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Fueled by local connections

Fueling a vehicle with natural gas is not currently convenient or cost effective. But Onboard Dynamics is hoping to change all of that. And that could be a billion-dollar idea that changes the future of transportation fuel.

“The idea is natural gas compression onboard vehicles,” said Rita Hansen, CEO of Bend-based Onboard Dynamics, Inc.

“We are only four months into really launching the company, working through our milestones, doing the technology development, and making sure that we come up with a commercially viable product in 18 months.”

The spark

Chris Hagen, an assistant professor at Oregon State University-Cascades and the chief technical officer of Onboard Dynamics, has developed a natural-gas refueling system for vehicles. An internal combustion engine is modified so one of the cylinders is dual purpose: It can power the vehicle and also compress natural gas coming from a low-pressure supply line at a home or business and send it to the fuel tank to be stored for later use.

Hagen, who previously lived in Colorado, developed his idea as a response to a funding announcement from the U.S. Department of Energy/Advanced Research Projects Agency-Energy (ARPA-E). ARPA-E was looking for technology that would move the needle on transportation fuel, reducing the dependency on gasoline and diesel. He submitted his idea and received $700,000 in funding, which ultimately grew to $1 million, to build a proof of concept to show natural gas compression onboard a vehicle could work.

About a month later, OSU-Cascades hired Hagen.

Finding a natural fit

Natural gas, a clean-burning alternative fuel made predominantly from methane, has a number of advantages as a transportation fuel including its domestic availability, widespread distribution infrastructure and low cost, the U.S. Department of Energy’s website states.

Only about one-tenth of one percent of natural gas is used for transportation fuel, according to data from the U.S. Department of Energy. Roughly 150,000 vehicles are powered by natural gas in the United States and there are just over 800 public natural gas refueling stations.

The issue was not Hagen’s technology. It was the ability to commercialize that technology.

“Hagen was hitting the ball out of the park on the technology side, but he needed help commercializing it,” Hansen said. “ARPA-E does not want to fund science projects. They actually want to see if there’s a way to get it into the marketplace.”

Because Hagen was new to Bend, Deschutes County Commissioner Tony DeBone suggested Hagen reach out to Economic Development for Central Oregon for help. Jim Coonan, the EDCO venture catalyst manager at the time, gave Hagen a list of names from his stable of experts in energy and engineering and Hagen started making calls.

Hansen and Jeff Witwer met with Hagen to help bring his concept to life.

“Our number one goal in the beginning was to help Chris get back on track in the commercialization effort,” she said. “At the time we weren’t thinking about starting a company.”

Gaining momentum

In June 2013, Hansen, Witwer and Hagen gathered with a number of experts in the industry to hold a business strategy planning session. Using the lean startup model, they brainstormed to determine the right business model, who the target market would be, how to launch the technology, and what resources they would need.

Onboard DynamicsIt was after that meeting Hansen and Witwer fully realized the potential of Hagen’s idea. In August they formed a team, named the company Onboard Dynamics, and applied to the Bend Venture Conference – which is now one of the largest angel-investment conferences in the Pacific Northwest.

The ARPA-E program director met with the team the day before Thanksgiving 2013, outlining a path to more potential funding to help take Onboard Dynamics to the next level.

“I thought he was talking like hundreds of thousands of dollars and he was talking millions of dollars,” she said.

Pouring fuel in the tank

At that point, Hansen said Onboard Dynamics realized it had potential access to significant funds through the ARPA-E program to really launch the company based on the success of Hagen’s work. The funds would allow Onboard Dynamics to create a commercially viable product.

“What they realized is that we were still not fundable. We couldn’t go out and raise traditional capital because there were still so many risks. All we had was a proof of concept,” she said. “We weren’t looking for seed money, we were looking for significant funds for continued technology development. Traditional capital funding sources are conservative and don’t typically fund at that stage.”

Over the next five months, Onboard Dynamics/OSU worked on the next generation of the technology and the presentation pitch for the additional funding from ARPA-E. And on April 8, the company received a phone call from ARPA-E announcing Onboard Dynamics had been selected for a new award of $3.6 million total.

ARPA-E agreed to put in 80 percent, $2.88 million, but Onboard Dynamics had to come up with the other 20 percent of the award.

“At this point … I knew I needed to go out and find $720,000,” she said. “And that’s where Oregon comes in.”

Weathering the storm

Hansen said she had been discouraged every day by rejections because the company wasn’t developed enough. But she knew in order to fully launch Onboard Dynamics and its technology, she needed more capital.

“We’d already been pitching and had gotten no’s, no’s, no’s from other private sources,” she said. “I don’t know how many rejections I’ve gotten … too many to count.”

RefuelingHansen kept going with $3.6 million on the line. She reached out to Oregon BEST, which has a gap funding program up to $150,000, and Oregon Nanoscience and Microtechnologies Institute (ONAMI), which has a $250,000 gap funding program.

“I was being very selfish, thinking I could go after both of those; and I did,” she said. “It was the first time that they actually came together at the exact same time to invest in a company.”

But Hansen had to go through a few hoops to be able to accept both investments. The rules, established by the Oregon Innovation Council, prevented ONAMI and Oregon BEST from collaborating on their funding. Hansen called up Senator Betsy Johnson. Senator Johnson listened to Hansen’s story and the obstacles Onboard Dynamics was facing and revised the way the rules were written in 48 hours so Onboard could receive funds from both organizations.

“If these two programs didn’t exist I would have never been able to execute on the ARPA-E award,” Hansen said.

Continuing the journey

In the history of ARPA-E, she said this is the second largest award given to the state of Oregon.

“I needed to feel like Oregon wanted this. It would have been easy to walk away,” she said. “I guess I was driven by a sense of accomplishment and having this legacy to say we got this $3.6 million dollar award for the state of Oregon, in Central Oregon no less.”

Hansen said her formula to success has been her tenacity, her ability to pivot, and her network of support throughout the state.

“I always use mountaineering analogies because I’m a climber. You don’t lose sight of the summit, but you may have to change your route when you come up against an obstacle,” she said. “You may have to figure out other ways to get around or overcome those obstacles, but [you can’t] lose sight of what the end goal is and you [have to] stay clear about that and stay focused.”

Tapping every resource

Hansen said her summit was to execute on the ARPA-E award, but she couldn’t have reached that summit without team work.

“I’m a 50-something-year-old entrepreneur, but I still needed help. You have to not be afraid to ask for help and leverage your network and leverage your rolodex,” she said. “Obviously I am very, very proud to have made this happen, but there’s no way I could say I did this alone. I have to credit our entire team for complementing my weaknesses.”

Onboard Dynamics is projected to become a $25 million company in five years, Hansen said. But there are still challenges the startup company is facing.

On the roadLike most startups, Onboard Dynamics is still fundraising and will continue to be as the company progresses. But a bigger hurdle is the company’s loss of its vice president of engineering, Witwer. Due to health reasons he is no longer able to be a full-time member of the team.

“I’m trying to recruit somebody to be his replacement, which is a huge challenge,” she said. “Jeff was in this boat with us for the last 18 months. I talked to this person every day, multiple times a day, and to now not have that person in the boat is a little scary.”

Over the next few years Onboard Dynamics anticipates being able to double its workforce. To date, there are 14 paid employees, contractors, postdoctoral scholars and students working on the Onboard project.

Consistent improvement

Part of Hansen’s goal is to help develop an energy cluster in Central Oregon with Onboard Dynamics serving as one of the anchor companies.

“We have a whole energy engineering department that’s teaching students to do this work,” she said, referring to a program at OSU-Cascades, of which Hagen is an integral part. “Right now [students] have to leave the area after they graduate to go find jobs. That’s not what we want. We want to create an industry here.”

As the region develops its energy engineering industry, she said it will attract more funding and other companies. This will in turn fuel the sector’s growth and place Bend, as well as Oregon, on the map.

“We already have this reputation with the [U.S. Department of Energy] for getting stuff done; coming up with innovation and new ideas and actually seeing them through,” she said. “I was at the right place at the right time for this opportunity. It is a success story. The story is not done yet, but this whole community came together to make this happen.”

For more information, visit http://www.onboarddynamics.com/.

The heart of Dutch Bros. success

When you are selling love there is no limit to what you can expect to accomplish. Selling amazing coffee doesn’t hurt, either.

But perhaps it’s that love that explains the optimism and enthusiasm of Dutch Bros. co-founder Travis Boersma.

“We are uniquely different,” Boersma says. “The mindset of our service is ‘quality.’ And the product is ‘love.’ Love is the product. I don’t know any other company that love is their product.”

He’s got a point, and yet speaking to a guy who built a coffee cart into a $150 million dollar coffee empire, one quickly realizes he is anything but esoteric. He’s serious and enthusiastic—and more importantly, successful. The man sells love and has made millions doing it. Can’t argue with that.

Coffee talk… or not

I expected to talk to Boersma about coffee. Lots and lots of coffee sold in hundreds of franchises throughout seven states all from a hub in little known Grants Pass, Oregon. Still, I can’t help but drill down just a bit on this love thing.

Boersma is happy to provide specifics.

Travis Boersma“What is love, right?” he says. “To me it’s really just demonstrating your heart for the cause. That’s what our people achieve in so many different ways.”

The product of love, he says, is given when a dog bone is ready for the pooch that’s a regular customer just like the human driving the car. Or when the haggard mom who is always running a bit late drives to the window and the Not So Hot Chocolate is already being made for the kids in the backseat.

“It may just be a quick pit-stop, and the customers are in a hurry,” Boersma says. “But it’s a magical experience that can be a positive aspect of their entire day.”

That’s love, Boersma says, and few things make him so happy as to see the mission exemplified by his employees.

Dutch Bros. Creative Director Dan Buck says this focus is far more than just a slogan. It is the measuring stick for everything an employee does.

“Our philosophy, at its core, is just love our customers. And you are empowered to do whatever you have to do to do that,” he says.

Buck says he sees it play out every day, especially when employees try to “play a role” they think the company expects.

“People have a B.S. meter,” Buck says. “We work tirelessly to coach our people up or move them out. We try to truly love each other. We repeat that over and over again. Talk about it, practice it, coach it, train it, preach it, and teach it. We mean it when we say it.”

Few things thrill Boersma more than when he sees that effort filter through his company.

“One of our new managers had a meeting with his crew and said ‘Two things are most important to me: Love on the customers and love each other as a crew,’” Boersma recalls. “That’s all that needs to be said. That was the message. Everything else then falls into place with the recipes and prices and black and white realities we are conditioned to in the business world.”

Born of caffeine

At 21 years old, Boersma was just kicking around the idea of a career about the same time a grunge band from Seattle launched a whole new genre of music. Boersma didn’t know it, but his Nirvana came in the form of cataclysmic change in the local economy that had sustained his family for three generations.

Roasting“Back in the day, before we got into coffee, my family was third-generation dairy farmers,” he says. “My brother and I were in a place that we had to adapt to a change. That meant selling the cows and doing something different. What seemed devastating at the time was a blessing. The objective is to find the seedling of the equivalent advantage and realize it’s an opportunity.”

The opportunity was that coffee cart. The brothers wanted to be near the main shopping center but ended up downtown. It worked. And the original store that came out of it remains in business to this day.

Boersma credits those early years with his brother Dane, who died of Lou Gehrig’s disease in 2009, and his parents with building the foundation for Dutch Bros.

“Mom and Dad demonstrated love regularly,” he says.

His brother, who Boersma still refers to as “the wise man,” mentored him through the business expansion, leading by example.

“He was my brother and business partner and he was my best friend,” Boersma says of Dane. “He exemplified it. He didn’t just preach it. He walked it.”

Growing the love

Together they set a course for expansion that would honor first Dutch Bros.—affectionately called DB by everyone in the company including the founder—core product of love. They are far more than talking points but a real culture, Boersma insists, for himself, the franchise owners, the corporate staff and the barista’s themselves.

Bags of beans“Culture is never-ending journey and a focus of never arriving,” he says. “The customer experience is everything. The employees and people involved in every area of the business are responsible for providing that experience. The coffee is the product they come for, but they come back for the people—the interactions and the feeling. Generally it’s a day-in and day-out experience.”

But for Buck and others in DB, the culture starts with Boersma.

“Whatever you see with Trav is whatever you get,” Buck says. “He happens to be one of my favorite people because he tells you what it is and tells you what he thinks. He doesn’t spin it.”

Observing and borrowing

Boersma points out that he and his brother didn’t reinvent the wheel of a company culture with an emphasis on the customer experience. He adopted models of success that preceded them, including In-N-Out Burger and Les Schwab Tires, among others.

When Les Schwab died in 2007, former Oregon business owner and retired management consultant Joe Sherlock wrote a blog post that captured this unique approach to business.

“How did this remarkable success happen? Les Schwab formulated an ironclad policy that ‘the customer rules’ and built a culture within every employee and every store which embraced this philosophy… The company actually does what every company ought to do,” Sherlock wrote.

Boersma had already long applied those same lessons to DB, much like he adopted In-N-Out’s culture of quality and service.

Business Week writer Stacy Perman wrote a book about the burger franchise’s success, including treating employees generously, keeping the menu simple and focusing on customer experience, all things central to DB operations.

The DB mission

As Perman wrote, In-N-Out burger’s unique focus on controlled expansion has protected the company’s brand and ensured that quality has not suffered. Expand slowly on your own terms with your own goals, she writes, which might as well be the playbook used by Boersma and the Dutch Bros. team.

Dutch Bros lidsBoersma is well aware that the coffee culture of the Pacific Northwest has started to take on across the country. Drive-thru coffee stands are not yet as ubiquitous as they are locally. Yet he refuses to lose the company culture.

“We probably could have sold 1,000 to 2,000 franchises and made a gazillion dollars that would have rode a wave that is typical today in America, but it likely would have crashed.”

It all goes back to mission, he says more than once. Each franchise is a part of the company’s long-term “compelling future” and also part of the same “compelling future” for the owner, the employees and the local community. All have to fit together or the mission is compromised.

“Ten years from now I see a healthy growth rate that is sustainable with our company that’s providing young people a chance to live their dream, inside of DB or outside of DB,” Boersma says.

This explains why the company only sells franchises to employees and protects the territories of its franchise owners. Buck says the company sold initial franchises to non-employees and the impact on culture was profound and immediate. They quickly adapted a policy of selling only to employees. Buck says every day from points all across the country offers to buy franchises come in.

“We just say, ‘with all due respect, no’” Buck says. “We are just not going to do that. We would just be another coffee company. Our culture is our top priority.”

“Fear has no seat at the table”

Having met most of the ambitions he and his brother first laid out back in the 1990s, Boersma does not lack for current challenges nor see significant changes up ahead. The business works, it fulfills his ambitions and his personal mission statement, which has a lot to do with those principals of integrity and character. Asked about threats to his business, he changes the word to change.

“Fear doesn’t get a vote at our table,” he says. “The objective is to adapt to change and be wired into what’s going on in the world, because the world is changing even faster than before. So we have to adapt to change. If you don’t adapt to change then that’s when you can get blindsided.”

Just as the changing world forced him off the dairy farm and into the business of selling love, he is ready for those challenges that will inevitably arise.

“Life happens,” he says.

While some would say he’s “made it,” it’s a flawed concept as far as he’s concerned.

“The most important thing that I don’t think a lot of people realize is a lot of people think if I can get to this point I’ll have it made,” he says. “We see it all around us. They get to that spot and that’s when they become complacent and that’s when they start to descend. They fall into this fallacy of ‘I made it and now I’m going to live this life on Easy Street.’ Easy Street is a lie. The reality is its constant never-ending improvement and we’re going to grow until we depart.”

That’s why the mission continues. He refers to it often and even at one point recites it verbatim without being prompted. It flows from his thoughts as a normal part of the day. “I Travis Boersma…” he begins. As it concludes it says as much about where Boersma has been as where he fully intends on continuing to go. “… defy the odds to be a force for God and a force for good. I hope to meet the man that I am someday when I die, not the man I could’ve been.”

I still didn’t get to talk about the coffee.

For more information, visit http://www.dutchbros.com/, follow Dutch Bros on Twitter, or like Dutch Bros on Facebook.

A turn for the better

You could say the folks at Rolf Prima are reinventing the wheel, but undoubtedly, they’ve heard that one before.

That’s because it’s basically true.

The company, based in Eugene, Oregon, makes some of the most respected specialty bike wheels out there.

In 1997, original founder Rolf Dietrich patented his wheel ideas, including a new paired-spoke technology, which, according to rolfprima.com, “neutralizes the left and right outward pulling forces,” allowing for lighter rims and fewer spokes in total.

eIMG_7940“It started a revolutions in wheels,” says current owner Brian Roddy. “You might say, ‘Oh, wow, it’s rounder,’ but it’s about the weight, the strength, the aerodynamics, the materials … You can save weight to make it faster.”

Dietrich licensed his wheels through Trek in 1997, and the company made them for several years, during which Rolf wheels made their debut in the Tour de France in 1999.

Changing lanes

In 2001, Dietrich’s license with Trek expired, and he decided he wanted to start his own business, possibly in Ohio. He got in contact with three engineers he’d worked with at Trek, who by then had moved to Eugene to work at Burley. Roddy was one of the trio.

“In 2002, when Rolf wanted to start a separate company, the three of us were already here, and we said no to Toledo,” Roddy says.

Eugene it was. That began the era of Rolf wheels being built in Oregon.

Dietrich’s team added some new technologies over the years and began winning notice for them, but not widely.

“In mid-2005, we were best in class, but we were terrible at telling that story,” Roddy says. “We expected people would come find us. We weren’t aggressive. We didn’t introduce new things, and the market changed without us.”

By 2009, Dietrich was ready to retire, and Roddy’s fellow partners wanted to move on, so he bought them out and became the sole owner of Rolf Prima and reconfigured the business.

“In 2009, we refocused on product development as a company,” he says. “But we also spent more energy on making a concerted effort to tell our story.

“Making the best thing in a vacuum turns out to not be a great business practice.”

The company expanded its product lines, adding in 2010 single-speed and CX models and in 2012 all-Carbon Clincher road models, an alloy mountain model and more.

Crafting new wheels

But the keyword in the company’s story turns out to be “handmade.”

“We’re built in the United States, hand-built in Eugene,” says Brooke Stahley, marketing manager. “We’ve been manufacturing in the U.S. since the start.”

As such, they’re not competing with most of the wheels available in the U.S., which are largely made by machine.

eIMG_7920“It’s not just wheel assembly,” Roddy says. “It’s very much a science of getting the tension of the spokes just right. You can just put the parts together and it looks just like a wheel, but try to ride on it, and it’s going to come unglued.”

The people making those minute adjustments couldn’t be more invested in the product.

“Cyclists build our wheels,” Roddy says. “Our builders actually race, and they know, in a group race, you never want to hear, ‘There’s a problem with my wheel.’ ”

The main reason they’ve kept all their production local is to maintain that level of control over their product and its quality.

“In the bike industry, it seemed like all companies went overseas by the mid-2000s,” Roddy says. “We could join the race to the bottom and have the sales get higher, but …”

“We stayed true to ourselves,” Stahley says.

Build local

Forget outsourcing. Instead, the Rolf Prima team has been making strides toward bringing even more of its production processes in-house.

For a long time, they could not find a U.S. source for rims.

“We had a subcontractor in Taiwan, and one vendor was totally messing with it and delaying again and again, and then introduced almost the exact same rim themselves,” Roddy says.

They scrapped it 100 percent and moved on, and then in 2013, they learned of a company that had once made rims in the U.S. that was selling all of its equipment.

eIMG_7915Rolf Prima bought the equipment and moved it to Eugene, and earlier this year, in-house rims went into full production.

“We’d have gladly always made the rims here,” Roddy says, “but we couldn’t before.”

Now, an aluminum extrusion of 15 feet long goes into a roller, and out comes a double circle of metal that will be cut to create two rims.

Another machine is programmed to drill the holes for the spokes, in whatever configuration this particular wheel might need.

“For an all-silver rim, we can do the whole thing in-house,” Roddy says. “Working flat-out, we could make a whole wheel by the afternoon.”

That’s not how it’s done, firstly for efficiency reasons. But also because most of the rims are anodized, a process that takes place outside of their workshop, but nearby at Quality Metal Finishing Inc., another Eugene business.

Nearly every part of a Rolf Prima wheel but the spokes, which hail from Belgium, is U.S.-made.

Bringing another aspect of production under their roof means space is at a premium.

“Our limiting factor now is the ability to store,” Roddy says.

Becoming a bigger wheel in the community

They’re looking for new digs, but staying local of course, while they continue to build their place in the community.

“We’ve been here for twelve years now, and we’ve been the best-kept secret in the bike industry for seven of them,” Roddy says.

But that is changing.

Everyone at the company is an avid cyclist, and they participate in many of Eugene and beyond’s cycling events.

“Engineer Joel is at all the races,” Stahley adds.

Rolf Prima also sponsors a local “factory team,” a training group that wears the company’s gear at events and races under its name, in turn receiving special pricing on wheels.

The company’s story is certainly spreading, as its number of local fans has grown.

“It used to be, we’d see someone in town on our wheels, and we knew who it was,” Stahley says. “Now, we don’t always know.”

But whoever that cyclist might be, they should know they’re invited to come to Rolf and get a look at how their wheels were crafted.

“We’ve gotten lots of support from Oregon bike shops, especially in Eugene,” Roddy says. “We’ve made people understand: This was made here, right down the street. Now we can show them around, and they love that.”

For more information, visit http://www.rolfprima.com, follow Rolf Prima on Twitter, like Rolf Prima on Facebook, or follow Rolf Prima on Instagram.

A harmonious collaboration of people, nature, and business

Tom Bedell is not the stereotypical image of a serial entrepreneur. In fact, he embodies the look of a modern-day hippie, equipped most days with a navy headband and blue jeans. But don’t be fooled. Bedell owns Bend-based Two Old Hippies Stringed Instruments, one of the largest acoustic guitar and mandolin designers and manufacturers in the country.

“Deep in my heart I wanted to have a workshop here in the United States of America where we could design and build our own instruments. And that was my dream,” he said.

On Nov. 30, 2010, that dream became a reality when he purchased Breedlove Guitars in Bend.

“What’s my favorite thing about coming to work every day? I get to design [guitars],” he said. “ I get to go into the wood stacks and pick out pieces of wood and dream about what they might sound like.”

Auspicious beginnings

Bedell started his entrepreneurial journey at the age of fourteen in 1964, the same year The Beatles made their first live American television appearance on The Ed Sullivan Show.

breed 5“The whole world changed in terms of music and Rock and Roll,” Bedell said. “In every town across America there was a garage band on every block. We all had guitars, we had these little amplifiers. Most of us weren’t any good, but it was the lifestyle … It became the beginning of a whole social-change movement … and music was the vehicle to express all of that. It was the way that poetry came to life in everybody’s life.”

Filled with passion for guitars and music, Bedell wanted to become a part of the industry and started importing guitars from Japan.

He turned to his father, who owned a fishing tackle company called Pure Fishing that Bedell would later go on to inherit, for resources. Bedell sent a telex to Pure Fishing’s purchasing agent in Japan. He asked him to go to Hiroshima, the epicenter of musical instruments, and find a source for guitars. The agent obliged, which birthed the start of Bedell Guitars.

“I just went through (the catalogues) and picked the instruments that looked of interest and ordered some samples,” Bedell said. “I didn’t know much about how to price them. So, I just doubled the prices, which meant that I was at half the price of the main businesses that were around then.”

An ever-changing tune

Bedell’s first workplace looked nothing like Two Old Hippies’ headquarters does today.

His sister helped put his brand name on his guitars and he hired a friend with a driver’s license to take him to different music stores to start wholesaling guitars.

“My parents’ basement was my warehouse. My sister was my quality production person. My friend was my driver and delivery guy. And I was the salesman,” he said.

breed1Today, Bedell employs 135 people and leases three different buildings, totaling 50,000 square feet on the east side of Bend off American Loop. He expects his 2014 payroll to reach about $5.35 million and estimates his company will produce about 5,000 instruments next year.

The company sells three brands: Breedlove, an acoustic guitar label that strives to be innovative and has been manufactured in Bend since 1990; Bedell Guitars, 1960s classic-model guitars built using sustainably-sourced woods; and Weber Fine Acoustic Instruments, one of the top mandolin companies in the country, which Two Old Hippies acquired in November 2012.

The acoustic guitar market has been strong for several years, Erin Block, research analyst for the National Association of Music Merchants, wrote in an email.

“Sales increased by 13.3 percent and the number of units sold increased by 2.7 percent from 2012 to 2013,” Block wrote. “When you look at the 5-year trend, sales have increased 54.1 percent.”

Employees first

In nearly four years, Bedell grew Breedlove from 50 to 135 employees. And this year, he said the company grew by 40 percent.

Bedell attributes his success to following his father’s rules of operating a business:

breed 4“The whole reason that we’re in business is to create opportunities for the people that make up the company,” he said. “It’s not about the company, it’s about the people. The reason we are here is to create a culture and lifestyle and opportunities for the people that are our company. It’s not for shareholders. It’s not for money. It’s not for profit.”

If the employees of Two Old Hippies Stringed Instruments come first, Bedell said the company will succeed because everybody will have an investment in the success of the company.

“It’s their life. It’s their lifestyle. It’s how they support their families. It’s how they live,” he said.

When Bedell first took over Breedlove, he said one of his biggest challenges was shifting the company’s culture.

“The culture was very much a hierarchical. It was very much a power culture,” Bedell said. “I wanted to create an entrepreneurial culture where people were empowered, where people felt they could do their best work and be themselves, but yet had a set of values that they shared that had a commitment to one another.”

Like many entrepreneurs today, Bedell started with humble beginnings. In 1966, two years after Bedell ordered his first guitar samples from Japan, he opened his first retail store in Iowa.

“Some of the stores I was selling to weren’t paying their bills, so I would pick up equipment at their store to get a credit,” he said. “I had all of this equipment and then, later that fall, I opened my second store.”

Bedell started going to school half days and running his business in the afternoons and evenings.

“It was a glorious life,” he said. “So, in my golden years, I wanted to return to that wonderful life and become a teenager again,” he said, referring to operating Two Old Hippies Stringed Instruments.

In February of 2009, Bedell and his wife, Molly, acquired a local music store in Aspen, Colorado, and named it Two Old Hippies.

“We just thought it would be fun to run a music store,” he said. “But Molly and I both have a terminal illness that we have to work. We’re going to work until we die.”

While his wife operated the Two Old Hippies boutique that still sells accessories, clothing, as well as guitars, Bedell went to Asia to design and build his own line of Bedell Guitars. By fall, he had developed a wholesale business and started selling Bedell Guitars throughout the country.

But that wasn’t enough. Bedell wanted to make guitars in the U.S.

Embracing opportunity

“I had my eyes and ears network open to where might and opportunity come along and one of the companies I got to know were the folks here at Breedlove,” he said. “Unfortunately Breedlove had fallen on tough times and so the owner had no choice but to sell it and came to me with an opportunity. I was just thrilled to death. This is a dream come true.”

Bedell has earned a reputation for always following his dreams.

“I think I always followed them. I don’t know that I always got them,” he said. “Life is real, right? You have your ups and you have your downs and you have reality that you don’t want to deal with, but you have to.”

breed3The key to his success, Bedell said, is never giving up.

“Everybody has reasons to quit. There are 10,000 reasons to stop; why you’re going to fail, why you shouldn’t pursue it, versus a handful of dreams about how you can succeed,” he said. “The people that succeed are the ones that persevere through all the reasons to not win, and win.”

In the next five years, Bedell said his goal is to make Bend the number-one place in the world for a consumer to buy the finest guitar available.

“I would love to have a showcase place where musicians from all over the world can come and they could really study their play style and their music and we could design guitars specific for them, that are custom for their style of music and their play,” he said.

Bedell said he and the co-hippies, his employees, are going to bring that dream to life.

“Every barrier and every challenge that gets in the way of that, we’re going to find a way around it, over it, through it, past it and it’s not an option,” he said. “You have to have this sense of future, this sense of hope, this sense of knowledge that you know it’s up to you, whether you succeed or whether you don’t. It’s not up to all the other people or things, or excuses, or barriers of frustrations that pop their head up.”

“Life is like a whack-a-mole,” he said. “And you have to keep whacking at it.”

For more information, visit http://breedlovemusic.com, follow Breedlove on Twitter, or like Breedlove on Facebook.

Fording the rapids of Oregon entrepreneurship

Peter Newport laughs. “I do chaos.”

In addition to the many roles he plays—from budding Gold Hill, Oregon, mayor to president of Sawyer Paddles and Oars—Chief Pot-Stirrer is also in Newport’s personal mix.

Newport is the former chief executive of Breedlove Guitar Company, a renowned custom instrument maker based out of Bend, Oregon. After selling the company in 2010, Newport moved to southern Oregon and bought Sawyer Paddles and Oars.

And it’s that fast-paced, 100-percent, year-over-year growth path that he helped generate at Breedlove that Newport wants to repeat with the similarly renowned custom paddle maker in Talent, Oregon.

But in the three years he’s been at Sawyer, the growth trajectory is slower than what Newport thrived on with Breedlove.

“We are growing Sawyer slower than we grew with Breedlove,” Newport said. “I’m engineered for 100 percent growth. I don’t have a whole lot of patience and it’s painfully slow. We’ll start ramping up our growth in the coming years.”

Nothing a little chaos can’t stir up

Tracking down the man known as “Crazy Pete” isn’t easy, especially in the middle of shifting manufacturing operations to Grants Pass, Oregon. in a partnership with custom furniture company Roguewood.

In fact, it seems wherever sawdust is flying and gorgeous wood products are crafted in Oregon, Newport can be found.

“He should be here later today,” Roguewood CEO Elizabeth Bauer says on a Monday afternoon. “Pete is just awesome. He’s a superstar.”

The next day at the Sawyer shop in Talent, Newport is again missing in action.

“He started real early this morning and I don’t expect him back anytime soon,” co-owner Zac Kauffman, says. “Things are a bit crazy around here right now.”

The company is making significant advancements, including the strategic partnership with Roguewood. It’s a partnership that has the two companies combining equipment and employees in the same facility — a temporarily chaotic move that will likely create an even higher level of product quality and consistency.
“Our peak seasons are opposite. It’s going to be beautiful. It will allow us to keep a steady workforce year round. We’re hoping if we cross-train on furniture and paddles and oars we can switch for whatever orders we need to get out the door,” Newport says.

Man in the middle

"Crazy Pete" Newport

“Crazy Pete” Newport

Any significant change will find Newport directly in the thick of it.

“Wherever the bottleneck is, that’s where I like to be,” Newport says a few days later, when he finally slows enough to talk.

In short, he wants more chaos because — for a die-hard kayaker turned entrepreneur who is now in the business of making fantastic paddles and oars – turbulence is not only expected but welcomed.
“I was taught how to communicate that type of chaos,” Newport says. “It leads to a fair amount of time in meetings but everybody’s on the same page.”

Finding a Niche. And another. And another.

Like many entrepreneurs, Newport spent a fair amount of time finding his own direction. His central Oregon upbringing weathered into him a love for the state, love for the extreme outdoor sports the region is known for, and love of music and love of adventure. All of these facets, in one way or another, have shaped Newport’s life trajectory.

The defining moment? When he took a kayaking class, “on a dare.”

“It totally changed my life,” Newport says, “The Bend and the Oregon boating scene is pretty advanced and I had a lot of great paddlers around me and fell head over heels into kayaking and that’s pretty much all I wanted to do.”

Newport navigated through Oregon colleges, including Southern Oregon University, University of Portland, and Portland State. By 1995, he wanted to try out for the 1996 Olympics in kayaking.

“It was a longshot,” he admits, “but I ended up breaking a bunch of ribs before I could even try out. But during that time I realized… wow, pretty much everything I was trying to do got shut off within a couple of weeks. I got kinda depressed.”

He followed his wife back to school—this time for an actual education—landing at Oregon State University.

“I was so sick of school and not knowing what I wanted to do,” he says. “But, when I went to OSU I ended up finishing pretty much near the top of my class in business.”

That led to a stint with Pepsi. Newport was working for the beverage company in marketing when Bend-area business leader Jim Schell sought him out. Schell, an entrepreneur and co-author of Small Business for Dummies (who still says on his Linkedin profile that “my favorite thing to do is to connect the dots,”) enticed Newport to consider working with a Bend- area company.

“He called me up and said, ‘Crazy Pete, have I got a perfect project for you.’” Newport recalls.
Soon Newport was the general manager of Breedlove Guitar, with a plan to earn more of the company each year moving forward.

“It was nightmare for three years,” Newport said. “Then we finally figured out how to grow it profitably.”

He also began slowly buying out investors. He became the chief executive and over the course of 11 years bought out most of the partners what he calls a “a great formula for budding entrepreneurs.”
Those wonderful, chaotic, 100-percent growth years soon followed and Breedlove Guitar Company became known as an industry leader. The company’s 500,000 annual sales hit $10 million and Newport sold it.
The experience helped craft Newport’s personal vision, combining his love for Oregon, its signature products and all the state has to offer in terms of lifestyle, recreation and environment.

“I really like niches where we can execute being number 1 or number 2 in quality, so we can dominate it,” Newport says.

The question that had once depressed Newport now enthralled him. What’s next? He wondered.

Method to the “madness”

Crazy Pete isn’t all that crazy when you get right down to it.

Like most successful entrepreneurs, he’s learned to combine his passions with past experiences to build success. But Newport kept the nickname given to him decades earlier while working at Pepsi.

“One day they called me the ‘Crazy Pete ‘and it just stuck. I thought it was kinda funny because I wasn’t really that crazy. But then I saw a definition for crazy as simply being open to another point of view,” says the perpetual pot stirrer. “It also gives me a lot of license.”

whitewaterJust as riding whitewater in a kayak, Newport keeps a fixed gaze on how best to navigate. He credits a book he read that said to be truly happy as an entrepreneur one must “design your dream customer,” Newport recalls.

“That was probably the most significant hit over the head I’ve had in forty years. I read that line and that changed everything. I was so excited to get a white board out and trying to fill it out,” he says.
That effort funneling down to a list of businesses where he could work with his dream customer. The list was short. One name long in fact. Sawyer Paddles and Oars in Talent.

“I used to work at Sawyer,” he said. “I wondered if they were still kicking.”

He sent an email to the company’s owner, Bruce Bergstrom. When he didn’t hear back immediately, he called. When he got an answering machine, he started driving to southern Oregon. On the way he called again and then again until at last Bergstrom picked up.

“I said, ’Hey, teach me how to run the company and I’ll help you retire.’ And it was kinda silent for a while then he said, ‘we’re gonna need some beer.’”

They met that day in May 2011 and penciled out a plan.

“Then we made it happen,” Newport says.

Playing in unison

The similarities between Breedlove Guitars and Sawyer Paddles and Oars are hard to miss, starting with the names: both remain branded by the vision of their respective owners who lived in Oregon and saw the opportunity to stunning craftsmanship into niche products of exceptional quality.

Both needed a healthy amount of Crazy Pete’s chaos to truly scale into a leader in their respective niche market.

“I love the initial quality,” he says of Sawyer but could equally be speaking of Breedlove. “We have dramatically improved the consistency and global excellence.”

To scale these niche manufacturing businesses takes more than pot stirring. Newport again is relying on his past experiences. At Breedlove the guitars were known for its innovative graduated top and bridge truss construction. At Sawyer the company has made innovations around some of their paddles that improves their competitive edge, Newport says. The company intersected with the rapid growing Stand Up Paddleboard markets through innovation becoming the first to create a tapered oval carbon fiber shaft. The tapering cuts the weight by 30 percent, Newport says, while the oval shaping makes it less fatiguing.

“The oval allows you to relax your grip so you don’t have to work so hard to aim it where you want it to go,” he says. “It’s probably the best racing paddle in the country right now.”

Shane Perrin, founder of SUP St. Louis, backs up Newport’s claim.

Perrin says he is considering changing his entire fleet over to the Storm Stand Up Paddle, which he describes as “ultra-tough.”

Equally important is a crucial factor often associated with Sawyer.

“Made in the USA,” Perrin says. “Says it all right there. I love that they are made there in Oregon.”
According to Sarah Layton, CEO of the Corporate Strategy Institute, Inc. , quality is spurring the comeback of American manufacturing.

“We conducted an informal survey of manufacturing CEOs, and the general consensus is that manufacturing will make a comeback in the US. The reason is partly because of perceived poor quality coming out of other countries, mostly China,” she forecasted.

Perrin is proof of that trend.

sawyer-oars“It’s been sad to watch companies that originated making their products here and then source through China so they can make more money,” Perrin says. “Almost always that product’s quality declines.”
Among the other moves Newport made to launch Sawyer’s growth curve was connecting directly to those like Perrin. To do that, he aggressively recruited Kauffman whose connection to the company goes back 30 years as an outfitter and guide trainer. Newport enticed Kauffman with the opportunity of ownership through sweat equity, a typically entrepreneurial move that has worked out as well as he could have imagined.

Like Perrin, Todd Freitag, owner of Grassy Knob Guide and Outfitters in Bandon, Oregon, knew Kauffman for several years. Sawyer sponsored Freitag’s steelhead tournament and Freitag serves as a regional ambassador. He speaks with intimate knowledge of his favorite product a square v-lamb top oar.

“It’s an absolute beautiful piece of wood,” Freitag says. “When I first saw them I couldn’t believe them. It’s almost like a piece of art. When you run those oars down the river you always attract attention.”
Freitag is quick to point his fellow river rats to Sawyer.

“There’s a lot of other great products in other states to, but let’s try to employ those craftsman who are local first. There’s tons of stuff in Oregon,” Freitag says.

New rivers to run

So the age old question of what to do with his life has become increasingly clear amid the chaos, Newport says. He wants to run a $100 million company in Oregon and has a typical turbulent way to meet his goal. It starts with becoming the mayor of Gold Hill, a town of 1,200 residents that sits on less than a square mile of land in Jackson County.

“I’m a die-hard Oregonian,” he says. “I think Gold Hill will be the coolest town in the world. Ten years from now it will be known as the best place in the world… it already has the best white water on the Rogue.”

The wannabe mayor is quick to list Gold Hill’s vision and virtues, from recreational marriages, a new parks plan, a 5,000-seat amphitheater that he hopes will rival the Britt Festival in Jacksonville, Ore.
“That’s where Sawyer as a brand belongs and it will become a $10 million company. Then all we need to do it cherry-pick ten other $10 million companies. As the mayor I’ll have reached my goal.”

Turbulent? Chaotic? Crazy? You bet. Doable? No doubt about it for Crazy Pete Newport. He’s seen it clearly and even drawn the whole thing up, a necessary first step for any entrepreneur with a dream, he insists.

“Anytime I start a project I take a poster board and draw a picture of the company in the future. I put it right next to my desk so anyone can see it,” he says. When we make a decision we ask, ‘does that get us closer to that picture or further away?’ It so easy to see when you have an image of what you’re going to become.”

For more information, visit http://www.paddlesandoars.com, follow Sawyer on Twitter, like Sawyer on Facebook, or follow Sawyer on Instagram.