To compete with giants, choose your niche - women's athletic footwear company, Ryka Inc - Column

Nation's Business, July, 1992 by Sheri Poe

Like many entrepreneurs, I risked everything to start my business. I leveraged the house, and I borrowed money from family and friends. In effect, I put my entire life on the line.

But in creating Ryka, Inc., a women's athletic footwear manufacturer in Weymouth, Mass., I was so sure of my gut instincts that I never really considered that I was venturing into the land of giants. If I had, I might still be working for someone else.

Competing with billion-dollar companies is scary, but not impossible. By offering seminar products and focusing on the most cost-effective ways to reach a target market, an entrepreneur can carve out a niche that the big guys have overlooked.

The other athletic-footwear companies--you've seen their television commercials--were making athletic shoes for women when Ryka was nothing more than a set of design sketches and a business plan back in 1987. Investment bankers called us insane; the big shoe companies would stomp us right out of business.

But I knew that the big companies didn't offer what I was looking for in a shoe. I had tried virtually every brand during years of working out, only to suffer severe lower-back pain and knee problems that were actually being caused by my sneakers; my feet were killing me.

At that time, women's athletic shoes were sized-down versions of men's; but a woman's body is obviously different, and when she's not wearing shoes designed for her physiology, the constant pounding of a workout will make her more likely to develop nagging injuries.

When other women told me they were experiencing the same pain, I knew there was a market.

What Ryka developed was a fitness shoe built specifically for a woman, a patented design for better shock absorption and durability. By the end of the first trade show we attended-sponsored by the Sporting Goods Manufacturers Association in March 1988-we had orders from several national a shoe retailers. During 1991, our annual sales grew 70 percent, to $8 million; we expect similar growth this year.

While it was a victory to get shoes to market, that was only the beginning. As a new manufacturer in a big industry, we had a realistic fear that established companies would target us and market us right out of business.

In any industry, the key is to have a strong niche; that way, if anyone copies the product, yours will still be viewed as the original. Staying a step ahead as the megabucks companies attempt to invade your niche is essential to long-term success in a crowded market.

At Ryka, we learned the hard way that it was impossible to challenge the name-brand manufacturers on all fronts. Ryka started with shoes in all categories--running, tennis, and so on. We cut back to aerobics shoes because we wanted to stay focused and didn't have the budget to build several different markets at once. We have since--very slowly--returned to other niches.

We realize there's no competing with the big companies' advertising budgets. Instead, we've created a grass-roots advertising strategy designed to catch prospective customers without necessarily getting a lot of attention from a more general audience.

In our business, Ryka is unique, a company run by a woman fitness enthusiast making shoes especially for women. But the fact that I sign off on every new design isn't what sells the shoes. A combination of product and marketing brings in new customers.

Our celebrity endorsers are women fitness instructors and personal trainers, people who form what we call the "Ryka Training Body." That group numbers more than 40,000 women who receive product information four to six times a year; they receive discounts on shoes--we don't give shoes away-- and we wind up with thousands of students who want to wear the same shoes as their instructors.

Women aren't so influenced by celebrities in ads; they want something that feels good on their feet. If an instructor likes our shoes, pays for them herself, and goes out of her way to wear them, the student is going to want to wear them, too.

In addition, the Ryka Training Body provides us with feedback directly from our target audience, a response that helps us design new styles and continuously improve the product so that the big companies can't catch up.

Ryka doesn't need to be one of the giants to succeed. To make it, we need to maximize our ability to perform within a large industry.

Sheri Poe is founder and president of Ryka, Inc., a publicly traded women's footwear manufacturer in Weymouth, Mass. She prepared this account with Nation's Business Contributing Editor Charles A. Jaffe.

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