Photo by Brandon AlmsOne of the reasons Küat President Luke Kuschmeader likes doing business in Springfield is because of its central location and lower cost of living.
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Manufacturing
How Küat Has Been Successful Producing Bike Racks in Southwest Missouri
We talked with Küat co-founder and president Luke Kuschmeader to learn how this small gear company in southwest Missouri managed to stand out from the competition and finally make a name for itself with a lightweight bike car rack.
By Ettie Berneking
Nov 2019
When Küat launched in 2008, the Springfield company had one product to its name: an aluminum bike rack that could be hooked up to a receiver. It was a great idea—making a lightweight car rack that wouldn’t rust—but it still took five years for Küat to turn a profit. We talked with Küat co-founder and president Luke Kuschmeader to learn how this small gear company managed to stand out from the competition and finally make a name for itself.
Make It: Have you always wanted to work for yourself?
Luke Kuschmeader: I’ve been a lifelong entrepreneur. I was 16 when I launched my first business. It was a lawn mowing service. I sold it when I was 19 or 20 because I had a construction and remodeling business at the time, and I felt I could build it to be a bigger company. I did that for six or seven years and sold that in 2007 and started Küat.
Make It: How do you define entrepreneur?
L.K.: It’s a broad word. It can mean mowing lawns or launching rockets into space...so you have to think about what kind of business you’re trying to build. There’s the “I want to work for myself” part and the part where you want to build something.
Make It: How do you vet unattainable goals when you’re looking at starting your own business?
L.K.: I love helping people develop product ideas. I encourage them to talk to people who will give honest feedback and do the market research and talk with dealers. It’s too easy to surround yourself with people who will only give you the good news, so find people who will give honest feedback.
Make It: What role did Springfield play in your national launch?
L.K.: I really underestimated how important Springfield would be to our success. It fully embraced Küat from day one. We got in every local shop the day we launched. The community support was super-strong, and it spread from there.
Make It: One of your first investors/founding partners, Guy Mace, is still the co-owner of Küat. How important is it to find a good financial partner?
L.K.: You’re looking for investors, but you’re interviewing for partners at the same time. You need to make sure they’re a good fit and their vision matches yours. At the time, I didn't have this perspective. I was just looking for an investor. Guy was one of the people we presented to, and we felt that he brought the most to the table being an engineer, and it ended up being a great fit.
Make It: What would you caution against?
L.K.: Being overly confident. If you’re projecting you need $30,000 to start, you probably need $100,000. If you’re starting a company like Küat, you have to find a financial partner. We had to find angel investors or a venture capitalist who had money to invest in the business.
EDITOR'S NOTE: Angel investors are investors who give significant financial support to a start up, often in exchange for some level of ownership.
Make It: Was there a moment when you knew Küat would be a hit?
L.K.: In 2011 we won Men’s Journal Gear of the Year. It profiled the best products, and on one page was a Ducati motorcycle and on the other page was us. That was a big deal for our little brand.
A Step-by-Step Process of How Küat Made it Big
STEP 1 | Vet the Idea
Luke Kuschmeader and his fellow co-founder first got the idea to design and sell aluminum bike racks when they saw a friend welding aluminum four-wheeler racks that attached to receivers. They couldn’t find anyone else in the market making this type of bike rack, so they decided to give it a shot and created Küat.
STEP 2 | Find the Capital
Küat got part of its funding through the Small Business Administration, but the partners had to come up with 20 percent of the capital, or $200,000. They developed near-perfect prototypes of their first car rack and pitched the idea to investors until they found an ideal financial partner who was willing to take a risk on the company.
STEP 3 | Build an Audience
With so much national competition, Küat focused on launching locally in Springfield. It built relationships with local bike shops and retailers, so when it officially launched, it was represented in almost every local shop.
STEP 4 | Be Persistent
It took five years for Küat to turn a profit. Growth was slow, and sometimes the company would land one new retailer at a time in a new market, but that patience eventually paid off when the company was featured in Men’s Journal.
STEP 5 | Develop Customer Service
While Küat hit the market with a high-end product, Kuschmeader credits a lot of the company’s success to its focus on customer service. He says the team knows each individual customer interaction is important.
