Episode 18 - Hugo Davidson

  

  

In this episode, we talk to Hugo Davidson, CEO, and Co-founder of Knog. Knog is a Melbourne design brand creating urban flavoured tech for the road, rail & outdoors.

The company was founded in 2002 with a vision of making “unboring” things. Urban by Knog is seen as an “attitude” rather than a geography – modern, progressive, youthful, design-driven, daring and hedonistic. They incorporate this Urban flavour across their cycling and outdoor products.

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In this episode we cover: 

  • Hugo’s journey from being a designer to providing “unboring” cycling products
  • The story of how they went into the cycling industry and the the first products that Knog focused on
  • How the term “Unboring” came about in their business
  • From the bike lights to bike bells and transitioning and expanding to other products and categories
  • Designs of their products
  • Next steps and the future for Knog
  • Rookie mistakes and common problems within their business
  • Sponsorships of Knog

Links

Transcript:

FELICITY:

Welcome to the All Torque podcast, where each episode we interview an inspiring person to share their story with you. I'm your host, Felicity Dales, managing director of Body Torque.

I have here today Hugo Davidson, the CEO and cofounder of Knog. Founded in 2002 with Mal McKechnie, a Melbourne design brand creating urban flavour tech for the road, trail and outdoors. Urban by Knog is seen as an attitude rather than a geography, modern, progressive, youthful, design-driven, daring and hedonistic. They incorporate the urban flavour across their cycling and outdoor products. The culture at Knog is about expression, which is Illustrated in their logo with a speech bubble. Everyone is encouraged to express their opinion and is given the opportunity to challenge the status quo. Your vision is to make unboring things, welcome Hugo.

HUGO:

Hello Felicity, how are you?

FELICITY:

I’m good, thank you and thanks for being here. Your background includes industrial design, product design starting in Melbourne then London as a senior industrial designer. The COO and cofounder of Torsion, an interactive web kiosk company and now a CEO and executive director of Catalyst Design Group for 25 years, that provides expertise with industrial design, concept development, product engineering, electronics software and packaging. As a creative team you focus on the commercialisation of all these disciplines to drive profitable and successful products along with Knog for 15 years.

Tell us about your journey from starting as a designer, to providing unboring cycling products and why cycling. And I love that term unboring Hugo, so tell us about it.

HUGO:

Well that’s quite a lot of information, thanks Felicity. I started, I had a long interest in industrial design and product design and I’ve worked initially in London, consultancy for a number of different companies because I felt that the scope of work in the U.K. and Europe was going to be far more exciting than working locally. And at that point in time, late 80s and 90s was recession, or what the economy in Melbourne made room for jobs. So, it was really more of a necessity than it was a planned, more as necessity as far as trying to find.. I was very lucky in that some of the studios that I worked with and people who mentored me in the U.K. really gave me a great opportunity to look at what process was for mass production. Whereas a lot of the work that was being done in Australia at the time was far more.. but it wasn’t necessarily high volume and we weren’t getting any of the serious brands and that was actually more designing from Melbourne based, because the headquarters were all in America or Europe.

So, it seemed sensible at the time, I think I was there in the U.K. for probably four years, or so, and came back with a vision and an enthusiasm from all the companies I had worked with. In the end I would have had probably six or seven contract roles in the U.K. and opted for the contracting rather than trying to get a salary position, because I wanted to try and find out the pit falls of running a company and which companies were the most effective and managed effectively and what was the business model like. So, it gave me a great view to be able to evaluate who I liked working for, what their skills were, what they have, and a lot of the products that.. we worked on projects for Sony and mobile phone manufacturers and high volume..  

FELICITY:

Mass produced.

HUGO:

Mass produced, yep. That was a great opportunity and it really set me up when I got back to Melbourne. So, I returned back here to find that the economy still wasn’t as good as it could be, and.. I decided I would start trying to find customers and clients myself, I was lucky enough that my father who was an architect from a large company, had just sort of get into retirement, so I encouraged him out of retirement and said, "Why don't you come and mentor me and show me how to run a company?" Which he did. So, I was lucky enough to work with my old man for probably close to 18 or 20 years.

FELICITY:

Wow!

HUGO:

He sort of sat in the background, just helping us with contracts and understanding and really, I suppose, guiding us in many ways. It was an absolute blessing and one of the luckiest things I've had the opportunity to do. I got to know him better than I would have otherwise. We found that together we needed a third person and that was when I met Malcolm as a contractor. He came on and he was the only engineer in Melbourne at the time who focused on product engineering. There were lots of mechanical engineers and structural engineers and electronics engineers but, no one who actually knew about plastics and product manufacturing.

FELICITY:

Right.

HUGO:

So, he was being very highly sought after and used by all of the other design companies. There were probably five or six serious companies at the time, and the only way I could encourage him to stay was to offer him part of the company.

FELICITY:

Right.

HUGO:

He came on as the third partner, third director, and we set off from there. That was 25 years ago that Malcolm came aboard. We did a lot of consulting in Melbourne and we worked with a lot of overseas customers over that period. For the first ten years of that I suppose, we realised that design was wonderful as a profession; still absolutely feel more than passionate about product and the whole process, but it's very difficult in the context of an Australian company, to make a profitable, ongoing, viable business.

Whereas our American counterparts and some of our British counterparts really have been able to brand. I'm talking about companies like IDO or Frog; some of the other big ... a number of them in Britain, as well. Big consultancies where.. Hedgegram would be another one from the UK.  They have granted their company effectively and they've made the whole enterprise very, very profitable, and as a result, companies will continue to go back and use the services.

We found that was really for the Australian market. People seem to buy price. For that reason, we decided that the best thing we could do was to design some sort of widget or product that would allow us to make money while we were sleeping. That was the principle.

FELICITY:

And to be able to scale it, as well, so that it's appealing globally and not just in Australia.

HUGO:

Exactly. We tried a number of times to do this and eventually we called Torsion, which was at the height of the .com craze, or just prior to that. Went out and sought venture capital and were successful in raising at most, probably 7-8 million dollars in venture capital over that period. Managed to run through all of that, and it was about that time when the crash happened and that with our ongoing capital and needed to do something else.

That really was the birth of Knog brand because we needed to come up with an idea, an alternative idea, that had some longevity that didn't involve investors and was something we could do ourselves with our core company.

FELICITY:

So, what were the first products that you focused on?

HUGO:

Yeah, we'd gone from a team of 36 people at Catalyst, down to about four and one of our designers was a cyclist. We were trying to find a category, a channel or a product that we could develop. He said, "Look." This young guy said, "Chinese bike lights are terrible, they're all the same. We should start thinking about getting involved in that." None of us cycle except for him; he worked with some bicycle..

He was successful in talking us into looking at that category and we.. I remember we set about researching it. We had a very large wall, probably five or six metres long and three metres high and we bought every cycling magazine that we could possibly find and managed to sort of put a matrix of all of the different brands and all the different riding styles and the demographic and the disposable income of all people, and thought, "Oh my goodness. Look, right in the middle of this area." This opportunity which was urban cycling because road cycling was very well catered for mountain biking, had come in and sort of gone, fixed gear hadn't arrived yet. So, we just put our finger right in the middle and said, "Let's focus all our products in this area and start developing products in this specific area."

We had no idea and it was absolutely more luck than good management that within the next five years of that birth that the city and urban cycling craze around the world would just take off. The only category of cycling growing in excess of 16% per year, for around about eight years running. We got swept up in that, which was a wonderful process and I suppose what we found through that as the heat started to come off the back of the urban cycling craze was that while we developed a brand with some sort of innovative products that were working, we were only as good as the last product that we designed.

FELICITY:

That's right.

HUGO:

As a result, we had to continue to look at innovation and product development that we'd see if anything was there. That was the birth of the term "unboring".

We looked at everything else whether that was the category of products that we were working in, and they all just seemed to follow each other. They were looking for innovation and we found that by changing the rules we could actually put products out there that were unboring and people continue to look at. With luck, I don't know if we always have led, but we certainly tried to lead, both in our marketing and our..

FELICITY:

Yes, absolutely. I can see that from your branding and graphics, and definitely you stand out. It's exciting, you know. It's inspiring and it's salivating. You want to see more. It's awesome what you've done.

HUGO:

Thank you. Well a lot of the enjoyment we've had actually is.. My training's not even in brand, but we've had a great opportunity and a great journey actually developing the brand behind the products. We realised very early on that product design by itself.. my staff and team are starting to turn up.

FELICITY:

Yeah, yeah.

HUGO:

Product design itself wouldn't be enough to move the company forward. The brand really made a story behind that.

It would drive that. I suppose the realisation was without a team of logistics or a brand and people to develop the brand in-house, or a finance team. In fact, we didn't even have a sales team when we started. Because we had been consultants for such a long time, we had to restructure our business so that we actually had a salesperson and we had marketing and we had someone to deal with all of the shipping and logistics. We needed to excel in each of those areas to make sure the business was successful because without all of those things then it can let down the rest of the things that we do so well.

FELICITY:

Absolutely.

HUGO:

That was a really interesting learning, I suppose, over that time. It did take some quite large structural changes where I was really, I suppose kicking the.. kicking and screaming with some of them. I was far more comfortable having a design business..

FELICITY:

Well it takes you out of your comfort zone doesn't it? So, yeah.

HUGO:

Yeah. It was very clear after a while that that was the right decision. It was very hard to have a company with 16 to 20 designers and no one else if you want a brand that's being sold around the world.

FELICITY:

Absolutely. It's great that you were able to work with your dad who is someone that has your back as well and also have a great relationship with Mal to last so long. So, that's fantastic.

HUGO:

That's certainly.. I think little did we know that we'd still be working together 25 years later, Mal and I. That was probably one of the really wonderful aspects of this process is that we have quite different disciplines, we have quite different approach to things. Those opposites seemed to have worked really well. I think had we continued to work on the same aspects of the business then it wouldn't have been nearly as successful.

FELICITY:

After working on a bike light, then what transitioned from there to, say, go into the Oi bell or the other products that you do?

HUGO:

I suppose the first of the bike lights that really was successful was the silicone lights with what we called frog light. After the first and second of the silicone lights, we realised that there was a whole opportunity to expand on that category. On paper, we thought, "Wow. We could actually move into all sorts of categories within cycling." So, we started making shoes and the gear and clothes and computers, gloves. We had an awful lot of product. Luggage, I would say probably 25 to 30 different bags; hangers and tote bags and suit bags. All of that was.. Now I've got the dogs.

FELICITY:

Yes.

HUGO:

We have three dogs in the studio.

FELICITY:

I was thinking it's a great friendly work place. Yeah, that's awesome.

HUGO:

Yeah, and maybe the first few hours of the day they do make a little more noise than the others.

We did have a lot of products in different categories and we found that that was wonderful because it was a great strategy. Strategically, it was very good because it allowed me to generate revenue out of all these categories with.. If the lights were not in season because it was the middle of summer.

People would continue to buy luggage, for instance. What we did find though, was that many considered that what we were best in was basically manufacturing lights. So, we've actually moved back to just doing lights and locks for a long time. That was where 80% to 90% of our revenue was generated, so we focused on that.

The Oi bell was something a little bit different though, because one of our top distributors in Switzerland mentioned it to us probably 3-4 years prior to developing it. Then another distributor had said, "Oh, you know, bike bells wildly are very cheap and nasty. " I'd managed to do very well with bike bells and that's something that would sit well within your category. The seed had been sown.

However, we looked at the design and the opportunity and we just didn't really know where to start. It was an idea that had to grow, I suppose, over time and it really took 2-3 years before it was one of those ‘aha’ moments where you suddenly think, "Ah, of course." Everything on the bike that we were trying to design was trying to ensure that the products were elegant and provided a balance with what was beautiful on bikes, rather than stick out like a sore thumb. We wanted it to be more like, jewellery. More very stealthy so you couldn't see it, so it was part of the bike rather than an addition that you might buy. That design philosophy has been much of the way we've worked within all of our products, so applying philosophy into that particular product, it then became very clear that it just needed to wrap around the handlebar. That was the basic brief that we set about, trying to really develop.

It was a process that then lasted probably four months, the design. There was two or three of us who were working on different aspects of the product and through that period, we decided that it would be a great opportunity to actually use Kick Starter to develop this product. We had the product pretty much finalised in the design, but not in its manufacturing. So, we hadn't gone totally.. We had managed to solve most of the problems when we decided to do that, so the Kick Starter campaign was a wonderful process for us, which I suppose really was designed more as a marketing platform for us, rather than a funding. We wanted to have an opportunity to put the product out so that people would see it because it was a new category within cycling for us. We felt that that was a legitimate approach, but the success of that on Kick Starter blew us away. It was, I think, 25,000 backers.

FELICITY:

Wow.

HUGO:

92 countries and we ended up selling over 35 or 40,000 bells in that one month. The video was seen over 500,000 times, so it was a great opportunity to use it for marketing. Up to the year since that was put in the market, I think we sold just over a million units. It's a testament, I suppose, to the idea of a product which doesn't follow an existing pack of other products.

FELICITY:

Yeah.

HUGO:

We tried to do something innovative and it was different, but it still has a reference back to the fact it was a simple bell. Price point was important and the fact that people could get their head around it, could see it, and understand it without having to explain it also made it a little easier to sell.

FELICITY:

The design of it, Hugo, reminds me of Apple products. It's really sleek and simple and contemporary and yeah, it's super appealing. It reminds me of that; how Apple designed their products. That's what it reminds me of.

HUGO:

We do have quite a few Apple products in the studio.

FELICITY:

Yes.

HUGO:

The design philosophy is not dissimilar to that. As a company, I suppose what we try to do is to remove the complexity in products, mostly in the way that they move. It has always occurred to the whole team here that if someone is gonna spend.. And is passionate about the cycling and goes out and buys a bike that they're very proud of, the worst thing they can do is to put a whole lot of accessories on there that ruins the aesthetic and makes the bike look like a cheap, Chinese..

I don't mean that in a nasty way, but it just cheapens the whole aesthetic of it. That was really, we felt that was where our niche was.

FELICITY:

Yeah, the visual of it is very, and the aesthetic is actually outstanding. I think that really comes through with your products.

HUGO:

Thank you very much.

FELICITY:

You can see they're well thought through. Got a great team.

HUGO:

Yeah, we have a fantastic team.

FELICITY:

What are you doing as your next step? Where do you see the horizon from here?

HUGO:

It's very exciting at the moment. We sat back.. I think every few years as a business, or within a business, you try to reevaluate where the growth or the opportunities lie. Us, the biggest opportunity we felt that it is a very competitive landscape in cycling. We've looked at trying to broaden our horizons to different channels. Most recently this year, we just launched into the outdoor space. The trail space. We're looking at doing that; we did another Kick Starter a few months ago with a product called Bandicoot. A head lamp.

FELICITY:

Yes, I saw that.

HUGO:

That was very successful and we've taken that to a number of the trade fairs around Europe and America to find distributors in the outdoor channel, which is privy to be very.. Again, the take up's been fantastic.

FELICITY:

'Cause that product's a crossover product, isn't it? It's good for both cycling and running.

HUGO:

It is, and people think everything from camping, to sewing, to all sorts of different opportunities.

FELICITY:

Right. It's so flexible.

HUGO:

The newest products we have within our cycling range are called BWA All Power and they're a modular range of bike lights that are a little bit like a power tool. Like a Ryobi or a Bosch, where you have the one power pack. Different skins might be in. For Ryobi, it's a drill and a saw and a sander and a jigsaw and a vacuum cleaner. For us, it's a bike light, a flashlight, a head lamp, a blue tooth speaker, camping lamp. It'll come with solar. It'll come with a whole range of other products that expand our range into bike packing and touring.

That'll go into the outdoor and running, so there's a great opportunity in this range of products to really start to develop and innovate in areas that we haven't traditionally been working, which for our design team is the most exciting thing that we've done for a while. Our marketing team have been working very hard to try and stretch the brand to cover not just cycling, but also the outdoor categories in such a way that we don't alienate any of our current client base. It's really breathed some excitement back into the company from everyone's perspective because we have new markets, we have new distributors, new sales and new countries, going to new stores.

Not without its problems, though..

FELICITY:

No.

HUGO:

Because.. in markets feel that they would like to have access to all these products and not everyone sells into an Apple store.

FELICITY:

No, that's right.

HUGO:

We have a little bit of work to do there. We've been..

FELICITY:

Oh, that's lovely. That's fantastic. Like you say, it's an exciting new chapter.

HUGO:

Yes, absolutely.

FELICITY:

Are there any rookie mistakes or common problems that you see over and over again, Hugo?

HUGO:

Within our own business? Or generally?

FELICITY:

Generally. I think that it's always easy to critique yourself and your own business 'cause you're always looking to improve things, but I'm sure you've been around a while and you travel extensively.

HUGO:

I do think the hardest aspect really, is getting all of those.. As I mentioned earlier, the idea of having discipline in one area. Or an expert in one area and then not understanding the importance of either good packaging, or point of sale, or maybe customer service is not something that's actually been important. That's one issue.

I think also, there's without a question the importance of brand for products is key. I do see in a lot of trade fairs where people come with one product and the brand probably hasn't had a lot of thought put into it.

The other thing, I've been working with some other companies just on the basis of their new image; the model which they've tried to use to distribute products. The retail environment today is changing so rapidly that with internet and Amazon being a large part of retail sales, it doesn't always mean that people would look to have a distribution network or use traditional retailers. But it's very hard to scale a business in that way, see some companies who have come to market with a product where the overall business model doesn't add up for anything else but online sales. And to merge that into a traditional brick and mortar retail can become more of a challenge.

I think there's lots of things that you learn on the way. I would actually say that probably most of the people who are starting, I'm surprised at how effective their ability to market and put product in the market is.  

The rookie mistakes are really not as obvious, I think, as the successes that we see where people go out and try hard and manage to succeed with a single product really effectively. That's pretty much driven more by, I suppose the ambition of being successful, going to a trade fair, finding people to back products and they're off.

HUGO:

That wasn’t.. I didn't see as much of that probably 10 years ago.

FELICITY:

No, yeah.

HUGO:

Sort of startup companies that are really going out and having great success.

FELICITY:

With the advent of being more online, even like you talk about Kick Starter and all those things that are now available, they weren't available with social media and all that sort of stuff. That wasn't available 15 years ago. It's really only come into the fore probably in the last five years, I think, in a more mainstream way.

HUGO:

Yeah, which really provides access for funding and provides access for business mentors and..

FELICITY:

Exactly.

HUGO:

Which, as you say, it wasn't available. So, it really does mean that there's a lot more innovation and on a small scale. It's a great opportunity for people to get involved in..

FELICITY:

Yeah.

HUGO:

Things that they feel passionate about.

FELICITY:

Absolutely. I know that you sponsored the Hunter brothers and also some other athletes, so tell us about your sponsorships or what you do there.

HUGO:

Sponsorship, at any one time we have events for teams all around the world. They tend not to be the large, Tour de France type teams just because of the cost involved, but we opt for more boutique or startup phase sponsorships. Also, because it reflects our brand more effectively, as well. The Hunter brothers are a fantastic team, also out of Melbourne, and just the quality of their design and the quality of the way that they've clutched the market and their overall thinking behind what they do, it really reflects this sort of spirit that we have in our business. So that was an obvious one and we try to work quite closely with them on a number of levels.

There's a really interesting team, Coachella, in America, who are a racing team. We've also sponsored them in the past. The Chrome Cinelli Record team. There's another couple teams in a similar vein to that. Plus, a number of individuals who do cross-continent touring, bike packing. We will provide them with visibility gear and some funds in order to do what they're trying to achieve. As I said, this is everything from what used to be called ‘alley cat races’ and small races in Chicago or Japan or wherever they happen to be. These are the great way of being able to get in touch with, I suppose, good, compassionate riders who still feel strongly about bikes and the whole subculture that they're involved in, rather than necessarily a commercial side of cycling. That's also, I suppose, where we feel we'd like to be associated because the large Tour de France type races, I suppose, has enough visibility as it is. We don't see we add much value in that.

FELICITY:

No, that's right. Yeah, exactly. It's good to be more at the grassroots level athletes and people, and it does compliment your brand well. I can see that. It's fantastic; it's a good alignment.

HUGO:

Yes, yeah. We certainly have lots of people contacting us for sponsorship and we encourage them.

FELICITY:

That’s great to know, well I’d like to thank you for listening to your story and sharing your story with us, Hugo. It’s been fascinating and people can find you; Know is spelt K-N-O-G so the website is www.knog.com.au and Knog also on Facebook, Instagram, Twitter and YouTube. We’ll put all those details in our show notes.

So, thank you very much for joining us today, Hugo.

HUGO:

Absolutely.

FELICITY:

Thanks for listening to the All Torque podcast. We'd love it if you would leave us a rating and review on iTunes. This helps us to deliver content you want to hear about. Please take a moment to share it with your friends and family on Instagram and Facebook. I'm Felicity Dales, see you next episode for another story of inspiration and motivation on the All Torque podcast.

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