How I Built This with Guy Raz - Springfree Trampoline: Keith Alexander & Steve Holmes (2019)

Episode Date: August 30, 2021

In the late 1980s, a New Zealand engineer named Keith Alexander wanted to buy a trampoline for his kids. After his wife said they were too dangerous, Keith set out to design his own—a safer trampoline, without metal springs. He tinkered with and perfected the design over the course of a decade. But he was daunted by the challenge of bringing his invention to market; and he almost gave up. At that point Steve Holmes, a Canadian businessman, bought the patent to Keith's trampoline, and took a big risk to commercialize it. Since the start of the pandemic, sales of Springfree Trampolines doubled, and since their launch, the company has sold nearly 500,000 trampolines worldwide. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This show is in partnership with Airbnb. This past summer, I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries, visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the home we booked on Airbnb. It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb.

Your place, with all of its personal touches and its amazing location, could make someone else's vacation even better. Your home might be worth more than you think. find out how much at Airbnb.ca slash host. Hey everyone, just want to let you know that next week our team will be back from our August break. And really, we can't wait to bring you a brand new episode of how I built this and many more after that. Our new lineup of shows starts next Monday. But today we're going to round out the summer with a really fun episode from the archives. This is a story of an engineer from New Zealand and a businessman from the other side of the world

who shared the same vision for the perfect trampoline. I decided to invest in some fundamental research, and I wanted to answer myself one question. Did any retailer in America believe that trampolines were dangerous and so dangerous that they wouldn't sell them? The answer was yes, and that was Costco. The CEO of Costco was a man named Jim Senegal, and Jim said, I will not sell trampolines.

Wow. And so I'm at my mission. to try and sell Costco a trampoline. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on today's show, how a shy New Zealand professor with a crazy invention

and a Canadian businessman who believed in its potential teamed up to create spring-free, what they call the world's safest backyard trampoline. So you might remember a while back, we did an interview with James Dyson, And Dyson, of course, is the inventor of the Dyson vacuum cleaner. And he described how he came up with his vacuum. He worked in his backyard shed.

He built prototype after prototype after prototype, testing and perfecting his invention. And for a lot of inventors, that's a familiar story, right? Finding a problem, tinkering until finally a solution. But the next part of the Dyson story, the part where James Dyson manufactured the vacuum cleaner scaled his business and then became one of the wealthiest people in the UK? Well, that's not exactly the typical inventor story.

Because for a lot of inventors, the end goal is the patent, the patent that someone else will buy and take to market. Because a lot of times, inventors don't have the time or resources or ability to go into business themselves. So today on the show, we're going to do something a little different. We're actually going to tell two stories. The story of one man, Keith Alexander, who invented a safer trampoline, maybe even the safest trampoline ever. And then the story of Steve Holmes, the man who took that invention and made it into a commercial success.

Because even though Steve and Keith aren't technically business partners, Springfree trampoline couldn't have been a success without one or the other. Keith Alexander grew up in New Zealand. His dad was an engineer. And at first, Keith wasn't really sure what he wanted to do with his life. So he joined New Zealand's version of the Peace Corps, and for a while, he worked as a grade school teacher. But then, he decided to go back to the University of Canterbury in Christchurch, and he found that he actually really enjoyed engineering. Yes, I started doing my engineering degree at Canterbury, and suddenly realized that was what I loved.

I wish somebody had told me many years before that I was actually an engineer. I found I could get A's there quite easily. So I did a master's and then did a PhD. And were you the kind of engineer who just always loved to tinker in like a tool shed? Like were you always tinkering away at things? Well, yes, I was always tinkering, especially through my PhD and had to have a workshop there. You always had a workshop? That's right, a bench.

I put up a bench somewhere if it wasn't there. I had these tool racks that I made with all the tools on and I could take them off the wall, pack them up, take them somewhere else. What would you do? What would you make? Well, I made all sorts of things. Did an art exhibition. I made a six-foot mousetrap for that art exhibition, a collapsing chair. I made walk-on-water shoes.

In fact, I funded myself through my PhD by winning walk-on-water competitions. Wait, sorry. Let's break this down a bit. What's a walk-on-water shoes? Radio Avon, which was the radio in Christchurch at the time, put up this competition. A walk-on-water competition, a thousand-dollar prize. Wait, sorry. They said to their audience,

hey, we have a competition. If you can figure out to walk on water, we'll give you $1,000. That's about it. That's about it. Okay. Wow.

At that time, my father had been developing some walk-on-water shoes in Auckland. He and I had been playing around with it because we had a dingy and we'd been figuring out how to do this.

You need some flotation. Yeah. The competition put limits on on how big these flotation things could be. So it ended up being, you weren't allowed to have anything longer than one meter.

and it didn't take much for an engineer to work out how big the piece of polystyrene had to be so you could carry your whole weight. I see. Okay, so you were coming up with some kind of flotation device that you could put on your feet and you could sort of walk on water with that device. That was balanced that would allow you to kind of, you know,

hover on the surface of the water. Yeah, that balance thing is the first big step. And the solution is put your feet on the bottom. So you cut a hole in it and you put a bit of plywood on the bottom. so your feet go right through to the bottom, and then it stays upright by the side. Oh, so the polystyrene is around your ankles? That's right.

And you invented this? Yes, my father and I invented this. We had to make it fit the competition with it. So I flew back from Auckland where I'd gone to stay with my parents, and I built these shoes to compete in this competition. And I managed to win the competition two years in a row, and then won a third one in Auckland, and that helped fund my PhD. Because you've got a thousand bucks.

Yeah, back then a thousand bucks was quite a lot more. It's more like 5,000 now. Wow. So what were some other things that you came up with or you tried to invent? Well, for the art exhibition, there was quite a few there. One of my enduring experiences was having a haircut during my PhD at university, and this lady was giving me the haircut, and she said, do you realize you're thinning on top?

It was really embarrassing. So I thought that would be a good thing for young guys to have because you can never see the top of your head. So I made this board patch inspector, that's what I called it. There's a couple of mirrors. So you look in one mirror and you can see in the other mirror and you could move the levers and it would adjust the mirror so you can see the top of the head.

You could stand in front of a mirror, move a lever. It would reflect the other mirror and it could show you the top of your head. Exactly, and you could see whether you're going bored. What did you do once you finished your PhD? Well, at first I thought if I want to come back and do academic life, I really need some engineering experience. I don't think I'm a valid teacher of engineering unless I've got some engineering experience.

So I moved back to Auckland and got a job in an engineering consultancy. What kind of work did you do? I started off as a valuer. They wanted a valuer. What is that? What is that? I knew nothing about what valuation was. Okay.

It was looking at a piece of machinery and working out how much it costs, how old it is. And after two weeks, I was getting pretty good at it. Yeah. After two weeks, they found I could do other things as well. working for a consultancy, you got a variety of things. There was quite a bit of insurance work. There was crash investigations.

There was a bit of court work as well. So it was quite a broad range of stuff. But I wasn't particularly happy with that because it all comes down to the money. In the end, it's all, how much have you been able to invoice this week? Yeah. And I really like spending time on things, putting more time into it and thinking it through properly. This is like, I guess, the mid-1980s. Yes.

You were late 30s, early 40s. Yes. Were you married? I got married in 1985, yes. So it was while I was at the engineering consultancy in Auckland. And did you have kids pretty soon after? Yes, about two and a half years later, in 1987. Your first child was born?

First child was born. How many kids do you have? We've got three. So my assumption is you are doing consulting work. got a young family and this is probably a pretty steady lifestyle

like right yeah so when you would come on from your consulting job would you come home and go into your the work bench area and tinker and

build things much to the regret of my wife yes she took her a while to get used to that so you were like the mad scientist in the back of garden working on

your crazy ideas Not all the time. Not all the time. One of the early ones was a magnetic flying machine, which was supposed to use the Earth's magnetic field to fly. I was very proud of what I did, but it didn't work. Do the laws of physics actually support that idea? Yeah, yes. In the end, one of the best ideas would be to go to the South Magnetic Pole and put a big ring of conductor material around the magnetic field there and put a huge current through it, and it would actually fly into space. Wow. But it's kind of hard to get there. Yeah, it's not a very good place for a spaceport. It sounds to me that what really motivated you was just this idea of trying to solve problems. Like, is that right? Is that how you would explain it?

That's pretty good, yes. If other people haven't been able to solve it, I want to solve it. That's a real challenge for me. That's something that excites me. No one else has done this. I want to do this because no one else has done it. So, okay, so what, like, what was it that eventually, like, made you start thinking trampolines? Well, when I was a kid, I'd love the trampoline. I just loved the idea of being in the air, but you couldn't buy a trampoline in those days unless it was a gymnastics trampoline.

And we had one at the school, and in the gym class, you get 30 kids there, and we had to get on, jump, three bounces, seat drop, get off, the next person. That was it. That was my jumping. And you love this thing. And I love this thing. I only get three jumps? Yeah, and that really frustrated me.

So when they started to become available in the shops, and I had a young child, I thought, right, we've got to get one of these. Of course. Of course. She's only 18 months old. But, you know, let's start a young. And then I'll be able to bounce on it too. And so I said to my wife, you know, we've got to get a trampoline for Katie.

And she said, no, I take it to play center. They don't have a trampoline at play center. They're just too dangerous. And this is in like 1989. This is 1989, yes. And she said trampolines are not safe. I think, all right, well, I'll just prove her wrong. I'll look at the research and see what I can find.

So I looked at the research, and sure enough, even in New Zealand, there'd been some research done on the increase in injuries from trampolines. And I thought, well, they really are dangerous. Maybe I can do something about it. I'm an engineer. I should be able to do something about this. And that's when it started. So you look at this research and you realize your wife was right. were not saying.

Damn it. My wife is right. She's right. Damn it. Yeah. Yes. But you wanted a trampoline and you wanted one for your daughter. So I had to think of a way around that.

So what did you do? So I thought, right. Well, if I can design one, I'm sure a trampoline is pretty simple. Surely I can design. I've got a PhD in engineering. Sure. And I love designing things like this. Surely I'll be able to do it.

So let's design one that she'll accept. And maybe we can even sell it. I don't know. So take me back to that moment. You're thinking, I want to see if you're if I can come up with a trampoline, where do you start? I mean, do you, there's no internet at the time. I mean, there's no easily available internet. So how did you even start to think about how you would do this? Well, what are the issues here that we have to solve? And the

traditional trampoline has got a steel bar around the outside edge and springs right beside it, and then the mat that you jump on in the middle. And I can see that it's dangerous because the accident rates have gone up, and it's pretty obvious. You give this nice, bouncy thing, things to kids and they'll bounce all over it and they'll lose control and they'll fall on the bar or they'll fall down the hole between the springs. Or they fall off? Or they fall off. But the thing they'll probably hit first is the steel bar around the edge.

That's the thing that impressed me most. I thought that's steel bar. That's not fair. Let's see if we can get rid of that steel bar. That's a good step. So I'm thinking, well, inflatable things are soft. Why have we replaced the steel frame with an inflatable ring, just like a beginner tube, and then stretch the trampoline mat across the top of that.

Would that work? Oh, I see. Like a giant heavy-duty inner tube tire. And then you would have like a canvas inside of it and the springy part would come from the inner tube. At first I thought, right, well, put springs on. I mean, we can put rope around there to hold the springs and we could have the mat connected to the springs.

So I sketched this up and I got a canvas company to make a mat for me and I got some trampoline springs and some rope. I borrowed a, they called it a sea biscuit at the time, which is like a big inflatable. Like a zodiac, but circular. Yes, that's right. And you towed it behind the boat. That's what it was for.

So I borrowed one of those from the canvas company, actually, tried it out, and it seemed to work. At that time, my son was about two and a half years old, and he bounced on it. He could bounce on it, all right. It was only about the height of a chair. So if the kid fell off, they didn't have far to go, and the edge was inflatable and soft.

So flatable rubber. So you actually literally, made this. You stretched canvas over this giant rubber, tire boat dingy thing, and you had your kids jump on it. That's right. So that's the first one. Then I thought, right, let's

make a purpose-built one. So the one that we formally made, and I paid a couple of thousand dollars for, just had the mat sewn into the top edge of this big ring. And that was good for the kids at the time. And your wife was happy with that? She was

totally comfortable with the thing. He was really happy with that. This is something the kids could actually pick up and cut around the backyard. And this was like, how big was it? That was about eight feet across. The mat, of course, was more like five feet because it was on the top of it. The big

problem was it, well, several big problems. Number one, the material cost for that was about $800. Back at that time, just the material costs. So there's no manufacturing in that at all. And it always leaked. There's always somewhere that

The air would come out? Yes, it was supposed to be airtight. It didn't matter how many times I pulled it apart and tried to find the leak. So there was a problem, two problems there. Third problem, it just wasn't bouncy. I mean, I couldn't get any height on it. This did not bring you back to your school days where you had those three jumps. That's right.

Those massive giant jumps. Where you could get lots of air. You were getting like a foot off the ground, maybe, 12 inches or something off the ground. Which is pretty safe for kids. You don't really want them. When they're three years old, you don't want them jumping. too high. So it was great. It was great for the kids to have it. But it wasn't what I wanted. Okay. So you start to realize that this thing is just not going to fly. This is not going to be

the thing that, I mean, it could be fun for a while for the kids, but it gets deflated and it can't jump very high. And anyway, you can't market this thing. So what do you do? Do you go back to your, to the garage and start again? Well, around about that time, I sat down and summarized all the sketches I'd got and all the ideas I got because this is not bouncy. I've got to come up with other ways of doing it. And I went through a whole range of ideas and came up with a several quite complicated ways of using springs. So at this stage, I was working at the university. You got a job at the University of Canterbury in Christchurch. In Christchurch. Teaching, mechanical engineering, I'm assuming. Yes. I had a contract. Only a contract. It wasn't a

full-time job. So I didn't have tenure. But I had a job there. And that meant that I could, for educational purposes, give students projects to do. So the final year of engineering, the students get an individual project that would go the whole year. So I put that up as a project. Here's an idea for making a trampoline completely differently with springs in a different way. What can you do as a student? What can you come up with? So just to get a sense of when this is, we're talking about the mid-1990s here, right? Like 95, 96, somewhere around then? I started at university in 96. I ran a couple of university projects in 96, 97. And I gave him pretty close guidelines because I put a lot of thought into it. Here's a way I think we could do it. Could you build one? Could you do the analysis on it? And at that time, I had this idea in my mind. And I found it very difficult to imagine I've never seen anything like. It was a bit like a basket with the these are things, say, like fishing rods. Obviously, if you caught a, fish on the end of a fishing with a fishing rod. That's going to bend. It'll keep some tension on.

It's flexible. It'll keep some tension on. Maybe I could make one like that. Out of that material. Out of something like fiberglass, like a fishing rod material. And I thought, well, if you stuck a fishing rod in the ground over there and you stuck another one over here and you tied something between them, you get the tension. But then they're sticking up. These things are sticking straight up. And if you're on a trampoline on the top and you fell on it. Because they're vertical, if you fell right on the edge, you can impale yourself on them. So what if we laid them over so that they have 45 degrees, then if you landed on them, they'd bend out. So that was the idea. So just to picture this in my mind, the idea was, could you get some kind of material that's like a fishing rod, but shorter, obviously, and angle it at 45 degrees in a circle, let's say, and stretch canvas over that, and essentially that would be the trampoline.

You would bounce on the canvas that was laid over these angled rods that were bendy. That's a pretty good description of it. So you had students working on making a prototype of this new trampoline design. But by the how big are these things? They made full-size ones, eight-foot diameter. And had it work using those like fiberglass fishing rods? The fiberglass rods? That seemed to work all right.

That seemed to work all right. It was certainly it was more bouncy than the end up. inflatable one. So I was going in the right direction. It had more promise. It wasn't exactly there yet, but it had more promise. Yes, you're right. I was thinking, I need to get a commercial person involved about this stage. I don't know how to commercialize it. I don't know whether it's going to be commercial at all. I had no idea. Let's contact someone. All right. I want to ask you about what I would imagine was a slight complication, which is at this point, you weren't Keith Alexander backyard tinkerer, you were also Keith Alexander

professor at this university. What did that mean about all the work you did? Because oftentimes, as is the case in the U.S., when you work on something, the university, it's their property. If it's MIT or Stanford or Harvard or whatever. Well, that's exactly right. What I'm supposed to be doing is publishing papers. Yeah.

But they did have this new policy that just came in a couple of months after I'd started, they said, if you come up with an idea that's commercializable, you've got to tell this new commercialization office that we've just developed that you've done it because it belongs to the university. 100%. And I thought, well, I have already thought of this.

I've been doing this at home for a while, and now I've got a job at the university. Well, I can't commercialize it. I don't know how to do that. They say they know how to do it. Fine. I'll sign the paper. I'll sign the paper.

So now every idea you have, they own. Which is not uncommon. It's not uncommon. So I went along with that. I'll let them have it. If they can commercialize it, great. So I took it to them, showed them. They said, oh, that's fine.

That's a kid's toy. See what we can do. But in the meantime, they were just like, yeah, do whatever you want to do. They were not paying attention to you. They're not paying attention. What they wanted is something that's going to make millions of dollars. They don't really want a child's toy. No.

They want like a biotech something. Nanotech. Nanotech at the time. is the thing. Yeah. I was competing with nanote. They're like, enjoy your kid's trampoline. We're paying attention to these guys working on nanotech.

Yeah. So I looked in the yellow pages. I found the biggest trampoline manufacturer in New Zealand. He was selling 400 trampolines a year. I rang him up and he said, yeah, I'm interested. Send me some photos. I'll be in Christchurch. I'll come and have a look.

Huh. So he came and I had them all there for him to try and have a look at. He jumped on them. He jumped on them. He said, well, that inflatable one, I like that. but not as a trampoline. I like, it's a great pool toy. The one with the rods, yeah, that's got some promise.

But it's too low. It's got to be high. It's got to be dangerous. It's got to make the kids think it's dangerous. It's got to be bigger. It's far too small. So I want something that's 10 feet diameter. And it's got to pack down so it can be shipped.

So you have to be able to pull it all apart and assemble it. And it's got to be able to be assembled by a solo mother with no tools in half an hour. on Christmas Eve after she's had a glass of wine. Oh, wow. Because I always get people ringing me up on Christmas Eve saying, how do I assemble my trampoline? So you've got to sort that out. So if you can sort out those problems, I'll be interested.

And you thought? And I thought, okay, there's a challenge. And we've got a company now that's interested. And I'll pay one of these students who was happy to work over summer to build this 10-foot version and see what we can do. So that's what we did. Over the next year, we had this student working away. he built up this 10-foot trampoline that was higher.

We could test it, we could pull it apart, put it together again, we could put it all into boxes. We couldn't assemble it in half an hour. But all the other things we could do. And we found that there was another company in New Zealand that was quite a specialist in Pulitzered of Fiberglass. In fact, they had used it as a spring, and we were using it as a spring.

Fibglass springs. And they were experienced that. So we started forming a relationship with them. So we formed the relationship with them and this company who were making 400 trampolines a year. And we started to build some prototypes for customer trials, five prototypes for customer trials. And how did it turn out? Well, it was, I was pretty pleased with it. I thought we were going to market at this stage because I had a commercial person.

We had five products with customer trials. and the guys from the commercial arm of the university came along to have a look because there was a bit of terra going on. Yep. They had a look at it and they said, this is not market ready. You need another $50,000, $100,000 to make it market ready. And then they went away. The university said this.

Yeah. And so what did that mean? Well, I thought that was the end of it. Really, I thought I can't get $100,000 or $50,000. I thought it was market ready, but I was very depressed. And you needed the university's permission because they owned it. They owned it. I didn't have to do any more. I was doing all this work supervising this and trying to get the money to support making these customer trials. So the dream dies over. Well, I thought so.

But I always just like challenges. And my mother-in-law, she'd ring up to talk to my wife. And when she'd get me on the phone, she'd say, and Keith, how's that trampoline going? I hope you're still working on it. So this is a problem in the world that needed to be solved. Parents can't buy a safe trampoline. I've got to do something about this.

I'll decide to keep going. Around this time, the commercial arm of the university hired another person, and he'd actually taken product market before. And he had a look around New Zealand trying to find if there are any investors in New Zealand that were interested. And in the end, he looked in Canada and found someone in Canada and said, Keith, we've got someone in Canada. I'm going to send him a photo and we'll see where we go from here.

When we come back, almost 15 years after Keith started tinkering on a new, safer kind of trampoline, he gets to see his invention finally come to market. Stay with this, I'm Guy Raz, and you're listening to How I Built This from NPR. Hey, welcome back to How I Built This from NPR. So it's the early 2000s, and Keith's University finds an investor who's interested in the trampoline, and his name is Steve Holmes. And at this point, Steve's in his mid-30s, he's living in Toronto, and he's already been involved in a couple of successful small businesses.

So Steve knows some investors. and he's got access to a little bit of capital. And eventually, Steve and Keith get on the phone to start discussing the details of Keith's invention. At the end of the phone call, I remember saying to Keith, okay, Keith, can you mail it to me? Can you send it to me? Ship me the trampoline. Yeah.

Just ship me the trampoline. And there was pause because I think the money was an issue, right? You know, like, how am I going to ship the trampoline? Keith was probably trying to figure out. I said, I'll send you $10,000. Will you ship me the trampoline? And he said, yeah, well, it should be the trampoline. So, Keith, what do you remember about that call?

It was similar, like, you were on the phone with Steve, and you just kind of explained this invention to him? I find it pretty hard to remember. I was really anxious about anything like that. That call would have freaked me out. Yeah. And shipping something overseas, I don't even know that you had to dial 001 to get to America first.

One of the things that did make an impression, though, as Steve said, I'm sending you guys $10,000 so that you can do what needs to be done to get me information that I need and get me a trampoline. And I didn't have that sort of money. So when someone says, please ship it to the other side of the world, it's a big deal. And when someone says, I'll give you $10,000, that was a big deal. So, all right, so how long did it take for it to arrive a couple weeks? I think it was six weeks in shipping.

I can't remember if we air freighted or not. We at the time had a backyard, which really didn't have any grass. So that was a problem. We had a patio. And so when I got it, it was a little overwhelming. So I assembled it. It probably took me about three hours and several bruises. And my kid's interesting that at the time were 16, 14, and 12.

And so my 12-year-old daughter jumped on it and she loved it. All right. So she's jumping up and down on this thing. And you realize from that maybe there's something to this? You know, when it comes to good ideas, I believe you measure it by the reaction of the people you hope to sell it to. And there wasn't a kid in the neighborhood who didn't want to jump on it. Everybody came to your backyard? Well, anybody that we'd let in.

And so you get caught up in the enthusiasm of your kids. So when did the switch go off in your mind where you thought, okay. I'm in. Like, I need to pursue this thing because at this point, you'd send $10,000, but you did not have a business. You were not in business of the university. You didn't own this patent, nothing. It was just a, you just had one really great trampoline in your backyard. Yep. And so you had presumably a lot to consider before you were going to invest the money in buying this patent. You had to find out how much it would actually cost to manufacture it because you had to model this out, whether this was going to be a viable business. Did you do that? We did. October of 2002, we had secured the patent with effectively a letter of intent, agreement and principle. We had locked up some period of time. And the first thing we did was we went to the super show in Las Vegas, Nevada. Which is like a toy show?

No, it used to be the sporting goods manufacturing association. Okay. This is what year was this? This was January of 2003. I went to see what the reaction would be. brought you built one and you displayed it there we built one we took a prominent spot at the show we hired uh some dancers from sigfree and roy to be our jumpers along with my daughters my youngest daughter and her three friends and we just said like this is go big or go home did did you

I mean how how big was the trampoline market at that point well I would have said it was pretty small I think that we had measured that we thought that the trampoline market that maybe it was a $500 to $600 million trampoline market globally. So you were looking for a bite out of that $5 to $600 million. Yeah, I've never been greedy. A small business can be a good business. Absolutely. I guess we took a philosophy internally, which was to think big, but start small.

And so we tried. And what was a reaction at the show? Like, what do people say to you? Well, it was really quite amazing, actually. We had lots of different reactions. The first we had was from a retailer who came up and said, well, you can't sell this in America, you don't have an enclosure. And I said, well, hold on.

An enclosure isn't mandatory. They said, yeah, but no retailer will sell a trampoline without an enclosure. And then I had somebody come up to me and said, you know, I have a patent on the enclosure. And you'll never sell this product in America ever. Because I have the patent on the enclosure. On the enclosure. And then I had the, at the time, the CEO from what was a very large sporting goods retailer, come up to me and said, you know, this may be the most innovative product we've seen at this

show in years. So you walk out of that show and what are you thinking? It's not dead. It's not dead. So I decided to invest in some fundamental research and I wanted to ask myself one question. Did any retailer in America believe that trampolines were dangerous and so dangerous that they wouldn't sell them? What was the answer? The answer was yes and that was Costco. The CEO of Costco was a man named Jim Senegal and Jim said, I will not sell trampolines. Wow. And so I met it my mission to try and sell Costco a trampoline. Okay, but before we get to Costco, so at what point did you say, all right, I'm going in?

We're going to get this. We're going to buy the patent and production rights. Well, I think we were finished. I was advancing all of this very quickly. I think contractually it was all locked up by probably May of 03. And what did it cost you? To be honest, guy, I wouldn't even remember the number. More than a million dollars? Yes. More than a million dollars to buy the patent.

Yeah, to buy everything when everything was all said and done in all the settlements with the university, I think. It was probably close to that, yes. Okay, so Keith, you are a professor at the university. You come up with this invention. They sell the patent to Steve, and presumably you get a check for it. Yes, the arrangement with the university

was that whatever he paid would be split three ways. So I got a check. And that was huge for me. And I'm curious. At this point, did you, I mean, did you kind of have to deal with the fact that, you know, the rights are sold to someone else? And now, like, this guy, Steve is going to make it and, like, go run with it. That's right. And that was a very sobering moment for me.

And I thought, yeah, okay, I guess that's the way it is. I guess I can let it go now. I don't feel like it, but I guess that's the way it goes. There's a check coming and I've got to think of other things. And then Steve says, I'm going to need a bit of a helping hand because I don't have any trampoline engineers. So do you mind giving me a hand with this? Give me some technical input. I said, yeah, yeah, fine.

Okay. Yeah. And that came in fairness. You know, Keith and I had a conversation once about risk and reward. And so I asked him, what level of risk are you willing to take versus the economic reward you expect? And he said, well, I have, I don't want any risk. Yeah. I don't want any risk.

And so we reached an agreement at that point as to what his role would be and how he would be compensated. And so it was good. Okay, so Steve, you are running the business from Canada. And Keith, you are still in New Zealand consulting on the, I guess on the engineering side. Right. Yes. Yeah. So what was the next step?

Well, Keith and I created the spring-free enclosure. and we kept looking at all of the principles of our design and said, it better be soft. Huh. It can't be hard. And everybody had produced enclosures with steel poles. And we kept looking at this American patent and saying, we can't infringe this.

So we didn't sell any products. We didn't make any products. We just spent a year building an enclosure for the Springfield Trail. Okay, so you had left that convention in Las Vegas determined that you had to solve this problem, that if you were going to make this thing as safe as possible, as safe as possible, it had to be enclosed. That's it. And we decided that we would give ourselves the deadline.

And the deadline would be the January Super Show, which was to be held in Orlando, Florida, in January of 2004, the 2004 Super Show. And by the way, what made the enclosure different? How were you able to create this thing that was safe? So Steve said, we've now got a relationship with the people who make the protruded fiberglass. You've got to make the poles out of those same material.

And I said, well, they need to be strong enough to hold this net up. So I thought, we can try it. Had a post-grad student who's needed some money, so he's working in our backyard. We got these 12 of these around the trampoline, fitted on, and tied the top of them together with some cord. Let's see what happens when we put a net on. So I said to this post-grad student, you've got to spend the next few days finding some sort of net.

Talk to all the fishermen people around the place, see if we can get some net. and after about four days he'd come back with some fishing net that he lashed on there at the top and the bottom so that it was more or less like an enclosure in a sense different than the ones that were out there. But it was this really flexible thing. And so then when I came home from university

and the kids were still on it, they were bouncing off the walls. They were running into it and bouncing off. And I'm thinking, hey, this is really something we didn't expect. We've got a new play surface here that other trampolines don't have. We've made a rubber room now. This is way better than I expected. It's not just a safety net.

This is another play surface. All right, so you've got the enclosed trampoline. You're ready to introduce us to the world. 2004. Go to the Super Show in Orlando, Florida. And they had a competition there, which was called the product of the year, basically. And if you got to a finalist or the top 10, you would be disqualification. displayed in a specific area of the super show independent of your booth. So we made all the applications

necessary and we became a finalist. This was the unveiling of Spring Free. This was it. And how did you do? How many, did you get any orders? Well, we got one important order by Costco Canada. Wow. They decided, okay, if we do it in Canada, there doesn't seem, it's not as litigious, they're all really nice people there. They don't seem to sue each other. Maybe we'll try it in Canada. And they put a test in for an essence that worked out that we put in a test for 400 pieces. Let's try selling as in Canada. So they put in order for 400 units? Yeah, we had about the first order was 400 pieces on a trial. By the way, and by the way, where were you manufacturing them in New Zealand? Well, these first 400 units, we made, I guess, 480 or 490, I think,

something like that in New Zealand. It was one container load? One container load. In New Zealand. And what was the retail price for? Well, at that time, the retail price we put it to Canada was $9.99. Wow. But just to clarify something, this was at that time going to be one of the most expensive trampolines, right? So it was a big risk. And you had to make the case that this was worth the cost. Yeah. I mean, our value proposition, when we had that very first product that Orlando is the same as what it is today, which is that we provide the world's safest trampoline. We produce it out of the highest quality materials. We give the longest, warranty, it's a 10-year warranty on everything. It's still that today. And so that was what we kept selling on the retailer side. But you were selling them for about $999.99. That's a thin margin because it probably cost you. It was more than that. We were losing money on every product.

We had to do that to find out if we could create a market. All right. So they roll them out in Costco's in Canada, and how did they do? Moved very fast, very, very fast. So did they put in a second order? Well, because we had put it on a test, and that was the spring of that year of 04, the next recurring order wasn't going to really take place until their next spring by, which was 05. So then it was, oh, crap, what do we do between now and then? Yeah, because you've got to generate some revenue. Oh, yeah. And you're still making these in New Zealand, which is presumably expensive. We had transitioned right about then.

We knew we couldn't continue. they were costing about $1,450 to make one. To make one. Wow. And so we knew we couldn't continue. And one of the things that it had materialized at the Super Show in 2003, I said to you that I had people come up to me with various things. I had an individual come up to me with a business card who said, I manufacture sporting goods in China. If you ever need a manufacturer, call me.

Yeah. And when we reached the stage with Costco at the end of 2004, we said, okay, we got to make the call. Which I have to assume was going to be an important move, right? Because it's going to reduce your costs pretty significantly. Well, here was the thing that was so critical to us is that Keith's IP was essential. We had to make sure we could get intellectual property protection. Because in China, everything's copied. Not everything, but a lot of things are.

It is. It is. You have to be careful. And we had to be careful. And the other thing is that the rods that Keith had done were really, they were all about technical know-how. And so we weren't prepared to move that. So even to this day, most of the original manufacturing components, the rods and the net material that we use, we are using the exact same manufacturing partners. They've come a long way, the whole way through the whole journey.

We've never deviated from that. But we moved all of the steel and 100% of the labor associated with producing an assembly into China. All right. So you've got to wait until 2005 for this next big order. How many people were on your payroll at that point? Well, I think at that point, between our engineering group, our sales teams, we might have been 35. And you're burning through cash? Yeah, we were burning cash.

We were hanging on for that Costco delivery in spring 05. So when Costco came back to you for their spring of 05, you know, purchase. It worked out to be about 3,265 pieces in 05. 3,265 pieces. Yeah, felt good. But you needed to finance that, right? Because they don't pay you first. They pay you like 90 days later.

That's right. So I hit the street and found somebody who bought into a Costco PO. So, oh, so this is somebody, and this is interesting, this is somebody who looks for people like you who get a purchase order from Costco need financing to actually make the product and they'll loan you the money at a high interest rate. At a high interest rate, yeah. That was your lifeline. It was our lifeline. And to be fairness to this day, it is the reason we survived and thrived. Even though that order alone was not going to make you profitable.

No, we weren't profitable. You still had a long road to get it. No, we weren't profitable. But it proved that we, because Costco represented a much bigger animal than just Canada, we went from Costco Canada to Costco, UK, because UK was viewed as being safe. And we got to go from Costco Canada to Costco, Japan, which made no sense to us. We didn't really know what we were going to do in Japan, but we ended up selling 370 trampolines in Japan through Costco. And then we got to go on Costco.com.

their e-commerce new platform for them, not in store, in 2007, I guess it was. So Costco is up until this point, up until 2007, your biggest contract? Virtually in the northern hemisphere and our only. We were selling direct in places where we could, but they were basically 90% of our distribution. Wow. So you aren't out, 2008, they stopped. They stopped selling the trampoline. Yeah, that was probably the hardest point.

So what happened is that as we got more and more and more successful with the product in Costco, some of the buyers, they were really proud. And so they would show off the product in a real flamboyant way, you know, having it in a prominent position. Inside of Costco's. Inside at Costco's. And Mr. Senegal was, he opened every copy. The CEO. Yeah, he came to every Costco opening.

And there was a big opening in Halifax, Nova Scotia, on May 13th. It was a Wednesday, 09, never forget the date in my business career. And he had gone into the store. And at the time, he was still opposed to trampolines. Even though we were being really successful, he was still uncomfortable with it. And so when he walked into the Halifax store, I got a phone call from the president at the time of Canada, Costco. they said, we're done. I said, what do you mean? We're done. And they said, we're done. I said, no, no, no, I don't understand. We're not, how can we be done? And we skipped a

part guy, which is in 2008, we decided to build our own factory in China because we weren't satisfied with the quality. So I invested about $5 million in building a Chinese factory. We did it because this was Costco. We were going to be in store. This was going to change the face of everything. And so we opened that factory in October of 2008 and all in preparation for our 2009 with Costco. And on May 13th, we were told we're done. And it was just because they had gone overboard in that store, they had made the trampoline one of the single biggest highlights in this grand opening in Halifax. And he was just pissed. The CEO. Yeah, he was just pissed. Because it was so present and visible, he walks in there. And he

and says, what is this trampoline doing in the center of my Costco? That's it. Those are the exact words. I don't think he really knew. I think we were below the radar. We were doing great numbers. We were doing great numbers for sporting goods. And so I was told, if you need to talk to Mr. Senegal, you got to call him on a Saturday morning in Seattle.

I was given a telephone number to his direct aisle to his desk. And you called? And on the Saturday morning, shaking in my boots, I called. He was extremely polite. He shared his reasoning within reason, and he said, I've made my decision, Mr. Holmes, but I will honor any purchase orders that we have issued up until the end of this month. So any purchase orders that are issued up until the end of the month will honor those purchase orders. And I hung up the phone, and I went, oh, crap. And my next call was to every Costco buyer I could find.

Give me a P.O. Give me a P.O. Give me a P.O. Give me a P.O. Because you knew you got a month left. I had less than a month. I had just that was the 16th of May. It was a Saturday morning. And I had 14 days and P.O.s took longer than that to get usually. Wow. So what did you do?

Well, it was a really good business skill learning session. I stepped back and I said, okay, we have a product that has unbelievable safety, quality, and innovation characteristics. We have customers who love our product. I mean, our best marketing is our existing spring free. customer. If a spring free customer has a spring free trampoline, if a parent who says, well, I really don't like trampolines, they'll sell it for me to other friends and neighbors. And 50% of our sales came from our customers. So we said, wherever spring frees are in backyards, we have to make it really easy. And our biggest market at the time, based on

Costco delivery addresses, was California and Seattle. So we opened our own first spring free retail store on the off ramp of the Costco headquarters. In Seattle. In Seattle. So I was in, this is in 2000. Well, this is in late 2009. So there you had a showroom. People could try it.

Kids could jump on them. Yeah. We called it the Spring Free Experience Center. And that store proved to be phenomenally successful. We were blowing the doors off the profits. And we were just going, like, there was, I think there were very few retail stores that were doing the profit per square foot that we were doing out of that store. So that store, I mean, they were just not flying off the shelves because it wasn't off the shelf,

but that store started to just sell these things like, I don't know. Well, let me say this. We had a great dealer network we established as quick as we could in the U.S. They had trampolines on parade floats. They went to every fair. They went to every neighborhood. They connected with the communities because we knew where we had shipped. So we had these, whether it was a pop-up store or whether it was a permanent experience center,

we went to consumers. We went out there, we did the shows, we had the stores, and showed that there was a business model which was different than Costco. And so we took a direct-to-consumer model, and we used Keith as the face of the organization. So he was the one who conveyed the story, the attributes, and the commitment to safety and quality. So Keith, how did you, like, so all of a sudden, like, you've got to represent this product, right, to the world. You got to do media interviews, you got to TV. Like, you are a self-described introvert.

I can only imagine that was somewhat torturous for you to do. Yeah. Yeah, you're right. You're right. Steve did give me warning. He said, would you like to be the Dyson of Springfrey? I said, what on earth do you mean? Well, you know Dyson, Dyson vacuum cleaners?

So I went and had a look and there's Dyson doing his thing. I thought, I suppose I could do that. I said yes to Steve. So then he says, right, well, come to Toronto. We're going to have a week, a week of filming. And I'm thinking, right, this is a big deal. This is not just one or two little afternoons. So it was one of the scariest weeks in my life, really.

So I end up in Toronto in this big studio. and find myself with three cameras there and lights, people all around, and microphones in front of me, and they say, right, well, just talk. And you did. Yeah, so I talk. And then they say, oh, you come across really genuine. You know, you really come across well. And how did it come out?

Phenomenal. It was okay in the end. So here's my question for you. I mean, it sounds like you were actually expanding pretty fast at this point. Yeah, we were over 400 employees. This is by 2000. By late 2010, yeah, I guess by then. We were 400 employees.

What I'm trying to understand is how did you expand to that number of employees when just two years before that Costco pulls out? Well, you know, sometimes you do stupid things. What we did is we decided to, we could have gone home when Costco pulled out, but we actually went deeper. So we increased our commitment in the factory in China. We increased our direct strategy. we increased our ability to open in direct retail stores. Did you have to raise money? Fortunately enough, we had been reasonably wise.

We had been saving for those expansion opportunities in rainy days. So we needed to raise, we probably invested maybe $5 to $7 million in the factory construction and then a couple more million in some other stores. And I think we had a debt raise of about at the time $3 million. But I have to assume 2009, even maybe 2010 were tough years. Yeah, they were very tough years. But we didn't stop investing. We kind of said, like, you know, this is that risk.

We kept thinking that that opportunity, the big, big opportunity was just ahead of us. When did you start to see that light? Yeah, I'd say 2010, 2011. 2011 to 2013 were phenomenal years for us globally. What happened? Why? Well, I give lots of credit to Keith. His design was always flawless.

So that issue of safety that we kept talking about, we now had eight years of experience. So instead of saying, where the world's safest trampoline, but we've only sold 2,000, you know, we were actually saying, well, we've got, there's a couple hundred thousand trampolines out there,

and we actually have statistics now, and Keith started writing research papers and of measuring our statistics, and we were going, you know, we remove 90% of the product-related injuries. So he's taken, His design has removed 90%. And so we got that message out.

Keith's videos and the way we distributed them. And we got traction. And we got real traction. How much does a spring free trampling cost today? Well, we have six different sizes. So it ranges anywhere from probably $1,600 to $2,400. So this is a premium product. I mean, this is an investment that you're going to make for a while.

Yeah, Keith always said that when he put a spring free into somebody's backyard, and I've agreed with them and we've continued that it should be, that's it. They should pay the money. It should go in the backyard. There should be zero maintenance costs and there should be zero support costs. So in other words, if they got a problem, we back it. So we have a 10-year warranty on the whole product. And how many are you selling on average of a year now?

You know, we look at, you know, our probably 30,000 is our annual volume. And we build our business model around that. We've had years that have gone much higher. and we've had some years that have been a little lower based on some of the economics. I mean, we opened a factory in 2008. We lost Costco and there was a global financial crisis. I can tell you that wasn't the best year.

Yeah. So we had a tough year. That might have been an 18,000 piece year. I can only imagine those first four, five, six years. It was nonstop. Just nonstop hustling, working, trying to get this out to market, calling people, getting rejected.

people saying to you want a trampoline, who is this? What are you talking about? No, they're not safe. And is it still like that today? You know, for some of our staff, there's no question. But it's fun. Like, I got to tell you, you know, you want to be in a fun business, be in the trampoline business. Because there's never been a circumstance where when the mom and dad have to see their kid on the trampoline for the first time after they've made a spring free purchase that they don't go.

Wow. This is great. Most people don't know we exist, but when they see us, they go, oh, I get it. Do you have a trampoline at the headquarters in Toronto? Yeah, every one of our offices has trampolines, absolutely. And we, you know, they're constantly being used in various forms. Do you do, like, board meetings on your trampoline? We do, you can see some office meetings that'll occur on a trampoline. Do people just synchronize or they're bouncing? No, no. That doesn't happen?

We're still a one at a time trampoline company. So, yeah. So do you consider yourself to be lucky that, you know, this business has managed to become, you know, sustainable? Or do you think it's because of your intelligence and hard work? Well, I don't know about the intelligence part, but I do respect for the employees of our organization and for my wife and my kids who suffered through the early days. this has been about hard work. I was very fortunate to meet Dr. Keith Alexander, but being fortunate was about a lifelong friend that I got.

And Keith, what about you? Like, do you feel lucky that all this happened? Or, I mean, do you think it's just a product of your persistence and perseverance and grit? It's both of those. Of course, it's both of those. I do feel very lucky to have met someone like Steve who's being prepared to be very persistent.

One of the ways I like to think of it, for me, the invention process, that's my part of it, is that it's like having a child. The moment of conception is quite exciting. And then you carry it and you feed it for years. And eventually it starts to meet people of its own. And then you get less control, less and less control. And who your child meets and where they go and how they grow up.

It's not very much in your control at all. There's a lot of luck there. So in that sense, I've been very lucky. Steve's taken over the part to get it to the customers. So I was doing pretty well. That's Keith Alexander, inventor of the Springfree trampoline, and Steve Holmes, CEO of Springfree. We first ran this interview in April of 2019,

and this past year, with all those restless kids cooped up during the pandemic lockdown, sales of trampolines more than doubled. And according to the company, since its launch, Springfree has sold nearly half a million trampolns. leans worldwide. Thanks so much for listening to the show this week. If you are not yet a subscriber, please do subscribe or follow wherever you get your podcasts.

If you want to write to us, our email address is hibt at npr.org. To find us on Twitter, it's at How I Built This or at Guy Raz. And on Instagram, it's at How I Built This NPR or at guy.org. This episode was produced by Casey Herman with music composed by Rumtine Arablewe. It was edited by Neva Grant with research help from James Delahousie. Our production staff includes Rachel Faulkner, J.C. Howard, Julia Carney, Elaine Coates, Farah Safari, Liz Metzger, and Annalise Ober. Our intern is Harrison B.J. Choi, and Jeff Rogers is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.

This is NPR.