Success Is in the Bag

Timbuk2 began like many entrepreneurial businesses—it was started by someone whose need wasn’t being met by the marketplace. A San Francisco bike messenger designed a rugged and stylish shoulder bag to carry during his workday. It was so popular with friends and acquaintances that he soon quit his job to start making the custom bags. The new company attracted devoted customers among young professionals both male and female—and fellow bike messengers—but within a few years it was nearly bankrupt. Backed by private investors and a venture capital firm, Mark Dwight bought Timbuk2 a few years ago and swiftly turned the company around. It now produces more than 30 different products, and its San Francisco factory turns out a bag every 15 minutes. Business has been so good that Timbuk2 recently distributed a total of $1 million in bonuses to its 40 non-management workers to celebrate a banner year with sales of more than $10 million. Production has doubled; more than 1000 specialty retailers in the outdoor, bicycle, and personal computer markets carry Timbuk2 bags nationwide. The company’s e-business arm has tripled in size. Most important, the firm now operates with a positive cash flow and is solidly profitable. When he bought the ailing form, Dwight knew he would have to bring in experienced managers and impose a carefully thought out vision for the future. He put together a team of industry veterans and with their help mapped out a detailed five-year plan that including hiring a financial controller and a product developer. The biggest challenge was to streamline production and revamp the company’s existing production methods. Instead of stockpiling inventory, the firm’s executives decided that Timbuk2 employees would make every bag to order and keep none in stock. Doing so would reduce the costs associated with warehousing