacture we can ensure the integrity of the product, control production and guard our trade secrets, "Fyfe says.
Something that did have to go was granting Nike exclusivity to the technology for the walking and running market. "It would have been nice to not have to give that up," says Fyfe. "If we had been a bigger company, we might have been able to retain our rights in this area. But that's part of the rules of the game with a start-up like ours."
Fyfe says that Dynastream is now working on adapting and diversifying the technology for other markets such as the medical community, other sports and games, motion analysis for health and labour groups, smart security systems, mapping and guidance systems as well as working with Nike on other projects still in the development stages.
While Dynastream had to give Nike exclusivity to close the deal, it did manage the rare coup of having its name imprinted (albeit almost microscopically) on the sensor of the product, Nike's sdm[triax 100 (sdm stands for speed distance monitor). "It's relatively rare for Nike to do this," says Shum. "Dynastream deserves the credit because they developed the fundamental core technology."
With the business deal in place, the race to deliver on its promises began for Dynastream. The sdm[triax hit American specialty running store shelves in time for Christinas 2000, which was a major achievement for Dynastream. The company was put to the test to meet a fall 2000 deadline to have the first commercial run of the technology manufactured, tested and shipped. The order, in the thousands though Dynastream is reluctant to divulge exact numbers, was shipped out in October.
Meeting that deadline meant many nights crashed out on the Dynastream office's couch for vice-president of engineering Jim Rooney. "It was a really crazy time for us," he says and that's understatement. From May to that October delivery, the product underwent a major systems change, the technology was reduced in size and moved from a prototype to commercialized and ready for production. "And, this was something that nobody had done before," says Rooney. "There was no one to call to discuss it with and nothing to take apart and work from. Our small team was breaking new territory."
"It was so rewarding to see this technology progress from a concept here at Dynastream, to be packaged product on the shelves bearing the Nike swoosh," Brilz says. The company's satisfied investors were also delighted with their Christmas gift of the finished product, she adds.
The deal has left product marketing in Nike's capable hands. With its expensive price tag (about $400 Cdn), the units are being sold to serious runners and walkers who shop at running stores. How many will that amount to? Dynastream believes that the opportunity for SDM market is much larger than the Heart Rale Monitor market, estimated at between two million and five million sold annually.
Marketing of the product includes demonstrations and training at these specialty stores, a print campaign in sports and fitness magazines and "seeding" the product with running clubs and athletes.
"The sdm[triax is selling well," Clark says. "Of course I can't give you exact numbers, hut it's ramping up nicely, meeting expectations and moving itself. Retailers are really excited."
When the sdm[triax 100 hits Canadian running stores and Nike stores in Canada this spring, the marketing campaign will follow the U.S. model, says Nike Canada's general manager of equipment 'led Biglow. "The main thing will be hitting the grass roots level at races, running clinics, through running clubs and athletes. With this type of product we depend a lot on word of month after we introduce it to the running community."
Sandy Jacohson of Rdmonton, ranked fourth in Canada in the women's marallion event, is one ol llie elite-level athletes giving Dynastream's technology a whirl. She recently took the device with her to a high-level training camp in San Diego called Discovery USA.
"I'm running 117 to 130 miles a week and find the sdm[triax to he a great tool for training." Jacobson says. "Everyone is bor rowing it to give it a try. In addition to accurately measuring the distance I'm running, it gives me feedback to help me sustain a pace. It is proving to he a very valuable tool both at my level and for the recreational runner and walker."
Dynastream's marketing efforts are paying off and the company is definitely off on the right foot, sensing device firmly attached. "Nike gives us a lot of credibility and is helping us prove what we are capable of doing," Brilz says. "Nike, of course, also means volume (of sales)."
Dynastream's first marketing triumph may be attracting attention but it's not prompting any moves from its Cochrane home. "Our market is global," Brilz says. "It doesn't matter where we are located but it sure matters to us. It's a lifestyle choice. We all really like it here close to the mountains."
Fyfe adds that Cochrane has been very receptive to Dynastream, "even it we are out of tile norm for the town." Residents are even learning to watch the sidewalk in front of the very un-high-tech-looking Victorian-style Dynastream office for runners testing (lie device against a pre-measured distance.
"It's been a lot of fun doing this," Fyfe says. "We plan on continuing research, development and manufacturing and aligning -S ourselves with strong marketing and distribution partners like Nike to achieve our overall vision."
Though Dynastream gave Nike the exclusive right to license its technology for the walking and running market, the company is now working on adapting and diversifying the technology for other markets such as the medical community.
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