Underwriting provided by:
The Laura Moore Cunningham
Foundation

Ryan Harrison, Waterworks-Lamson

Ryan Harrison

Ryan Harrison finally moved to Boise after running the Idaho-based fly reel company Waterworks-Lamson from afar, while his two partners lived a life they bragged about in the Wood River Valley. Their design-based operation also does other outdoor equipment, but the trout reels are their best-known product.

On the company's Idaho roots:
It goes back to 1995. The founding partners were all Californians, myself included and all tired of working for other people - that's the common roots there - and so we formed a business called C1 Design Group in 1995. Two of the three of us were already Idaho residents, had already left southern California for Ketchum, Idaho in this case and I stayed behind in California for a number of years and then I moved to Boise here - fairly recently actually. So we came to Idaho for lifestyle reasons primarily and secondarily because it's a better place to do business than California certainly.

On the focus on their efforts:
I would say that the common theme in our product development has always been outdoor recreation. Our roots go back to the mountain biking industry - suspension technology primarily - and then in 1995-96 we started entering the fly fishing market in a small way and by '97-98 we were deeply committed to the fly reel category in particular and started doing our own designs of fly reels. We thought that the fly fishing industry was an attractive industry for a number of reasons - both product design and business reasons - and the fly reel category is a hard goods category. It's the sort of thing that we know how to do and so we took a stab at that category and then we acquired the trademark Lamson. We were Waterworks initially in the fly fishing industry and in late 1998 we purchased the trademark Lamson from Sage and became Waterworks Lamson and we've been filling out fly reel design offering ever since.

When we looked at fly reels in 1995-96 it was like looking through a window to the 19th century. Reels hadn't changed their designs in structure or in drag format. Things were the same as they had been for decades. That isn't to say they didn't work. Mechanically they were reliable but they were inelegant designs and there were liabilities that came along with those designs.

Physical weights, rods had gotten lighter reels had not. That's the simple way of saying it. They were overly complex - 80 to 100 parts in a reel was not uncommon. It's still not uncommon. Material choices were not ideal and the reason for all of that goes back to who designs a fly reel. The typical designer of a fly reel is and has been a machinist and they're not trained as product designers. That's what we do. That's our background, that's our training, that's our aptitude is product design.

Employees building fly reels

Are you designers or outdoorsmen?
You can't separate the two. I think we are designers because we are active in whatever interests us and that's a variety of things and so we sue these products - both our own but prior to our own invention we're using other products - and as participants in fly fishing or snowboarding or mountain biking or surfing or whatever it is, we use products that are in the market and we develop opinions about them and if we think we can do better than that then we go at it and try to make a business of it. So I don't think you can separate those two things.

On his own pleasures in the business:
My particular background and orientation is a business one as well, not just design, and I enjoy seeing our products come to life, get into the marketplace and then develop relationships with consumers. Our products have relationships with consumers. … That's what I love. I love to be able to have that engagement around the world. I travel - and this happens all the time - I'll be on an airplane and somebody says what do you do for a living and you get into that. And they'll say I have one of your reels and I had this experience with it and it was fantastic.

I met a guy actually one time in an airport restaurant who had told me this story. He asked what I did and I told him and he said that one of our products saved his life. We made a skin layer garment at that time that was just this fantastic technical material and it could keep you warm even when it was wet and it was very fast wicking and insulating and all that. And he said he was trapped in a box canyon in New Zealand in a flash flood and he had to spend the night and it dropped below freezing and he felt like he wouldn't have survived without our skin layer garment. That's a pretty dramatic story but it's that relationship that you can develop with consumers all over the world.

In the activity that they are passionate about you become a real positive in their life and that is gratifying. It's like raising a child and the child turns out well.

On the nature of the company today:
A focus is certainly reels - well, I'll say fly fishing products. We make things other than reels, tools and accessories in fly fishing but 99% of our focus is in fly fishing. We're toying around as I showed you just a little b it ago with some innovative products outside of fly fishing but this is really the bread and butter and what is paying the bills and so that's where the primary focus is.

Why did you move to Boise finally?
Let's see, in no particular order, two winters of nothing but fog and rain. That had a little bit to do with it. In seriousness, when I started this business I was still raising a family and my kids were 3 and 5 and my wife was entrenched in the community and my kids were - they had their friends and all of that so moving wasn't going to be an option unless I wanted to be a single man so I had to raise the kids and get them through the community and their school system and all that and now they're 23 and 19 and on their own and doing great, so that allowed me to make a geographical change. And I was ready to by that time. I was ready to be in a less dense, more beautiful place.

Interesting enough, even though I had been running this business for 16 years and I would travel to Boise, I would travel to Ketchum, it's different when you are just travelling in on business and you're spending a couple of days and you are going up to Ketchum in a couple of days and then you are flying out. You don't really get a sense of the pace and the culture of a place. It's just hard to. But I came up this past May and I spent a month and by the end of that month I knew how wonderful Boise was… It was a beautiful place but I didn't know how nice the people were, how pleasant it is to live here. As everybody knows who lives here it's fabulous. So at that point the light bulb went on and I said okay, I'm coming up. So I moved up in August.

Compare California's business climate and Idaho's business climate:
It is as dramatically different as everything is between the two states anyway. Nothing about California and business in California is oriented towards making things easy. It's make it complicated, give us more money, follow more regulation. …

Up here it's a business friendly environment. It's a freer environment overall I think just individually. Personal freedom and the freedom to operate a business and in all those respects it's not tied up in regulation and taxation and complication, bureaucracy and all of that so you are free to get on with making fly reels and selling them. …

There is so much that Idaho offers as natural advantages, especially in an industry like ours where the imagery of Idaho is consistent with what we do - mountain biking, fly fishing, outdoor recreation. To have a brand that is Idaho based is relevant. You wouldn't want to be based in Monrovia, California in the heart of Los Angeles and be a fly fishing company for example.

The labor force in the Treasure Valley is excellent - smart people, well educated, good work ethic. Never had a problem with any employees in this operation in Boise. Always had problems in California prior to this business. I've had different issues in Ketchum - a different kind of place - but the Treasure Valley, fantastic and that's huge in any business, any business that involves people anyway.

Land is cheap, space is cheap. The government is accommodated. They actually want businesses here, they want to make it easier for you, there are programs you can take advantage of. There are development programs.

Western Capitol Bank is our bank here now and they are fantastic. They really got to know us as a company. In California you are dealing with California banks. You're a 7 digit number, a 13 digit number. It's just not the same. Here, everything is more intimate, more scaled down to a human level and when you are doing business that still matters. It matters a lot - for us as a small business anyway….

And part of the fantastic population of the Treasure Valley for us is that when we need a new employee and we do have seasonal workers who come in at the height of our season and help us out and so on, there's never any problem finding people who are really experienced knowledgeable fly fishermen which is important in the case of our products. And they want to work here because there's that psychic gratification. They're working in a company that surrounds an activity they really love and they're part of it. So that is great here. Absolutely.

Was it the business climate that brought you here instead of Utah or Oregon or somewhere else?
In truth our coming to Idaho to do business wasn't strategically thought out ahead of time and compared to Park City and all that kind of stuff. No, in our experience we were three partners, California rooted. Two of the three had experience going to Ketchum over their lives and in addition to everything else they are are skiers and mountain bikers and fly fishermen and that's where they wanted to be for lifestyle reasons. So in a sense, Idaho won that competition because Ketchum was the place that they fell in love with and not Park City and not Missoula. And then everything followed from that and the business included.

So that's how we got here. But if I were to look at things with a clean slate right now and say alright, we can go anywhere with this business, where will we go and I did that evaluation I'd still wind up here. I would still wind up here because compared to the other places that you might mention - Montana, Utah, Wyoming, Washington state, Oregon state - I'd still prefer to be here because the combination of all the factors. Weather is better, it's more temperate and a balanced season. I think the labor force is deeper and committed and experienced fly fishermen in a way that no other place I can imagine would be.

Boise is more charming and I think better managed. I think it is very impressively managed as a community so that it doesn't wind up to be less desirable in 10 or 20 years from now, I have that confidence. And I look back 10 or 20 years in Boise and I think it has only gotten better in some ways and not worse with growth and development. It's a community of people who really care about the place and so it is being well managed. I wouldn't necessarily say anything about Salt Lake City or Park City or some other places.

So overall I think Boise would still be the winner if I were to start with a clean slate and say where would be the right place to put the business?

What else can the state do to attract and retain business?
I guess just outreach. I'm always kind of hesitant - it's like you find a good surf spot or good spot to fish you don't really want to just shout from the mountain tops. Boise is a wonderful place. Do you really want to shout from the mountain tops? But it wouldn't hurt to - I think Boise is a well kept secret even though I've been coming here for 20 years, I've had a business based in Idaho, a well tread path through Boise and Ketchum. I really had no idea how wonderful Boise was and when I was moving up here I would tell people I'm moving to Boise and a high percentage of sophisticated people would say, Iowa? Ohio? Or they would know where Boise is but they would just not have any idea why I would want to move there.

So it is a well kept secret and I like that about this town, but maybe my recommendation would be if you want to have a targeted kind of company coming here find out how you can reach those kinds of companies and then let them know what kinds of benefits there are in all these ways that I've described - culture and government and banking and all the pieces that come together, employees and so on. All the pieces that come together that matter to a business. What is it about Idaho, what is it about Boise that works for that kind of company.

On one big surprise for a newcomer:
Oh! Can I tell you a story? I love, I love this. This is great. This is just crazy. Coming here from the state of California, Boise is so different and refreshing in so many ways but this one just really stands out:

The Statehouse - beautiful building - I'd been here for a couple of months and seen it from the outside but not the inside and I needed to go to the post office so I parked one block too far the wrong direction and I had to walk around the state building to get to it.

So I had a little extra time to kill and I thought well, I'll see if I can get inside that state building and see what it looks like on the inside. And I walk up to what would be the west end of the building and I'm thinking with a California mentality - of course that door is going to be locked and if it's not locked there is going to be a metal detector inside with guards and stuff and I probably can't get into it. It's a state building. I can't get inside the state building, you know? But whatever, I'll just peek in the window. So I walk up and I look in the window and there's no metal detector and I check the door and it's unlocked and like wow. This is kind of crazy and I walked in and there are no guards, nothing, beautiful hallway and I walk down to the rotunda and checked all that beautiful stuff out and still there's no security I'm going through, no metal detectors and whatever.

And I walk back to leave the door I came in and I see it's the governor's office right there. The office of the governor and there is the receptionist right behind a door. I could just walk in and say hi. I feel - how intimate is that? How nice is it to be living in a place where there is that level of trust, people can be good human beings and operate from those principles and not have metal detectors and locked doors. It just blew my mind.

On making high-end reels:
We came in the market at - not the ridiculous highest, highest, highest end because in fly reels you can do that. You can make a $5,000 fly reel and have six people buy it. That's not a business that we're in, but we wanted to be in the quality or the premium segment of the market and that's where we started and where we developed our reputation. And then as we got smarter about design and manufacturing that enabled us to have some cost efficiencies and we were able to bring those designs and ideas down to lower price points so we now participate retail price points from about $125 to $900. And so that would be a pretty broad range but would still all be considered specialty pro shop kinds of products.

We don't do $69, $49, $89 sports stores and general tackle stores and things like that. That's not our market, not our business. It just couldn't be done in the process and the designs that we would want to bring to the market….

We don't create a product just to be cheap and just to go after that. That's not why we're doing this. We need to be able to achieve the integrity in the design that makes us feel good about what we're doing and that's probably not going to get done much below those retail of $150 and above.

Has the bad economy had an effect?
Oh yeah. Yeah. The economy - how can I describe it? It was very amazing and horrific and everything else all wrapped in one. When Lehman failed within weeks we saw the consumer world just lock up and this isn't just fly fishing. This is everything. It was like deer in the headlights, nobody knew what was going on and people just stopped spending money. No business can survive that forever. You can't just not have revenue week after week, month after month. So that was frightening because nobody knew where this was all going to go.

And then early in '09 the stock market lost hundreds of points every day and so on. So our industry probably - and there are no real reliable numbers on this, it's anecdotal - but our industry probably declined 15% in 2009, year over year. Industry wide our category which is a hard good category - you don't have to buy a fly reel this year, you can defer it. You're going to fish okay, so you're going to fish, you're going to use up some gear and need to replace it - terminal, tackle, flies, tippet and so on. So those categories did just fine in 2009 but rods and reels, hard goods - you could defer those and our categories saw about a 30% decline - my estimation - in 2009. But because we'd been growing market share every year we declined but not by as much. We were off 12% in 2009 - which is still not fun but came back in 2010 and 2011. Had a record year 2011.

But that period of time from the end of '08 until late '09 gave me a lot of gray hair, a lot of sleepless nights. Anybody who was running a business I'm sure could say the same thing. Our business bank failed. First Bank of Idaho was seized by the FDIC in May of '09. That didn't feel good. It was not a year I'd want to go through again. Let's put it that way.

Lessons learned?
What that taught me as a business person for the rest of my life is that there could be surprises coming in from the outside that you can't expect, and so of course right now it's what is happening in the sovereign community of Europe and the impacts on the banking community worldwide. That's the unknown. I'm not expert to access the risk of that. I think certainly it's less risky than what we faced in our own country in '08. But if that doesn't play out in sort of a worst case scenario then I think where the consumers are is a fairly stable place going into 2012 and beyond.

I hope that we work through our own tight credit issues. I think that's hurting consumers and businesses right now in the economy. People can't buy houses, people can't sell houses so we're all kind of locked up on real estate. That hurts real estate values, that makes people feel less wealthy, that impacts spending and it all comes back to credit.

How much of the actual manufacturing is done in Idaho?
We do all of our assembly in Idaho. The manufacturing of our products which is principally machining and secondarily some of the component parts might be injection molded. That vast majority of the machining and injection molding happen in Idaho. If it doesn't happen in Idaho it's happening in Ohio (which is where some people think Boise is) and then we do anodizing as well and that happens in the Treasure Valley. Secondarily it happens in Los Angeles. So if it's not happening in Idaho it's happening in Ohio or Los Angeles for a specific process. So I'd say the vast majority of what we do now happens in the state of Idaho.

Was it hard to find partners to work with?
This is a place where people know how to do things. I like old cars and this is a community of people who know how to fix things, know how to make things, know how to build things, know how to get things done. I see that in my own personal hobbies, I see that in the business.

So no, it hasn't been hard to find either good people in our own company to employ as employees in our own company who know how to put together reels correctly. That's been easy to find. People have that sort of orientation. Or in the case of finding a machine shop that knows how to make quality product and hold those standards and they themselves are fly fishermen so they know what the consumer is looking for in the end product.

Given the population that is in the state, I think it's amazing that we've been able to find as much competence as we've found. You're not talking about 20 million people and all the number of businesses to select from so we've had a very high success rate.