Steamboat Springs and the Dispersed Future of Outdoor Gear Brands
How increasing access to design and manufacturing resources may accelerate the proliferation of smaller, dispersed companies in the outdoor gear industry
Steamboat Springs, Colorado has been featured in a wide variety of articles highlighting great ski towns in the Rockies. Whenever the town is mentioned in popular media outlets like the New York Times, you’ll often see a stream of responses in the comments section describing how the town is actually a terrible place to visit and no one should go there (or come here, depending on the commenter). And I agree with them. I’ve spent a lot of time in Steamboat the past decade or so, and can definitively say that Steamboat is a terrible place to visit in the summer and especially the winter and no one should go there.
If you do end up spending some time in Steamboat, you may be struck by the quantity and quality of the local brands— small and large companies that either got their start in the town, or are still headquartered there. The list of successful companies born in Steamboat covers a wide variety of outdoor-related products from sports nutrition to sleeping bags to gravel bikes. All the companies seem to be formed from personal or local need and desire. If you’re involved in any outdoor or endurance activities, it’s very likely you’ve heard of one or more of Steamboat’s companies, which include:
Smartwool (Wool clothing)
Honey Stinger (Sports nutrition)
BOA (Gear fit system)
Big Agnes (Sleeping bags & backpacking gear)
MOOTS (Titanium bikes)
Town Hall Outdoor Co (Outdoor gear)
BAR-U-EAT (Bars & ‘Bites’)
The list could go on and on.
Many have already dissected the seemingly anomalous success of companies from the town. Steamboat has a lot of tailwinds propelling the success of its residents and their companies. I wanted to quickly highlight some of these unique factors driving the entrepreneurial success of Steamboat, but spend more time discussing factors that are shared with most other towns (i.e. are not unique). These shared elements paint a very interesting picture for where the outdoor gear and related markets could be headed in the near future.
Before jumping into the details, I did want to highlight that chance could definitely be a non-negligible factor in Steamboat’s prolific business output. If you consider that there might be ~25 “ski towns” in Colorado, the odds of multiple once-in-a-generation companies coming from a single one like Steamboat are incredibly low, but certainly not zero. Crazier things happen in March Madness every spring. I’d also note that there are loads of examples of successful companies both large and small from ski towns elsewhere in the US including Stio, Teton Gravity Research, and Melanzana, just to name the first few that come to mind.
But returning to our thread— here the major unique elements that bolster Steamboat’s business “forge” (or so to speak like a startup incubator):
The town is close to the Yampa Valley Regional Airport in nearby Hayden. It’s the 4th busiest mountain-town airport in Colorado and can accommodate larger planes like 737’s and a320’s which bolsters both travel and supply chain access for Steamboat and the surrounding towns.
Highway 40 cuts directly through the town, and while the highway is not as large as I-70 and others in the state, it still accommodates standard semi trailers and some oversized loads. This enables reliable, low-cost domestic shipping straight from the town.
Steamboat Springs has a permanent resident population of over 13,000. This doesn’t sound like a huge number, but the town is about twice the size of Aspen and Breckenridge each, and about thrice the size of Winter Park. Jackson Hole, WY sits around 11,000 residents and Park City at 8,500. These numbers cast the prolific success of Steamboat’s companies in even more impressive light, but also show Steamboat’s advantage rooted in its larger local population. (side note, Wikipedia’s population information is very well organized)
Paired with the higher population is two conjoined factors. First, the town has established a strong environment for entrepreneurship and similar to the desired effects of a startup incubator, an infectious environment can often lead to what I’d call a virtuous cycle of inspiration and innovation. Second, there seems to be a fair amount of either permanent or temporary wealthy locals who are extremely invested in the success of the town, its surroundings and its residents. This can often manifest in investments in local companies or housing developments and other projects.
Finally, a smaller-but-potentially-underrated reason Steamboat has been so successful is that the town hosts multiple relatively large events for a variety of endurance sports, including SBT GRVL for gravel biking, and Run Rabbit Run for ultramarathons. Major events like these simultaneously expose droves of athletes and fans to the local companies, and also let those companies test products and bounce ideas off a ton of actual users very quickly, both of which have major benefits.
Beyond this unique concoction of features driving innovation in Steamboat, though, I also believe that the type of innovation and company success seen in the town can be replicated outside of it, especially for outdoor gear and sports nutrition companies. The outdoor gear industry has seen a rapid democratization of the tools and supply chain means to start a company within the space. It’s easier than ever to start your own hardware business and enter a consumer market. More broadly, there are recent proof points that new players in the industry can grow and thrive despite stiff competition from existing players and consolidation of brand ownership. Montréal-based Ciele and and Wyoming-based Stio immediately jump to mind.
To me, some of the more salient tailwinds at the back of all new brands in the outdoor gear industry are:
Increased accessibility of computer-aided design (CAD) software via ease-of-use and pricing. Most people think of Solidworks or Autodesk exclusively when they think about CAD, but other tools like KiCAD (printed circuit boards), Procreate (raster graphics), Adobe Illustrator (vector-based design), and CLO (clothing design) are making professional creative and technical design much more affordable. In combination with a wealth of online tutorials and improving user interfaces, these tools are making it easier than ever to design modern hardware products.
In addition to the proliferation of accessible design tools, raw materials and prototyping equipment are easier to access than ever. I can’t imagine how difficult it would be to source technical fabrics or specific polymers for testing and prototyping in remote locations 25 years ago, but websites like Ripstop By the Roll and McMaster make it simple to procure materials for prototyping and testing (though often not cheaply). In addition, there are numerous prototyping houses like Xometry and Protolabs that can machine and manufacture parts on quick turnaround, and many prototyping tools like 3D printers and laser cutters have brought more capabilities “in-house.”
Strong technical and business talent is becoming more dispersed around the country, especially to areas where it is simply nice to live. While the COVID-19 pandemic accelerated the trend of fully remote work, which increases access to talent from any location, it also seemed to physically disperse engineering, business, and marketing talent more as well (though some of this is reversing). More than ever before, people with “white-collar” jobs are moving to places they simply enjoy living, which will naturally lead to more lightning-in-a-bottle combinations of ideas, motivation and skillsets in smaller towns like Steamboat. Relatedly, a lot of tech-related employees seem to be more drawn towards job applications that align with their own passions, which also increases the number of companies in industries like outdoor gear and sports nutrition.
The internet has shrunk the world, which means that companies can access customers and mass manufacturing more easily. It’s easy now to create a website and directly reach customers through apps like Instagram, Reddit, and TikTok. Companies really can drive inflection points in sales if they happen to become the hot thing within a given sport or industry in online communities. The same companies can also easily access both domestic and overseas manufacturing and assembly partners. While it can be extremely challenging to set up new suppliers without much experience, it can certainly be done, which enables brands to scale up more quickly and more cost-effectively than ever before.
Last but not least, there is also a general momentum behind shopping locally or with smaller brands, eschewing larger companies that have perceived poor business practices or growing technical issues. Small Business Saturday is now a yearly staple in the holiday shopping calendar, and I believe, especially in smaller communities, that people want to support their local businesses at slightly higher costs, even ones that are beginning to grow beyond the boundaries of their town.
So, all the information is good and all, but what does this actually mean for the outdoor gear and related industries? What happens relative to where are now and where we seem to be heading? All great questions that I’ll summarize my answer to in one sentence then expand further below. In short, I think we will see a relatively sharp increase in the number of competitive brands across most outdoor gear and equipment markets that will slowly tail off through consolidation and competition, leaving us with many more stable brands than we have now, especially in larger markets.
I am notably making two major assumptions: 1) that ease of entry into a given product market naturally correlates with the number companies in that market, and 2) when the ease of entry changes significantly (as has happened in the last couple decades), you see a period of expansion then retraction in the market to find a new equilibrium point. If both assumptions are true, then the number of companies in a given market over time starts to look like a Gartner Hype Cycle curve (or an endergonic reaction for all my Gibbs free energy fans out there).
My third assumption based on the information dissected above is that for the outdoor gear and nutrition markets, a lot of the growth will be realized in areas where the local needs for these products are great (like ski towns), and the change in ease of entry is greatest (also like ski towns). This means that we could see outsized growth in these industries be driven by smaller towns and rural communities around the country.
There’s an open question as to how many companies can viably be sustained in each individual market. The ski jacket market can likely support many more viable companies than the curling stone market, for example. There will obviously be some maximum limit within each industry, dictated by the existing SAM (serviceable addressable market) and the amount of organic growth driven by the increase in number of companies. As part of their now public performance disclosures, Arc’teryx publicized a 65% Y/Y revenue growth from 2022 to 2023, which may be somewhat of an outlier on the high side, but still representative of the strong growth of outdoor gear sales in recent years.
Convergent Product Design & The Marathon Du Mont-Blanc
At the end of June, I was lucky enough to travel to Chamonix to watch my wife run the Marathon Du Mont-Blanc trail race. The lead up to the race involved a taper-killing (or boosting) mix of mountain bikin…
We’re already starting to see an explosion of the number of companies within outdoor gear markets seizing upon the overall growth and ease of entry. I wrote about how there were over 20 brands at the Marathon Du Mont Blanc all selling nearly identical hydration vests, and there were even more sports sunglass brands there too. I expect that these trends are mirrored in nearly every outdoor-related market right now, and the immediate impact could be that when you go to your favorite mountain town or outdoorsy city, you’ll find one or two new brands from the outdoor gear, sports equipment, or nutrition markets that were recently founded right around the corner.
This period of growth may inevitably lead to a fair amount of acquisitions and mergers (especially if private equity firms are seeking replicate the success of Amer Sports and others). It may also lead to a natural re-equilibration of the overall outdoor gear industries, with more companies than we have now from more geographically diverse sources— all-in-all combining the current trends of cross-market consolidation with a major uptick then correction in the number of companies competing for customers.
Remember! Steamboat stinks, and stay tuned for next week’s Newsletter.