Zigzagging with Osprey’s Founder and Owner Mike Pfotenhauer

January 28th, 2014 by Rich Christiansen

Rich: Good morning everyone! I’m really excited today. I’m at my favorite trade show of the entire year. Of course every high-altitude climber has to say that, but this is Outdoor Retailer. I’m here with Mike Pfotenhauer. Did I say that right?

Mike: Yes, that’s how you say it.

Rich: This is one of my favorite backpack brands and one that I’ve been watching for a long period of time. It’s Osprey. I’m not sure how many of you know Osprey, but Mike is the founder and owner of Osprey. I love this story and so for today’s post I’ve asked Mike to spend a couple of minutes to share with my group, if you would, of how the brand came to be and the transition from Vietnam to Colorado, and just what is happening with the brand now.

Mike:
Sure. Well, our brand is now forty years old, so back in 1974 I started a company back in Santa Cruz, California. I was fresh out of the University of California at Santa Cruz. I didn’t really want to work for anyone else so I started building backpacks. It was mostly bicycle packs and backpacks and customers would come in and I would do a custom fit. They would have to wait about five or six weeks before the product was ready, but they were happy to wait because it was custom made for them. I did that for about ten or twelve years. When I got married and my wife said, “I think you need to move up to the next level” we started wholesaling. We tried to wholesale and build product in Santa Cruz, but everybody wanted to surf so we moved our company to Colorado. In 1990 we moved our company to the Four Corners of Colorado, built our production up pretty quickly there, and we grew to about a hundred employees, mostly Navajo, local people who really knew how to sew well.

Of course at that time we were having to deal with the fact that all our competition had moved offshore. We did everything we could to keep the production in the U.S. but it was a losing battle so we moved production to Vietman. I loved building product. I was a little jealous to see people doing it besides myself so I told my wife, “Let’s move to Vietnam.” She agreed. The family (two kids, my wife, and I) moved to Ho Chi Minh Saigon. We lived there for four years and set up an operation, and introduced our product into the factories there. It was very successful. I think it’s a great model for how to build product because you can be hands-on and transfer your design concepts. I still do all the design with a bit of help from other designers in our company and moving it into production is the key where it can really go wrong. So we’ve got thirty-five people in Vietnam to make sure the final product is dialed and done correctly. I travel there often.

Headquarters still remain in south-west Colorado. I have a design office in the Bay Area of California so I’m traveling back and forth from Vietnam to Colorado and it’s still fun. I still love designing product, watching it being built, making sure it comes out right, and seeing it on the backs of people going all over the world doing all sorts of crazy things.

Rich: That’s awesome. I love that story. Curtis, would you turn around and show off some of this beautiful product for one minute? Wonderful. Alright, here is the closing statement. We’ve been talking a lot the last couple of weeks about the value equation. Intellectual Capital plus Relationship Capital equals Financial Capital. This is the key example of that. Again, smart Intellectual Capital done in a proper way created a very successful business. I’d really like to point out that it’s key when you really start scaling out in the business and you shift your distribution or you shift your manufacturing that’s a real sensitive spot to watch carefully.

I’m so impressed by what you’ve done here. You have a beautiful company and we’re making a deeper commitment to Osprey at this point and look forward to the great things that are to come. Congratulations to you.

Mike: Thank you very much, Good to meet you.

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