5.6: A Failure Success Story
A Failure Success Story: John Fabel
The story of John Fabel teaches us that when it comes to entrepreneurial endeavors, failure isn’t always a bad thing: new opportunities arise, lessons are learned, people move forward. In this profile we take you through John’s story, from invention to incorporation to bankruptcy to eventual success, and find out what he learned along the way.
Suspension bridges and backpacks
After long hours of cross-country skiing, Fabel, an outdoor enthusiast, noticed that his backpack bruised his shoulders. A lifelong designer and inventor with a knack for looking at things differently, Fabel began to wonder if he could create a better, less taxing backpack.
While marveling at the suspension bridges on a trip to New York City, he found the answer.
“When I used a hip belt to transfer the backpack’s weight to my hips, I still got sore shoulders. So the problem wasn’t the shoulder straps. The problem was how the weight wanted to fall back, away from your body. So I started thinking, ‘What if I could design a backpack that would get the weight to pull toward your back rather than away from it?’”
“After I saw the Brooklyn Bridge, I started thinking about how to build a hip pack that would distribute the weight evenly, like a suspension bridge.”
In a suspension bridge, huge main cables extending from one end to the other hold up the roadway. The cables rest on top of towers and are secured at each end by anchorages. Instead of relying on shoulder straps to carry the load, Fabel designed a backpack that transfers much of the weight to the hips. When wearing it, your hips act like a tower on a suspension bridge, the backpack is similar to the roadway, and the triangular flap between the backpack and the hip belt—like the cables on the bridge—distributes the weight evenly.
Fabel called the invention BioSpan, patented it, and in 1993 began work in earnest on a company built around the technology, EcoTrek.
I don’t care if it’s made from uranium, I want one
Fabel went through the standard steps in creating EcoTrek: he performed a feasibility study, formed a management team, put together a business plan, did research and development, created a core line of products, found a manufacturing partner, and secured seed financing. By the time he was starting EcoTrek, Fabel had for years been interested in environmental sustainability, and he designed EcoTrek’s product line accordingly: the equipment was made from 85% recycled materials (the fabric was made from soda bottles, the buckles from recycled industrial nylon, etc.), and the products were made to be recycled themselves, designed for disassembly in such a way that everything could be broken down into individual parts in about three steps. This “green” approach, Fabel reasoned, would surely resonate with backpackers and outdoor enthusiasts. “The products were designed for use in the environment by people who love being in the environment,” said Fabel. “So our idea was, ‘Let’s make our products both fun and coherent within that larger notion.’”
Fabel received plenty of positive feedback. EcoTrek was featured in several prominent publications, environmentalists were happy there was a green alternative in outdoor equipment, and people truly enjoyed wearing the BioSpan backpack. Once, when Fabel was hiking with Everest IMAX film creator David Breashears, he asked David how he liked the backpack and if he appreciated that it was made from 85% recycled materials. “I don’t care if it’s made from uranium,” Breashears said. “I want one.”
Because Fabel put the green aspect of EcoTrek first, he decided to go forward with an unusual marketing strategy for outdoor equipment: direct marketing. “It’s very difficult to market green products in that, in the retail environment where most outdoor equipment is sold, it’s very hard to communicate the green attributes,” said Fabel. “More customer education than usual needs to take place, and the retail environment doesn’t lend itself very well to that. So we made the decision to concentrate on direct marketing because we thought we would be able to much more powerfully communicate our green values to our target customers.”
“But unless you hit your target, it’s very expensive.”
Misfire
EcoTrek’s sales flopped the first time out. According to Fabel, this happened for several reasons: “Number one, people don’t buy backpacks through the mail. Oops! Second, we misjudged the greenness of the outdoor market. It’s no greener than any other market. Although they may appreciate the green values more, it’s still a tertiary value: performance comes first. We had our message exactly wrong.”
The team shifted to a retail strategy and immediately started gaining traction, going through three rounds of manufacturing with still more orders to fill. “We couldn’t make them fast enough,” said Fabel. But by that time they were out of money. “We had so much debt load, we didn’t have the resources to adequately pull off the retail marketing strategy even though we were getting signs that everything was turning around. We were constantly scrabbling behind. Combined with insufficient startup capital, our failed initial marketing strategy cost us the company. The initial marketing strategy was fundamentally flawed because when you put on the BioSpan backpack, you ‘get it’ in a very visceral way: people almost inevitably smile when they put it on. Yet we initially had a marketing strategy that took that experience totally out of the loop.”
“When we closed the company down we had orders we couldn’t fill because we didn’t have the money to manufacture them.”
The quick rebound
Despite EcoTrek’s failure it was clear Fabel had something in BioSpan. About a month after he put the company down Fabel got a phone call from Marmot, a leader in the outdoor equipment industry. Said Fabel, “Every time Marmot introduces a new product line they want a flagship innovation that strengthens their brand image of being innovators. They saw BioSpan as a technology that fit within their brand image.” Marmot hired Fabel to build a backpack line around BioSpan, and because he had developed the technology and still owned the patent rights, he licensed the patent to the company. The line of products exceeded Marmot’s expectations, with one of the backpacks earnings the highest ratings in its category.
So EcoTrek certainly wasn’t a total loss. “A lot of the value of the BioSpan product concept was developed through the work of EcoTrek,” said Fabel. “Even though EcoTrek itself wasn’t successful, the idea was. It had some very successful outcomes.”