OCTOBER 7, 2003

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ENTREPRENEUR Q&A


Tailored for the Rugged Invidualist
Beyond Fleece Clothing's Scott Jones explains "mass customization," and why major outdoor-clothing outfits aren't nimble enough to imitate his success

Editor's Note: The U.S. Small Business Administration handed out several awards during its National Entrepreneurship Conference & Expo, held in Washington D.C. Sept. 17-19. Among these were three special advocacy awards given to small businesses that, in the SBA's words, showcase "the vital importance" of America's entrepreneurs. BusinessWeek Online spoke with each of these small-biz champions and is publishing the interviews as a series.


In 1996, cash-strapped college junior Scott Jones couldn't afford a fleece jacket -- a major problem for an avid outdoorsman with a growing passion for gear-heavy sports like mountaineering, rock climbing, and hiking. So he high-tailed it to the craft center at the University of Oregon, ordered a pattern and two yards of fleece, and started sewing. "I didn't know the zipper had to be a certain length. I didn't know the seams had to line up," Jones says. "The whole thing was pretty mismatched, but everybody seemed to like it. All my friends were saying, 'Hey, I want one, too.' So I kept making them."

Today, 27-year-old Jones heads Beyond Fleece Clothing, an e-tailer that's out to prove the concept of mass customization isn't a contradiction in terms. Specializing in high-quality outdoor clothing made to each customer's individual specifications, his brainchild is developing a devoted following among outdoors lovers tired of cookie-cutter, off-the-rack items, and also tapping some potentially lucrative markets by catering to the unique needs of police departments and military combat units. The strategy appears to be working. Jones expects sales to top $500,000 in 2003, and $1 million next year.

There's just one problem: cash flow. Growing that fast will require a financial infusion -- and soon. Jones has taken out a loan or two from the U.S. Small Business Administration, which last month honored him with a special young entrepreneur award. But Jones figures he'll need something more if he's going to take his business where he's convinced it has the potential to go. Recently, he spoke with BusinessWeek Online's Lisa Miller about the challenges ahead, the advantages of customization, and why cops don't want jackets that flare out over their hips. Edited excerpts of their conversation follow:

Q: Mass customization has been hyped before. Is it now the way of the future or just a fad?
A: I think it's the way of the future. Mass customization has been around since World War II, when Toyota started doing it. And then Dell (DELL ) started doing it. And Dell's example is a really good way of getting people to understand what we do.

We don't just let you design your product and customize it for you...the jackets would be incredibly expensive. But we do create a color selection, a diverse-options selection that you get to choose from, and then we make it specifically to your measurements. Kind of like what Dell does: They give you a product, you can customize it, they then make it, and they ship it out to you. The greatest thing about that is you get what you want, but they don't have extra inventory, because they haven't made it [in advance]. And we don't make ours [in advance]. All we have is fabric, until the order comes in.

Q: Your main focus is the Internet, through beyondfleece.com, but you also plan to establish relationships with retail stores, so customers can see sample products, correct?
A: Yes, we're going to start in a very few towns here in the Northwest, starting out in Ashland, [Ore.]. We're going to work our way up to Seattle with between one and five stores over the next six months. We're going to learn a lot about how do we develop the relationship with the retailer, how do we develop the relationship with the consumer. Then, hopefully, within 12 to 24 months, we'll be able to go nationwide, and the entire industry will just completely be revolutionized because of it.

People say, "Well, won't the big boys come in and just do it, too, and totally knock your socks off?" And the answer is no. [It's] been proven that you can't be a mass producer and a mass customizer at the same time. The mentality is totally different. Whenever someone tries to do it, they fail. So we are pretty much the only business plan available that can't have a big boy knock us off. It's impossible, unless they want to throw a huge amount of money at it. And they're just not willing to do it.

Q: So, will we see your samples in stores like Target someday?
A: What we want to do is only go into a high-quality, niche, hunting/climbing/skiing store, where we know the customer service is great. Where we know it's a local management that will really take care of us and take care of the consumer, because the way they treat their customer reflects upon us. I think that staying [in that] niche will make it seem like this is a really cool niche product that everybody is going to want. If we go into the Targets of the world, it just wouldn't be that [special] anymore. It just would be mainstream. I don't think that would be a healthy way to go.

Q: Who is your typical customer?
A: We're finding that our customer base is the usual 19- to 45-year-olds, [and most] are 25 to 45, they have to be comfortable going online, and they are weekend warriors. They do these really cool trips [on the weekend] and then they go back to work. They're not ski bums or anything like that, where they go out and they adventure all the time.

We find that they mostly come from the East Coast, which is interesting. We get a lot of Texas, we get a lot of North Carolina and Georgia, which [seems] kind of odd at first. But it's because there aren't a lot of ski shops, and there isn't a lot of cold-weather clothing in the stores there, so they have to go online. So we can gain that niche. And we can stay online with them, or we could even go into those retail stores down there. [Our] customer base also is probably 30% women, 70% men.

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