December 09, 2015 News » Cover Story

Making it 

Entrepreneurial manufacturers find traction in Colorado Springs

click to enlarge Drew Johnson's upcycled ties are made of circuit board parts. - COURTESY TECHWEARS
  • Courtesy TechWears
  • Drew Johnson's upcycled ties are made of circuit board parts.

Drew Johnson was working at Blue Star Recyclers in 2013 when he decided he needed a necktie made from upcycled circuit boards.

He was surprised when an Internet search produced nothing, so he took out his Dremel tool and pieced one together himself.

"It was such a hit," he says, "I accidentally sold it at an art show."

He soon found out that this was more than an artistic hobby. People wanted to buy his ties — and the earrings he began producing with the same materials. He was spending so much time on his creations that it began to consume his life. So he did what seemed logical: He started his own business, TechWears, and devoted himself to it.

Johnson says he's currently at a turning point, having recently completed a $7,500 Kickstarter campaign that raised $8,600.

His initial plan was to build a tiny mobile factory (similar to a tiny house), so he could make and sell his products at art shows. But, propelled by his company's Instagram account, his ties and jewelry have been sold in 15 countries, and he's received wholesale requests for bulk quantities.

That got him thinking, he says. "What if I could sell 1,000 ties a week?"

Now he's wondering if he should build the tiny mobile factory to travel to wholesale trade shows, where he could take large-scale orders. He's also thought of setting up an interactive storefront where customers could place custom orders, tour a factory in the back and learn more about electronics recycling. The factory could be employee-owned, with trained workers manufacturing the products right here in Colorado Springs.

It's a major decision for Johnson, and he's weighing a lot of factors. One is how much the local business community will support him. Recently, Gov. John Hickenlooper designated Nov. 18 as Colorado Upcycling Day to celebrate businesses such as TechWears, making use of products that otherwise would be trashed or recycled.

Johnson says the day received a lot of attention in Denver and Fort Collins, but not as much in Colorado Springs.

"I'd love to [expand] in Colorado Springs," he says, "but I don't know if the business ecosystem here is the best fit for it."

TechWears fits the mold for what has been dubbed the "maker movement" — artisans, tinkerers and inventors making handmade products on a small scale, often out of home-based businesses. The movement has its roots in hardware (such as the 3D printer MakerBot) and the softer innovations it inspires (like the various 3D-printed products sold by individual artisans via Shapeways).

But the term has come to include the more traditional fare you might find on Etsy: handmade jewelry, one-of-a-kind dresses, knitted blankets, carved wooden spoons and dishes fresh from the potter's wheel. Products often are sold online and at temporary events like farmers and craft markets, or at pop-up retail shops.

The movement is something of a backlash from the offshoring of American manufacturing and a consumer culture fueled by cheap products made, often, in China. But it's also an embracing of innovation and creativity. For millennials who were searching for their first jobs during the Great Recession, it also has been a way to make a living in today's so-called gig economy, in which the 20-something peddling her homemade soap at the farmers market by day may also be your Uber driver one evening.

The trend is beginning to blossom in the Springs, though it remains to be seen what impact it will have. If Johnson's experience is any guide, a lot of what happens to makers will depend on how much support the city and state provide to this industrious and creative class of entrepreneurs.

Colorado has shown some growth recently in the manufacturing sector. A November 2015 report from the state Office of Economic Development and International Trade (OEDIT) finds that while Colorado counted only 144,617 manufacturing jobs (36 percent below the national average) at 5,371 "payrolled business locations," that number had grown by 11.7 percent over the past five years, compared to just 6.9 percent nationally.

Colorado's manufacturing jobs were also paying more, with an average salary of $78,423 compared to $76,958 nationally. The largest regional employer in this sector is Lockheed Martin Space Systems, which employs 10,000 people.

In El Paso County, Colorado Department of Labor and Employment preliminary numbers show 512 manufacturing establishments employed a total of 11,839 people in the second quarter of 2015. There hasn't been a big leap in jobs in the past year, but there was a growth in companies, which is up from just 496 a year ago.

Notably, Sierra Completions, a subsidiary of the Sierra Nevada Corporation, announced plans in early 2015 to build a high-end aircraft customization plant at the Colorado Aerospace Park at the Colorado Springs airport. Sierra Completions eventually is expected to hire 2,100 employees.

On the smaller scale, Colorado Springs' maker movement does seem to be growing, at least anecdotally.

Sarah Harris, director of business development and economic vitality for the Downtown Partnership, says regardless of their model, small businesses need better resources.

Small manufacturing companies may want warehouse space in parts of town where such properties are rare or expensive. Artists, likewise, want workspaces that are often hard to come by. Others might be looking for business coaching or specialized talent. And a lot of people need access to expensive equipment available for rent (whether that's a 3D printer or a commercial kitchen).

Borealis Fat Bikes, at 22 N. Sierra Madre St., is a good example of the challenges facing manufacturers in the Springs. Borealis (which employs 10 people, and last year claimed about $3.5 million in business) doesn't need a retail space. The company makes high-end mountain bikes and ships about 2,000 bikes a year, with only about 5 percent staying in Colorado.

"At the moment, if you walk to the front of our building and try to get in, it's locked," Owner Steve Kaczmarek says. "We don't have a retail store at all."

Nevertheless, when Kaczmarek wanted to expand into a larger warehouse, he was determined to stay in the downtown area so his employees could bike to work. He says he looked for nine months before finding a space he could afford. The company moved to its current location in September.

Harris says there are fewer warehouses in downtown Colorado Springs than in many cities, and she hears a lot about the need for more space. There are also fewer tangible challenges. Often, marketing is a significant hurdle for small businesses.

The new Colorado Collective magazine, which recently released its first issue, aims to help by spotlighting local makers and their products.

"It's important for me to find those hidden gems as well as highlight pioneers that our community is already familiar with," Mundi Ross, founder of the magazine, says via email.

click to enlarge Mundi Ross hopes to inform the public about local makers. - COURTESY COLORADO SPRINGS BUSINESS JOURNAL
  • Courtesy Colorado Springs Business Journal
  • Mundi Ross hopes to inform the public about local makers.

Ross can empathize with small-business owners. She remembers struggling with the basics when she was founding salt+butter co., a cookie company, in 2012, and she felt lucky to stumble across classes that helped her, for instance, write a business plan. Despite the obstacles, Ross believes more local makers are moving beyond temporary events and online sales toward other means of marketing and selling their products.

"Perhaps I'm hyper-aware because of the publication," Ross writes, "but I do feel there is a steady yet slow growth in the 'makers' movement. I feel a lot more folk are moving away from [Etsy] as their main platform for awareness and creating their own merchant sites. Instagram has become a very popular way to tell stories, which drives traffic as well. Etsy is straight-forward and you don't get to really know the maker behind the craft. I've enjoyed learning more about them through [Instagram] and their personal websites."

Some local manufacturers that now ship around the country started out as makers.

Jan Erickson, owner and founder of the clothing company Janska, began by sewing a single jacket as a gift for a friend who had limited movement due to a stroke. The jacket was designed to be easy to get on and off. That accessibility is still a key value of Janska, which has been around for 12 years now, though the company now has fashion lines as well.

click to enlarge Jan Erickson and Jon Thomas run the local manufacturing company Janska. - COURTESY COLORADO SPRINGS BUSINESS JOURNAL
  • Courtesy Colorado Springs Business Journal
  • Jan Erickson and Jon Thomas run the local manufacturing company Janska.

On Nov. 19, Erickson led tours of her factory, near the Hotel Eleganté in south Colorado Springs. The plant employs 40 people who design, sew and sell Janska's products, including fleece clothing, slippers, accessories, coats and other items. In the warehouse, brightly colored clothes hang from huge racks that form hallways; employees bustle around and sewing machines create a constant hum.

Erickson was giving the tour as part of a celebration of Gov. John Hickenlooper's recent proclamation of Nov. 19 as Colorado Manufacturing Day. Local manufacturers, led by Erickson, used that proclamation as a launching pad for the "Colorado Made Matters Holiday Challenge," which runs through Dec. 22. It asks consumers to ensure that 5 percent of their holiday gifts are made in Colorado.

Erickson says she faces many challenges trying to get the word out about Colorado-made products. For one, it can be difficult for consumers to identify the products. (She seemed unaware the state began offering a "byCOLORADO" brand sticker a couple years ago.) Colorado Made Matters does have a Facebook page and is piecing together a list of Colorado manufacturers.

But even if consumers can find Colorado-made products, they still have to be willing to buy them, often at a price that exceeds that of competitors who ship in items from overseas.

"Can we compete with somebody who makes a couple dollars a day, or a dollar a day?" Erickson asks. "Absolutely not."

Erickson says Colorado manufacturers and makers have to market their products on something other than price.

Usually, she says, there has to be something "special" about the product. And it also helps to remind people that buying locally-made products have a big economic impact in their communities.

"It does a tremendous amount as far as producing jobs," she says.

Interestingly, not all manufacturing companies in the area actually make something here.

Take Elope.

Keith Johnson, co-owner/founder of Elope, which makes hats for costumes, says the idea for the company came to him and his brother Kevin while they were traveling in Asia. They started out selling clothes and other items imported from overseas out of a "hippy cart" in The Citadel mall.

By 1993, Elope was manufacturing its own products in Asia. Its factories remain there today, but its business headquarters now employs about 45 people in Colorado Springs, and sells to 3,000 to 4,000 retailers, including major chains like Target and Walmart.

Johnson thinks the maker movement is great and he's in touch with many local artisans. But he says it's tough for them to make it in Colorado Springs, where there are few resources, especially compared to Denver.

"Colorado Springs is not the friendliest toward that kind of thing," he says, "when Denver's only an hour away and it's like a whole different world up there."

Sarah Harris says she's seen a resurgence in small manufacturing in and around downtown, from one-person artisan operations to retail outlets selling handmade goods and small companies that ship their products across the country, or even overseas. Harris says she expects some of those businesses will expand, though she cautions that growth isn't right for every business. The value of an artisan product, for instance, might be that it's made by a particular artist.

"It really depends on what the business is, what the value is that they provide, and what the owner's even wanting to do with that company," she says.

For small companies looking to grow, downtown's Holiday Pop-Up Shop program allows new businesses to "try out" an empty downtown retail space at reduced rent during the holiday season. Several local makers have taken advantage of the program, now in its second year, including the Makers Market (1251/2 N. Tejon St.), a collective of makers who share a single shop.

Jeremy Worley makes T-shirts, steel pint cups and mugs under the name The Worley Company and is a member of the collective. On average, 20 percent of his proceeds go to select nonprofits. Right now, that's Portal Bikes, which builds specialty bikes meant to help people in developing countries with transportation or growing businesses — including cargo bikes and bikes that can be used to power machines.

Worley says Makers Market was happy to sign up for the Pop-Up Shop program knowing the location would be temporary. Alhough it just opened Nov. 1, it will be gone in January, when an art gallery is moving into the space.

Worley always knew the shop would be short-lived, but he says it was an opportunity for the collective to "get our feet wet" and learn more about running a retail shop. He's actively looking for a new downtown location, though he says high rents and a culture that doesn't encourage walking or lingering are challenges. He says he's not willing to go into debt or risk bankruptcy, so the collective is trying to work within its lean budget.

Despite that, Worley says he hopes to grow the Makers Market. He envisions online sales, paired with a retail shop that's also a hang-out or, as he puts it, "a multi-faceted space that is kind of a rock of creativity." While some artisans are resistant to growing, he says the collective isn't necessarily.

"We're always open to that growth," he says. "I think there's a limit on that. We're not going to be franchisees; we're not looking for investors, but we're also businessmen."

Worley and the other members of the collective all have lived in bigger cities and recognize that it can be easier to grow a maker business in a place that's already considered "cool." But he says the members of the collective are committed to staying in the Springs. Here, he says, they have a chance to get into the market on the ground floor.

"It's kind of a cop-out going to a cool city just to go to a cool city," he says. "I think we were all kind of like, 'Hey let's build something.'"


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