Biggest Challenges of Fast-Growth Outdoor Companies
We’ve written previously about how the outdoor industry has experienced extraordinary growth over the past few years. According to research by an outdoor industry trade group, more than half of Americans over the age of 6 participated in outdoor activities in 2020, the highest number on record. Further 7.1 million more people participated in outdoor activities in 2020 than the year prior.
Obviously, the pandemic driving people away from gyms and other indoor activity is a major motivator of this activity, but it comes at a time when interest in the sector is at an all-time high.
The outdoor industry includes everything from equipment like surfboards and bike to apps that facilitate travel and exploration. With that quick growth comes specific challenges that we see with our outdoor sporting goods and retail clients.
Outdoor company founders often wear too many hats
Many outdoor companies are the passion project of a founder or group of founders. From Tom Shoes to Patagonia, sports companies are often driven by a charismatic leader who has involvement in many of the functions of the business. Problems arise when that individual takes on too much and burns out.
How we help: we help companies with growth planning and to identify the area where they need to hire.
Outdoor industry companies are challenged by succession planning
A common function of founder-led companies that the company begins to become associated with their founder. That makes succession planing more difficult.
We work with private equity and venture capital to craft a successful succession plan in outdoor sporting goods and retail. Often these companies are startups and can use executives with Fortune 500 experience and we can advise on bringing on that type of executive.
Outdoor Industry Companies Need to Prioritize Retention
Outdoor companies have the same challenges as other retail sectors in terms of employee retention, but they also have unique advantages.
Outdoor companies like Cotopaxi and Patagonia can tout their continued inclusion on sustainability lists and being headed by environmentally conscious CEO. Some of these companies allow employees to be fully remote or bring dogs to work in a comfortable, campus-like environment.
We’ve found through our past research that retention is ultimately about more than just money. Of course, luxe perks at the office and beyond can be a major factor in employee happiness.
Managing Fast Growth in the Outdoor Industry
As the outdoor sector has boomed, it increasingly attracts the interest of the venture capital world. According to research by CrunchBase, North American venture investing in the outdoor space climbed five-fold from $8.9 million in 2013 to $44.82 million in 2017.
Venture capital firms can become important to outdoor sports companies when they show the potential to grow beyond a small operation. VC funder and private equity step into the picture as a way of shoring up the financials and building a strong pathway toward growth.
Examples include:
- Peer-to-peer RV rental startup RVShare worked with Austin-based Tritium Partners to raise $50 million dollars in 2018, and elected to work with venture capital veteran and HomeAway executive Jon Gray as its CEO.
- onX is a Missoula, Montana-based mobile apps company that facilitates interactive map-based information sharing among hunters and outdoor enthusiasts. onX raised $20.3 million, with Summit Partners leading the investment, which also included participation from Bessemer Venture Partners, Millennium Technology Venture Partners, NEXT Frontier Capital, and J.P. Morgan Chase & Co. Director Stephen Burke.
How We Help Outdoor Companies Manage Growth
Our recruitment specialists work directly with outdoor companies and venture capital firms to find and source the top executive talent. Contact us for help.