Finish line to the bottom line – October 16, 2006

Gerard Karpik thought his racing success would transfer well into the business world when he and his brother, Randy, started Fast Action Support Team (FAST) in 1985.
He credited luck (and some skill) for his many trophies, but he quickly learned that company ownership was different.
“Business is a bit more exacting and a little less by chance,” Karpik said. “When I was racing, I thought I was a pretty sharp guy. When I stopped racing and started a business, suddenly every shoe salesman in Eveleth knew a lot more than me.”
The path from snowmobile race competitor to aftermarket performance shop owner seems somewhat common. It’s easy to create a long list of former racers with performance shop ties. It’s an even longer list for performance shops with ties to high-level racing, whether through race-applicable product or through direct racer sponsorships.
Playing a new game
The switch from racer to business owner is fresh in the mind of Arne Rantanen Jr., a cross-country racer who purchased Black Magic Motorsports with his father, Arne Sr., in October 2005.
“At the time (of purchase), I knew we’d have to run a tight ship,” Rantanen Jr. said. “I was going to have to do four, five, six jobs and my dad would do a couple of jobs. Everyone had to learn more than their main job. The curve took a lot longer than I would have liked, but it probably went faster than I thought.”
The biggest challenge was learning someone else’s system and another parts book, Rantanen Jr. said. “I had to learn how to create a work order, do accounts receivable and deal with suppliers.”?It took time.
“I’ve probably worked eight hours a day, seven days a week since we bought Black Magic,” Rantanen Jr. said. “You’re constantly talking to people, answering questions, developing products and trying to think of the next big thing to develop that will carve our niche and make us famous.”
Nearly a year after the purchase, the Rantanens know they still have a ways to go. Arne Sr. still doesn’t know how to use the computer. He planned to learn during the anticipated summer down-time, until the release of Arctic Cat’s unanticipated large product line. Arne Sr. does most of the development work; Arne Jr. manages the business end.
“I’d been to school for business management, so I may have had a leg up in a lot of stuff, but this was a lot bigger operation than I’d dealt with before,” Arne Jr. said.
“Our long-term goal is to make this company like it was in the mid-’90s,” Arne Sr. said. “We want to be on top, and we want to be the people who know the most.”
“I think we’re pretty happy with how things are progressing,” Rantanen Jr. said. “For right now, the ship is pointed in the right direction and sales are full wind. We figured we’d add one or two people, and we achieved that. We knew we need to catch up on development, and we were able to do that. The best thing for us was to keep it simple.”
Ups And Downs
Karpik’s experienced the ups and downs that come with owning a business.
It reached the point of near-bankruptcy in 2001, and was restructured again last year, which broke the Blade snowmobile into a separate business unit headed by Karpiks’ brother, David. Co-founder and brother, Randy, left the business in 2004.
“We’re really on the rebound from a tight financial situation,” Karpik said. “We had such a large group of investors, and really the impetus to keep investing into FAST wasn’t there with some of them.” He said the company was able to continue on due to FAST’s intellectual property rights.
“I’ve always been told that when you get to the point of not being able to handle something on your own, you hire an expert who can,” Karpik said. “In the Blade process, we hired a strong talent base to take over. In retrospect, we could have used our own in-house people. They were closer to the product. We had brought in experts that I thought would guide us, but they were so wishful and hopeful that they, as well, overlooked the challenges.”
He’s not shy about his five-year plan for TeamFAST: domination in the suspension segment. “We’re strongly positioned for the future,” he said. “I’ve been developing sleds since 1970 and I’m not going to change that. I have a lot of racing experience and a lot of consumer experience. A lot of companies have younger people who will bring fresh ideas, but it’s hard to find that base of knowledge.”
He said he’s had initial success with the new Airwave suspension. Karpik said he took $40,000 of orders at Haydays. “The Airwave release has really sparked some people’s imagination,” Karpik said.
Also, TeamFAST has diversified with a specialty golf cart suspension business called Kart Komfort Inc., headed up by Randy.
Links To Racing
Racer-owned performance shops tend to keep the competition fever.
Forest Lake, Minn.-based Speedwerx and Hot Seat Performance, both owned by former racer Steve Houle, owes half of its revenues to racing — both with building Open Mod engines for Arctic Cat snocross and hillclimb sleds and selling products to racers. Its consumer product line owes its development to racing, too.
“A lot of it works hand in hand,” said Jeremy Houle, general manager of Speedwerx and Steve’s son. “Everything we learn on the racetrack forwards over,” he said. “Some of the early development of a product we’ll try on the race track, maybe for a year or two. We sell what wins.”
Part of the on-track testing comes from supported racers in different disciplines:?Ron Gilland in drags, Todd Tupper in hillclimbs and Tucker Hibbert in snocross. Speedwerx also built the mill that powered 2006 Eagle River Derby World Champion P.J. Wanderscheid.
Houle said he relies on racer feedback in product development. “The feedback helps just as much as winning,” he said. “We work with a lot of sponsored riders and it’s not always the final results that matter.”
After a year of learning the business, Rantanen Jr. will take his products — and company reputation — to the starting line this winter. He’s also supporting three additional drivers.
“I suppose we’re taking a big risk. The worst case-scenario would be to have your team in last because people would just think your stuff doesn’t work,” he said. “It would be a marketing disaster. But people still relate racing to good products.”
Rantanen said he’s racing to win (“If you go to a race with intentions other than winning, it’s not worth going”), but he does have some ulterior motives.
“If I look at racing from a business standpoint, there’s a lot we can learn from cross-country,” he said. “The general consumer rides more like a cross-country racer. I can get 10 times the durability testing when racing. Cross-country will show stress and strain and not just on pipes, but on anything on a snowmobile. In a 100-mile cross-country race, I’m doubling or tripling the general trail mile. It’s a good durability test.”
Rantanen will consider structuring his racer contracts to include providing Black Magic with product feedback. “If it’s a piece of crap, I’d rather have them tell me,” he said. “We can use the racers in a more controlled environment. Myself, I may be running something really experimental. I don’t think we’ll give racers a product someone just developed the day before. If it doesn’t work or it breaks, it’s better for me to be using it.”
Karpik’s love-hate relationship with racing is swinging back to the love side. The company was heavily involved in racing when it started and was responsible for bringing Finnish snocrosser Toni Haikonen to the United States in the early ’90s. When Ski-Doo hired Haikonen away in 1995, Karpik realized the company could no longer play the racing game.
He called the decision to exit racing “taxing.”
“In my mind, it was not a question. I’d had my feet to the fire for a long time, competing against everyone. I was ready to transition,” he said. That wasn’t true for Randy, Karpik’s brother and company co-founder. “He couldn’t get away from it,” Karpik said. Randy eventually left the company in 2004 and is now working on Indy cars. The company made a 100 percent shift to the aftermarket suspension market.
“At this time, we’re probably recognized for having a racing pedigree, but we do very little marketing based on racing,” he said. That may soon change. Karpik said he plans to outfit some racers with the new Air-Wave suspension this winter. He feels the need to prove the suspension’s mettle to customers who say, “I don’t know if it will be racy enough.”
“After some initial sort-out, I feel we will attain more than our share of podiums,” he said. psb