[WEEK4] In Class Activity - Case Studies

STUDY CASE 1 : KATHRYN KERRIGAN

Age: 27
Location: Libertyville
Year founded: 2005

When you’re a high school girl with a size-11 foot, a cute pair of shoes might as well be made of platinum or diamonds. They don’t exist. Yes, there are practical shoes, orthopedic shoes. “But they’re not cute,” Kathryn Kerrigan says. 

She should know. “In high school, I remember driving with my dad to every shopping mall looking for prom shoes,” says Kerrigan, who stands 6 feet tall.

A basketball player while attending Lake Forest College in Illinois, she had friends even taller who had even bigger feet. For these young women with size-13 or -14 feet, even athletic shoes didn’t fit—they had to wear men’s. When they approached graduation, they couldn’t find nice dress shoes for job interviews.

While getting her MBA at Loyola University in Chicago, Kerrigan drafted a business plan for a Web site selling stylish shoes primarily in sizes 10 and larger. After graduating in 2005, she continued to do research and found the need was greater than she imagined. More than 35 percent of women wear shoe sizes 9 and larger, while shoe factories stop production at sizes 10 or 11.

So she took her business plan to the bank and secured a loan for $30,000 and went to work—literally starting from nothing. “We had to create the molds for every shoe size, and in every heel height,” she says. “These cost about $2,000 each.” Kerrigan drafted sketches and specs for her first line of dress shoes and started working with a craftsman in Italy to produce her designs.

Although factory reps told her they didn’t make the larger shoes because retailers didn’t ask for them, Kerrigan found plenty of demand. Her fi rst shipment sold out shortly after the site launched in December 2005. And, after being in business a short time, retailers started coming to her. Now her shoes are sold in more than 40 boutiques across the nation, and her sales nearly tripled last year.

Opening her own retail store wasn’t in the business plan, she says, but the need was there, “and we had to do it.” Last year, Kerrigan opened KK Shoes in the Chicago suburb of Libertyville, and plans call for a second retail store on Chicago’s exclusive North Shore in the next few years. Revenue tripled in 2007,

Kerrigan says, and sales through January 2008 exceeded those from the same time period last year.

Kerrigan also plans to expand the shoe collection for teens, including more casual styles at more moderate price points. “We have moms calling our office who have daughters who are 13 or 14 and they’re wearing shoe sizes 13-14,” she says.

Now 28, Kerrigan remembers all too well her own footwear frustrations, and she’s eager to provide trendy shoes for teens, and to help inspire confidence in them—like the motto on her Web site, “For Women Who Stand Tall.”

She enjoys speaking with teens, going into classrooms or helping coach a girls’ basketball team from time to time. “I love talking to young girls because there’s so much garbage out there that influences these adolescent ages,” she says. “I know it’s important for them to see something positive, someone they can look up to, someone who can show them that you can have it all and be well-rounded.”

STUDY CASE 2 : KYLMIT

Nate Alder Founder and CEO of Klymit

Nate Alder, a 25 year old BYU student, stumbled on a million dollar idea while deep sea diving. With the help of some friends, and fellow students, he took it from an idea to an award winning prototype. Now he is ready to sell, and, he hopes, change the way we keep warm.

Jacket Lining

Insulated clothing is old news. Not to mention the dated concept of wearing layers. In the future we will need nothing more than molecules to keep us warm. That is, if R. Nathan Alder's award winning idea takes off. Alder, 25, a BYU student who admits to taking a leisurely approach to graduation, has designed a line of winter gear that is insulated with argon gas, allowing them to be thinner, lighter than traditional winter gear and five times as warm. He has started a company, called Klymit, to develop and sell it.

numerous events, including: Invented in Utah, the BYU Business Plan Competition, the San Diego State Venture Competition, and a non-academic invention competition at the University of Oregon.

The Klymit line is insulated using a small metal cartridge of gas, familiar to anyone who has ever fired a pellet gun, which is connected to a valve. When the valve is opened, gas fills the lining of the clothing snaking through a labyrinth of tunnels specially designed to hold it evenly. The lining fills in less than a second, and each cartridge should last a whole ski season. If the wearer starts getting too hot, a turn of the valve releases some of the gas, cooing him down.

The Klymit team: Alder, the founder and CEO; Ben Maughan, finance and operations; Brady Woolford, product development; and Nick Sorensen, Director of Business Development, are currently using only argon, but are developing ways to use other noble gasses, like krypton and xenon, which are heavier and provide better insulation. The inspiration for the product struck Alder, a snowboard instructor, on a deep sea diving trip. He learned that divers us noble gasses to insulate themselves underwater, and realized that same concept could be used to make snow gear more efficient. While currently making only snow gear, Klymit is developing the technology to be used in camping gear, military equipment, and even home insulation.

Klymit has sold 18 percent of the company in an initial round of fundraising for around $320,000, and is currently involved in a second round. Interested investors can contact them through their website: www.klymit.com. They are currently in the process of licensing their line which includes prototypes for a jacket (expected to sell for around $500 to $700), pants, gloves, and ski boots. Alder anticipates the products hitting the market in the fall of 2009, and expects the company to generate $3 to $5 million in revenue by the end of 2008.