By Eric Peterson / CompanyWeek | Mar 20, 2016
www.koostik.com / www.cycleandcart.com
It all started with a styrofoam cup with an iPhone-sized slot cut into one side.
While crude, Simon's prototype Koostik did the trick of amplifying his phone for a better and louder listening experience.
Then he put his woodworking skills to the test and built dozens of prototypes. "The sound quality was getting better and better with each iteration," says Simon.
After carving more than 50 versions, he came up with the original Koostik, a sleek wooden speaker that's strictly acoustic -- no electricity required.
The product went viral soon after its 2010 launch on Uncrate and other websites. "Within a week, we were backordered for months," says Simon. "We still haven't spent any money on marketing. It's all been done for us."
And it's proven a great strategy when the stars align. To date, tens of thousands of Koostiks have been sold to customers in 45 countries all over the world under the tagline, "Technology made natural."
Simon has since made several iterations of Koostiks and variations on the theme for different iPhone iterations from walnut, maple, cherry, and ambrosia maple. Largely sold direct, the products retail for $79 to $99.
"They're all made by hand," he says of the manufacturing process. "By myself, I can make about 400 pieces a month."
He mills wood down to blocks and then routes, machines, sands, glues, and finishes those blocks into Koostiks, and Jancy shines them with lemon oil and beeswax before shipping.
Koostik is just the latest in a long line of small businesses for Simon. "I've been entrepreneurial all my life," he says. "I go from one business to another."
The common thread is woodworking, much of it by hand. Simon's resume lists 23 years running a kitchen and bath company before Koostik, and he's made skateboards, intricate wooden rockets for hobbyists, whiskey ladles, and custom furniture along the way.
At Koostik, he works with his son, Mike, as well as his wife, Jancy, who he worked with at the kitchen and bath contractor.
"We were looking to do something different," he says of launching Koostik.
He makes the Koostiks and other products in an 1,800-square-foot shop in Englewood the company moved to in 2012 after two years in the Simon garage.
"We started getting large and bulk orders and came here," says Simon. Clients have included Restoration Hardware and Red Envelope.
After the initial spike, sales have slowed and Simon came up with innovative variations on the theme. The Pivot is now the most popular product. "It allows you to use any of your iPhones," says Simon.
The up-and-down nature of the Koostik market led him to launch another brand in Cycle & Cart, making custom work carts on three-wheeled bicycles for coffee vendors and other mobile businesses as of 2012.
He's made about 10 to date, and the carts start at $10,000 and often include faucets and other features for which Simon says his background in kitchens and bathrooms has been invaluable.
Challenges: "Seasonality," says Simon. "It has been all along."
The rate of change in consumer electronics can also be problematic. "We've just tried to keep up with Apple," says Simon. "The problem is the manufacturers are all over the place."
Opportunities: "The opportunities are evolving as we go," says Simon, citing corporate accounts as one. Koostik has made laser-engraved speakers for Heineken, Chrysler, and other big brands. Minimum orders of 50 or more units get about 40 percent off retail plus laser engraving for $5 a pop.
Simon is also looking into making wireless wooden speakers. "We're looking at developing our own Bluetooth solutions," he says. The concept -- dubbed Haikoo -- is a closed system with no wires and app-based controls.
On the Cycle & Cart side, he sees potential developing a turnkey operations for mobile shopkeepers. "It's a business model that depends on the city," says Simon. "It needs to be bikeable."
Needs: "I'm looking for seasonal employees now," says Simon, after downsizing the company from five in recent years. "We get really busy around Christmas time."
The shop is set up well to scale Koostik, but "if we get more into Cycle & Cart, we'll need some different equipment," he adds.