What would you do if the demand for your product went from 100,000 units a day to almost nothing within a span of several months? That's exactly what happened to Razor USA and their flagship kick scooter during the Christmas season of 2000. The market had become oversaturated and sales plummeted. Razor bounced back from that early setback, and today, CEO and founder Carlton Calvin tells Bloomberg TV that Razor is having its best year ever.
What are the secrets to Razor's success? I spoke with research and design (R&D) manager Bob Hadley, who's been with Razor since the beginning, and found out. Following are the critical success factors that have enabled Razor to survive and thrive in a difficult and competitive market.
Although the kick scooter market eventually bounced back and now represents 25 percent or more of their business, Razor was not content to be a "one hit wonder" or produce endless variations of the original product. They defined their business more broadly -- they were in "the wheels business." And from that strategy came a string of successful products in various categories: the original scooter, the two-wheeled RipStik, the three-wheeled PowerWing, and their latest, the electric powered Crazy Cart, a viral product that was a big hit this holiday season.
Build an efficient process that quickly turns good ideas into great products
It's important to be able to vet out design ideas as quickly as possible. Hadley estimates that for every 100 ideas, about 10 make it to the prototype stage for validation. Of these, perhaps only one concept gets to market in full production and only one out of every 20 commercial products might be considered a blockbuster. Razor uses
Siemens PLM Software's Solid Edge to design and develop its products. The software lets the Razor designers work quickly and communicate clearly with manufacturers in China. These factors enable Razor to streamline their prototyping process and reduce their time to market by up to 50 percent when compared to earlier methods.
Be open to new sources of innovation, and don’t trust focus groups
Hadley says that Razor isn't big on focus groups, which tend to provide too small a sample. Instead, they largely rely on a core team and the testing and validation funnel described above, which incorporates tough go/kill decision points. Key inputs to that process include direct observation of children’s play patterns and some measure of "gut feel."
The idea for Razor's latest success, the Crazy Cart, came from Razor brand manager Ali Kermani. The Crazy Cart is an electric go-cart with a release bar that enables the rider to spin freely, and "drift" through turns. Kermani refined the product as part of his MBA thesis at UCLA's Anderson School of Management. As Kermani learned in marketing the product, the best way to describe it, is to show it in action.
Embrace new ways to get the word out
Bloomberg BusinessWeek reports that Razor's Crazy Cart was one of the hottest toys of the 2013 holiday season. The company believes that all the excitement stemmed from two YouTube videos that went viral in just a few days. It firmly believes that social media has changed the way companies have to market their products. Today, a search on YouTube for "Razor Crazy Cart" yields about 23,500 results. Razor plans to hire a social media team who will be tasked with helping people better understand their products and spread the word.
Adopt a long-term strategy with a focus on innovation
Razor sees big potential with its patented Crazy Cart, and plans to spend the near term keeping up with demand. The product is expected to outsell the flagship Razor scooter this year. But they are not neglecting their previous products, taking a similar long-term view. Take for example, their three-wheeled PowerWing scooter. With spinning castor wheels, it's a bit like a cross between the original scooter and the Crazy Cart. Released several years ago, the PowerWing is now facing more competition. It's due for a design refresh, which is one of the reasons Razor partnered with Siemens PLM Software and Solid Edge to sponsor a GrabCAD design challenge.
Take the challenge, and win the Get Radical Razor PowerWing Scooter Design Challenge. Design criteria are described on the challenge landing page and in this webcast. Participants are encouraged to do a bit of research into the PowerWing’s product category and check out some of its competitors. Participants must use Solid Edge for the design, and a free trial is available.
John Fox is vice president of marketing for Siemens PLM Software.
This post originally appeared on the Siemens PLM Software blog.