wohnzimmer orange sofa
announcer: now, "executive suite " with ted nesi. ted: welcome. always like to have you. we will be talking manufacturing -- a new furniture-based startup. we have some alum doing an interesting model -- some people
saying a better way to do ikea -- anyone sitting there putting stuff together hour after hour, very pleased by that. first, you please to be joined -- please to be joined by peter king, the president and ceo of waterrower. there machine is on "house of
cards," which the main character uses. we'll talk about what that has been like. thank you for being here. tell us about waterrower. mr. king: we make a variety of machines -- rowing machines are the principal product.
it was designed many years ago now to emulate the dynamic of a moving boat, in short. we have 30 or 40 different models in that model range. targeted from big-box dealers, togyms. ted: there are a lot of
companies making exercise equipment, apart from the fact they are in a popular tv show. what was unique about your product catching on because they were catching on before the show, right? mr. king: yes, and when i first took over the u.s. side of the
business, we had -- it has grown enormously. we have 186. production has grown to several hundred a day, 300 a day this week. the uniqueness -- the most observable uniqueness is the
furniture affect of the machine. all of our models are done on a variety of hardwoods, so is typically used in the home market, and it has become fitness furniture. that is the unique selling point. we have been able to
go down market, and up market as well. ted: is there a larger trend -- has rowing taken off more? mr. king: if you look at rowing, there are rowing machines on the titanic. you should not quote me on that. i remember going into the
historic homes, and their circa 1897, and there were rowing machines. they have been around longer than you or i, but they did say -- fade back in the 1970's, but then treadmills, elliptical, a married of products took over -- myriad of products took over.
ourselves have blossomed and rowing machines are all over the place. ted: you see them a lot. it is quite a workout, to. o -- too. mr. king: yeah, and one of the
biggest, orange theory, one of the biggest in the world, expanding into japan, europe, and their footprint is based around treadmills, rowing machines, suspension training. we have between 10 and 15 in each of these gems, and there are over 400 with another 300 in
the pipeline. it has always been a great exercise, but it has been relaunched. ted: the business -- some people say your machine is a character on "house of cards" because they are written in. how did you get involved -- did
they reach out? mr. king: they reached out, and it was written in the wall street journal article that i'm sure you read that said we went the extra yard. they were looking at a few different pieces of equipment.
a treadmill, an elliptical, and a rowing machine. they just chose ours. it was just chance. if we had not gone down there and helped them out -- we did some training with kevin spacey, his personal trainers, stuff
like that, and it required a lot of support, but the success has been great. at the time, we were not even aware it would be released as a series on netflix. we had been on tv many times before -- one episode, one night of a certain week.
the beauty with the netflix exposure -- we are still getting people watching it for the first time. that is around the globe. ted: did you see a pop as soon as the show started to be seen -- did you notice impact right
away, and that has that been sustained? mr. king: we have. i think they release the series on the one day, and all must immediately bench watching started because that was their first series. we could tell, because we were
selling a lot of the machines. it was always our third or fourth model, and now it is our second model. ted: how did you end up in rhode island, specifically more -- you are actually from australia.
mr. king: well, i was backpacking around the world in london, came upon the machine there, and we licensed the machine to start importing it. we developed a european license, and started manufacturing over there as well. one thing led to another, and we
look to merge the two companies, and a satellite company, before it became a takeover, and that is how we own the u.s. business. the inventor and the founder of the machine -- he was in new york, on the
u.s. national team, and he settled here. he was more of a designer. there is a designing bed in rhode island -- bent here in rhode island. he found some cheaper space in warm. that is what you have in
the state for startups, cheap manufacturing, old, historic manufacturing spaces. it is said it cannot be filled. it is a dollar 50 a square foot, and they still cannot fill it, and it is amazing you cannot run a business at that cost of
square footage. that is how we're the you rhode island -- how we ended up in rhode island, and we stayed here, and prospered here. at that time, we manufactured in the u.k., australia, the asian market, and in the rowing machine, anyway -- we do a lot
of other categories done in the lauren factory. ted: right here in rhode island. we will talk with peter king about waterrower and expansion project. ted: welcome back to "executive suite," i am ted nesi , and we're
having a manufacturing day. we're talking to peter king, the president and ceo of waterrower, which you are starting to see all over, including on the netflix show "house of cards/" you talked about how the company ended up in rhode island.
give us an idea of the scale of the operation -- how many are you turning out a year, how many shifts do you run? mr. king: we have two shifts at the moment. the second is a wood shafting shift.
we have about 125 people on day shift, and another 25 on the night shift. they produce around 300, 350 a day depending on the models, so we are doing 60,000, 70,000 a year at present.
going back to what we said before, when we started, we did 180 machines the year before we acquire the u.s. side of the business. ted: how long does it take to put one together? mr. king: it takes about five minutes.
a handful of injections. -- instructions. ted: i was thinking about the construction -- mr. king: depending on the model, it is anywhere from an hour to two and half hours. the labor value is not that hard
here. it depends on outside supply, stuff like that. ted: it is even at the museum of modern art store in new york city, a comment on the design of the thing. -- complement on the design of
mr. king: there are design stores that carry it, so it bridges or from fitness to be an object of design. ted: we are taking this in november, 2016. will christmas time the big for you? mr. king: winter is a big time
because exercising indoors because more preferable. we have an uptick -- it is to be 30%, or something like that -- a dip in the summer, but we have been doing so much in the commercial market, thegym market, we have been pretty consistent.
we will probably go up 10% or 50% during the winter months. ted: you are in the midst of a major expansion project. we have an old building dating back to the 1970's, and it was derelict when i first walked in there.
there was water pouring through the ceiling, and stuff, and we have made it into a purposeful facility. we had a new warehouse edition -- 9000 square feet on the eastern side. we previously developed and not thousand square feet on the
southern side. another 1000 square feet lunch cafeteria for the production staff. that has happened in the last year, getting through planning. anyone who has tried to build anything in rhode island understands the difficulties
getting to the checks and balances, with good reason, for the most part, but you still have to get through them. there are a lot of agencies you have to go through, where all through that. we have to turn out the office building.
we have been in temporary offices for about a year, and we are building that hopefully will be finished in april of next year. ted: tell us when you decided to expand -- did other states try to lower you away?
mr. king: still do. ted: did you ever consider it? mr. king: of course. i guess, if it was a business decision, we probably would have. the local politicians, the planning levels, the government. like that -- the reality is
there are better places to do we are lucky we have a privately-owned company. we see the base in the community as being important to us. that has kept us in rhode island. had it been a purely commercial decision, we probably would have
moved, sadly. i am sure a lot of businesses are like that. ted: talking about some of the frustrations -- if the governor came to you and said where could we take out some of the pain points that might make it easier so you do not say you would be
more probable to move? mr. king: the cost of doing business here is one thing. one of the lures is purely tax. i had the governor in a couple of weeks ago -- we had manufacturers day, and she did a tour of the factory, stuff like
that. i also met with dan, the lieutenant governor. a few days after the pair we were speaking about manufacturing with the east bay manufacturing board. it is interesting -- all family
-owned businesses, usually multi generational, and they have more reason because of the tenure in the area to stay there than they have to move for fiscal reasons, and that keeps them there, but you have to decide what sort of business you want in this. if you want small business -- if
you say they are going to be a family business, a gym , for example, they are not necessarily wealth generators. the importance about the next guest is they are going to be bringing wealth into rhode ted: exports, effectively.
mr. king: the people we sat down with, 99% of us our business was outside of rhode island, a good thing, bringing wealth into in our case, we are over 50% export now, so we're exporting to one of the biggest markets -- china. u.k. is a big market.
italy, france, in your 14 different offices. this morning, i was setting up an office in thailand, for example. we are building. all the parts we are buying from around the world and putting into the boxes, shipping them
back across the world, and that is great for rhode island, and warren as well. ted: that is all a time we have for this segment. before joining me. ted: welcome back. i am ted nesi, and we're talking to john humphrey, the president
and ceo of greycork, a furniture company with a twist. they have a showroom. things for being here. mr. humphrey: thanks for having me. ted: you do a better expression than i can -- what is unique about greycork?
mr. humphrey: it is superior to what we are seen as a once in a generation shift of the combination of the bar base in furniture's and dealers. where baby boomers used to be the majority of buyers, we are seeing these millennials, and
they grew up with cell phones, shopping on the internet. we want to be the furniture company they buy from. they have different needs. they live in cities. they are moving around, very transient. ted: they have less money.
mr. humphrey: less money, that is for sure, and we are trying to design furniture around those needs. ted: you pitched it, and a lot of people have written you up as the ikea comparison -- the furniture in the flat , and it
can be challenging and time-consuming to put that together. talked about how you try to iterate on that model of furniture and change it. mr. humphrey: that is where the opportunity is in the market, to go head-to-head with ikea.
if you want to go further upmarket, compete with west -- west elm, frustration hardware -- those customers are fully served and we do not want to compete with them. you have to take the digitally motivated, millennial customers away from them.
they have specific needs -- get the furniture delivered to them. they like buying things online. show up at their door, assemble it quickly, and when they move, they need to be able to take it apart, bring it to the next house without losing the integrity of the furniture.
we first use that as a constraint as part of our process. ted: nokia would say we do that. there is -- ikea would say there is no room for that. we try to advance, do it in a new way -- we are
online-first. you are creeping into online -- they are creeping into online more and more. when it comes down to is can you create a brand that will resonate with this type of customer.
that is a part of our strategy. ted: we have our were wide shot -- our wide shut. it looks like i bought more "executive suite furniture," the we're looking at a bench. tell us more about it. mr. humphrey: it is from our collection from 2014 -- the top
is solid oak. underneath, there is a mechanism we design that is custom, stainless steel, so the legs actually collapsed right up. this is a line we developed in 2014. we since moved on to a broader living room line where we sell
coffee table, a side table, a bookshelf. this is a legacy piece, but this is where we started. ted: people are chris -- you are from massachusetts, i believe? mr. humphrey: rhode island. ted: your family has a business in massachusetts.
mr. humphrey: yes. ted: why did you start here? mr. humphrey: as you mentioned, our family businesses in massachusetts. we have roots in the lumber i grew up with this type of stuff.
starting a business -- i was never a furniture designer. it would be crazy for me to design and design-dripping company with that -- design-driven company. i networked into the school of the design and found some designers that recently
graduated to the three of us got together at the beginning of 2014 and started the company. ted: were you always -- your family was doing manufacturing, in the lumber business. did you try to do something related to that, or does it surprise you you ended up in the
family business, in a way? it differently was not a straight path. i took a turn and went on the finance path for a little while , and, like you said, i grew up in the manufacturing business. when i was really young my dad
said ok, summer, it is time to come to work. i was only eight years old. by the time i was 12, i was working on a door assembly line, putting together three home doors in somerset, then i got to learn purchasing, supply chain -- all of that.
by the time i was a senior in college, i was, sort of, exhausted from all of that. i decided, when i graduated college, to go into graduate school and got my mba. that is where i took a pivoted and went down a finance path. ted: and ended up coming back.
mr. humphrey: ended up coming back. before greycork, i was working in venture capital. ted: i can see how that shades your thinking -- part of it is you think there might be a trend, you might see more manufacturing.
furniture we thought was on the things disappearing from america, but you think there is some reason we might see more u.s.-made furniture going forward. tell us about that. mr. humphrey: the ecosystem is one of the biggest challenges we
currently have today, and i think it is going to take a lot of work, but we currently work with u.s.-based manufacturing partners to develop all of our furniture. it is really tough to do. it is really gratifying to be able to pull it off.
what it will come down to is us and other brands like us being very collaborative, partnering with manufacturers in the state to figure out how we are going to push the ecosystem further. ted: one interesting thing you did, you use the crowd-funding site, indy gogo.
tell us what you learned about mr. humphrey: being a startup company, we are always cash constraint, and the platform was great for us. what we were looking to learn from that is is anyone actually care about what we are doing, and if they do care, do they
care enough to buy, and what else can we learn from that to help guide further product development efforts? in 40 days, we sold $35,000 worth of product, got covered by 50 different media outlets, and that told us what we were
selling resonated with people. ted: you knew you had a market. so, we have two minutes left -- when you are looking ahead -- part of why you are here is one of my colleagues got your mailing list. she said you should talk to these guys.
what are your future products -- plans for growth, what are you excited about? mr. humphrey: next year will be an exciting year for a spirit we will iterate, stay in the living room, and we will come out -- we say we have a sofa today. we will come out with a couch in
2017 -- something that is more covetable, having a bias toward comfort, but does not lose the punching out, the utilitarian benefits of being able to shift the ship to your door. ted: ship a couch. d think you can do it? have you sat on it yet?
mr. humphrey: we are thinking late-spring, early summer. ted: you have a show room in providence. do you see yourself with a big footprint -- is it going to stay mostly purely online? mr. humphrey: i think opening stores is tbd.
if we do, we will be very methodical in how we invest in storefronts, and right now it is just have to say. we see a lot of demand from new york city, los angeles, and of course, here in providence. it is difficult to have our one store be here and not one of
those other markets. ted: we will see what you decide to do. john humphrey, thank you for joining me. thank you for watching. if you missed the first half, we had waterrower. see you next week.