News & Notes

Best Business Plan Award Announced

Rhythm Mfg.'s business plan to create custom snowboards and skateboards from deck to nose to tail to rail, won the UAlbany School of Business Best Business Plan Award at the 4 th Annual Professional MBA Research Forum on May 4.

The Rhythm team beat out fellow evening MBA students' entrepreneurial approaches for a variety of serious products: a wind farm in Mexico, high-end audiovisual systems, airline flight arrival time software for business travelers, and home health care for seniors in Boca Raton.

How does a plan for snazzy athletic equipment carve past the competition? According to Bob Schwartz of the Schwartz Heslin Group, it was their deep understanding of the Generation Y marketplace. Schwartz teaches “Creativity and Entrepreneurship” at the UAlbany School of Business with colleague Fred Buse. Schwartz said, “It was exciting. This year, the five business plans created were the best ever.” His 20-year-old investment-banking firm headquartered in Latham has sponsored the contest for the last ten years and provides the $500 prize.

Wesley Fink is a boarder and the mastermind of the plan, according to fellow team members and working professionals Kristina Sandberg, Kimberly Saroney and Aruna Subbareddigari. Though Fink was too young to catch air when Schwartz Heslin was founded, his vision of design-it-yourself snow and skateboards caught Schwartz and Buse's attention.

Rhythm Mfg. is reaching out to Gen Y, the under 24 cohort who want to make a statement with the products they buy. Subbareddigari explained, “Customization is a direct advantage to us. Customers design their own colors, sizes and designs. We're more flexible.”

Four-season web-based ordering is key. Fink said, “We want to be the Dell of skateboards.” Like Dell, the customer pays upfront and designs his own product. Skate and snowboards can be sold the same way. “Board companies,” Fink said, “are fundamentally flawed because they're working off a traditional distribution process.”

Conventional manufacturers have costs attached to distribution, a large material inventory and huge commissions. They design, manufacture and ship the product preseason, leaving no opportunity for in-season on-the-spot innovation or customization, the key to reaching the Gen Y demographic. Fink said, “Personalization is a requirement of the sport.”

Gen Y puzzles many manufacturers. Fink said, “No one can figure out how to market to them. Traditional advertising and marketing does not work. Mountain Dew works because they market at events.” The grassroots-marketing plan takes the snow and skateboards to the slopes and parks in the Northeast, “Because there's lots of people there. People who like to buy.”

Gen Y wants instant gratification, so the boards coast from order to mailbox in 10 days. Close relationships with suppliers provide just-in-time access to parts.

According to Subbareddigari, there are risks associated with the plan, “We are assuming that people will welcome a new change, creative ideas. We assume that Gen Y interest will be intact (into the future).”

Fink said that technology has made low customization feasible and the growth of these action sports, over 60% since 2001, provides a growing customer base.

But overall, the pseudo company expects a soft ride. Low inventory contributes to low overhead, as does low payroll. Fink notes that Burton, the premier snowboard company, employs only 400.

The plan estimates that Rhythm Mfg. will break even in September 2006. Fink said, “They are optimistic numbers because we're entrepreneurs and that's what we do.”