Rich Couples

In 2005, Larry Andreini approached two entertainment producers about a possible television show, but their meeting didn’t lead to a TV hit. Instead, the pair gave Andreini, an entrepreneur with a track record that includes founding a customer loyalty program and a telecommunications exchange, the concept that would become his next business: Ridemakerz, a do-it-yourself custom model car retailer.

At the time, the pair, Gillian MacKenzie and Jane Startz, had been hammering out an idea for a business, dubbing it Construct-A-Car. And although they thought it was a potential blockbuster, they needed help to execute a business plan, raise money, and recruit a team to translate the concept into a business. “The minute I saw it, I thought what a great idea,” recalls Andreini. “My immediate reaction was that I couldn’t believe someone hadn’t thought of this before.”

Actually, someone had. That someone was Maxine Clark, the founder and chief executive of the wildly successful Build-A-Bear Workshop, the St. Louis-based chain of customized-teddy-bear stores. Since launching the first workshop in 1997, the business has expanded to 300 shops across the U.S., Canada, Asia, and Europe, with sales of $437 million. Clark had come up with a similar toy auto concept in 2002, internally called “Build-A-Car” but had put the plans away to focus on running the company, which was experiencing double-digit growth. “We had many requests from parents who wanted something different to do for boys,” she says. “Boys love cars and video games.”

Filling a Void in the Market

Not long after, Andreini, partner Norm Pozez, and Startz were able to set up a meeting with Clark, thanks to a connection that Pozez’ father had with the Build-A-Bear founder. “I said, let’s put our best brains together,” Clark says. “There was nothing really at retail that was exciting for boys except for skate parks and computer games. Boys do not shop like girls. There was a real void in the market. But I had no time to really work on this until Larry and Norm came to me with their Construct-A-Car.”

Following the meeting with Clark, Ridemakerz went from 0 to 60 fairly quickly. Andreini and his investors raised about $5 million in seed money—including $700,000 from Build-A-Bear—and set about figuring out how to manufacture parts for the customizable model cars.

In June, Ridemakerz opened its first store in the entertainment complex Broadway at the Beach in Myrtle Beach, S.C. On July 20 it is set to unveil its second shop at the Mall of America in Bloomington, Minn., and there are plans to open two more—in Indianapolis and Fredericksburg, Va.,—in the fall.

No Two Cars Are Alike

Although the traditional toy market is relatively flat, both the video game and car segments, normally the purview of boys, have been robust. According to a “State of the Industry” study by market researcher NPD Group in conjunction with the Toy Industry Assn., the toy industry hit $22.3 billion in sales in 2006, only a 0.3% increase from the previous year. By contrast, the overall video game segment increased 19%, to $12.5 billion, in 2006 from the previous year. Anita Frazier, a toys and video game analyst at NPD, says that among boys, the vehicle category was up about 6% from 2005 to 2006, to $1.9 billion.

Still, Ridemakerz is trying to merge the near-extinct traditional model car hobby with the interests of 21st century boys.

full source and article BusinessWeek
image source RideMakerz

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