Interview: Rickshaw Bagworks' Co-Founder Rob Honeycutt on Mass Customization of Bags and More

Rob Honeycutt is one of the most experienced entrepreneurs in the mass customization domain. Being a devoted biker and working as a bike messenger in San Francisco, he founded the Timbuk2, the messenger bag company, in 1989. Timbuk2 was one of the first companies to implement mass customization in the consumer market with its 3 panel bag, launched 1995. In 2001, he implemented the “Build Your Own Bag” e-commerce website for Timbuk2, garnering awards from Communication Arts Magazine and Macromedia. This offering still is today one of the main examples of customization. In 2005, Rob sold his shares in Timbuk2 to venture capital group and partnered with Mark Dwight ,the former Timbuk2 CEO, to start Rickshaw Bagworks. Rickshaw will be a new kind of custom bad provider, mixing mass customization with community co-design. First products shall ship in May 2008. In this exclusive interview, he talks about Rickshaw, his experiences with Timbuk2, and what is coming next in mass customization. Rob was born in Knoxville, Tennessee, in 1959. He attended art school at the University of Tennessee and toured the United States and Alaska on bicycles with friend Tim Evans.

Frank Piller: Rob, your company Rickshaw recently landed a great scoop that brought mass customization on the radar of the participants of the famous TED Conference, when you provided a custom bag to all 1600 participants. Can tell us some more about this project and the feedback you received?

Rob Honeycutt: My partner and the founder of Rickshaw, Mark Dwight, has been a long time TED attendee. Mark had done the TED bags in 2006 when he was CEO of Timbuk2. When Mark and I started working together the TED bags came up again and we jumped at the opportunity. We didn’t actually do 1600 unique bags. We did 800 sets of twins. This came out of trying to figure out the number of different customizable features we could offer and in how many variations. As we were working out the numbers for 1600 bags we hit on the fact that 32x5x5 is 800 and came up with the idea of twins. So we turned it into a game. “Find your twin at TED.”

What is the idea behind your new venture, Rickshaw Bagworks?

Again, Rickshaw is the brainchild of Mark Dwight. Mark became the CEO after the departure of my old partner Brennan Mulligan. Mark took Timbuk2 from a $4M company to a $15M in 4 years and orchestrated a venture capital buyout. By any measure a very successful reign. When Mark left after the buyout he had a one year non-compete after which he decided to start a new brand of his own. Mark and I had become good friends during his time at Timbuk2 and was a big fan of the manufacturing I’d set up there. One of his first calls when starting up this new company was to contact me to partner up with him for manufacturing.

Rickshaw is going to be a great bag company. We’re driven to create value in new and unique ways. We’re definitely bringing in a new form of customization for the bags. We’re taking all the lessons learned at Timbuk2 and taking it to a new level. Both Mark and I have a long history in the bag business. It’s the business we love and I think that is going to express itself is some really really cool products.

But your roots in mass customization are much older. You are the founder of Timbuk2, the original custom messenger bag company and one of the earliest case studies in modern mass customization. What did you learn during your time at Timbuk2, and what is happening there now?

I can’t speak much about what Timbum2 is doing now. I’m completely out of the company and, worse, I’m going to be a competitor of my old company. Needless to say, they don’t tell me the details of what’s going on now. The one bit of data that I have heard is that the standard three panel Timbuk2 bag that I created so many years ago still accounts for 70% of the company’s sales, which warms my heart when I hear it.

I can tell you a great deal about what I learned from founding Timbuk2 and applying mass customization to messenger bags but you have to promise to tell me to shut up if I go too long. I can get carried away on this topic.

For us, in the early days of Timbuk2, doing mass customization was a total fluke. My old business partner, Brennan Mulligan, had turned me onto Joe Pine’s book “Mass Customization” and everything sounded really cool. Great, but what to do? I’d also been reading a ton about Toyota’s manufacturing systems. Great, but how do you do that with sewing? I also had a sales guy for my bags in London who was hounding me to make three panel “rasta bags” but another messenger bag company was already doing that, so I was hesitant. Then I went to a sewing industry trade show called the Bobbin show where I saw two different consulting companies making t-shirts in modular “stand up” production cells.

That was a EUREKA moment for me. I instantly understood how I could create a racking system for cut panels of fabric, combine that with modular Toyota style sewing and make three panel mass customized bags. I just knew that people would find it totally cool and unique. It was a way to differentiate my company from all the other MUCH larger and well entrenched bag companies in the market. I didn’t have big money to compete but I had an idea that no one else could or would touch.

In fact, in hindsight, I think it was probably a good thing that there wasn’t a lot of money available. We would have wasted it trying to do too much. We inadvertently, just as a function of our limited resources, created a very simple mass customization scheme that resonated with our customers.

There has been such a long talk about mass customization, but not really much large scale applications from large companies. What is the reason for this?

For the most part the decision-makers in companies don’t understand mass customization as anything more than a hat trick of colors and features. The companies who do implement mass customization generally take it way too far. Suddenly you’ve got people making really ugly NIKE shoes because there are too many choices. I learned in art school that when you mix too many colors you just get mud. That’s what you get with too many customization options. There’s this notion that you pick up significant revenue dollars by allow infinite variations of a product, and I can draw you a clever graph to prove it, but I believe the result is the opposite. People have a limited natural attention span. When you offer up too many permutations you lose people. I always say that, on the web, the number of clicks it takes to get to the buy button is inversely proportionate to the number of customers that actually get to the buy button. With each click comes a diminishing return.

More than that many companies don’t seem to get how mass customization works with Lean manufacturing. They are two mutually supportive systems. You can literally create extremely broad line of products where the magic is in never having close outs. That is what’s truly exciting about this work! If you look at almost any company’s blended margin there are huge losses (or worse, completely unpredictable losses) in over stocks and stock-outs. Mass customization and Lean is all too often overlooked as a solution to this problem. Again, companies see it as hat trick and not a serious strategy.

No one ever seems to talk about this in relation to what I did at Timbuk2 but while I managed production we never once had a close out sale. We never once had a stock-out on any product we produced. And, I was turning the inventory over 40 times a year. Not only all that but I was shipping custom bags usually the same day they were ordered. People always talk about being able to “build your own bag” online and how interesting and unique that is but rarely does anyone realize the power of the activity behind that.

I believe it was the synergies of all these, and some good branding, that made Timbuk2 successful. But it’s also turned into a hardship for the company moving forward. All the follow on products that came out after I left were produced off shore, but the company had a brand based on supplying a wide variety of colors. Suddenly Timbuk2 started bloating up on off shore inventory, started having close outs, started pushing product onto dealers that they didn’t necessary want or need. The top line grew dramatically but they became operationally no different that any other bag maker. They didn’t apply any of the manufacturing skills I’d developed to new product. I think that has been an ongoing challenge for the company.

There is nothing inherent to the way we made bags in the early days that doesn’t scale to larger companies. In fact, economies of scale help tremendously for mass customization! I think the reason that companies don’t do what I did at Timbuk2 is that everyone is afraid to run manufacturing locally in a high wage country. The prevailing notion is that you make stuff in low wage countries. I personally don’t believe it’s necessary. I wouldn’t produce low cost commodity products locally but the hurdle for producing domestically, for almost any size company, I think is far lower than what people seem to believe.

What would be your main advice for a manager who wants to lead a mass customization implementation?

Keep it simple. Don’t get overly enamored with what is possible. Focus on your customer. Sometimes the very best applications of mass customization are almost invisible to the end user. It can just a way of providing a broad selection of products to the end customer without needing to hold a burdensome level of inventory. Sometime giving the customer a “build your own” option is great, but not in all circumstances. You really have to get to know your customer and find out what will be most meaningful to them.

To conclude: What is, in general and beyond your industry, the greatest mass customization offering ever – either one that is already existing or that you would like to get in the future?

I don’t see this as a one best application of mass customization. I see mass customization as a broad solution for what ails most industries. I think mass customization can be applied to virtually any product, or family of products, and be used to reduce waste, improve quality, increase variety and vastly improve overall manufacturing productivity. Mass customization is so much more than just “build your own.” When you get the right manufacturing systems coupled in behind the product offering, that is when you see the true power of mass customization.

I think the door is just starting to open for mass customization. There’s a brave new world out there just waiting to be customized.

You can reach Rob Honeycutt at rob@rickshawbags.com

Comments

[Sanka Coyle]

The last comment by Rob Honeycutt brought it all home to me: "There's a brave new world out there just waiting to be customized." Rob’s concept has me re-thinking my problem solving design/ organization business.

Agreeing with Rob's comment -
If I lessen the product choices for my clients, will my profitability increase?

Although I apply customization thru use of Feng Shui in my services, when it comes to design I have followed the concept that uniqueness reigns. I have the mind that doesn't stop until it is right for you / my client. The all important "however clause" -as Timbuk2 has been profitable with its custom messenger bag, equally important is Rob's Eureka moment of "variation on a theme" seen in the Rickshaw bags. Hmmm I'm still thinking ....

Although producing 1600 bags presents a huge variable, there is a pattern to the madness. I see the link to be "whimsey". We function highest when organized ... "however" ... our spirit craves whimsey .

Consider mass customization as the solution, and whimsey as the "raison d'être." Both speak to desire.

In “customizing” this piece well recognized phases are used. I wonder about Rob’s customization of his business names. Both names begin with TIM and RICK, English/ Scottish male names. Tim means "Honor God"; Rick means "Brave Ruler". While I am at it ... Rob is English/ Scottish and means "Bright Fame." Customization? Whimsey? Rob ... how did you come to name your companies?

Thanks for your eye opening piece.
Best regards,

Sanka Coyle / SANKA reSOLUTIONS, INC.
info@sankaresolutions.com
Mother of Astra Coyle / Mother-in-law of Tim Evans who biked with Rob.