CRESWELL, OR, March 31, 2002 — In its third year now, BowTech faces a dilemma any start-up would envy: The Creswell-based compound bow maker can't keep up with the sizzling demand for its innovative archery products.

"We've been behind since we started," said John Strasheim, BowTech's chief executive and co-founder. "Right now, we have (an order) backlog of 2,200 bows."

Launched in the fall of 1999, BowTech is setting the U.S. archery industry on fire with what the company guarantees are the fastest bows on the market and a growing, coast-to-coast dealer network.

Perhaps most telling, however, is BowTech's growing acceptance among dealers catering to the top tier of the bow market. The company's bows are now considered on par, even superior in some respects, to those made by industry leader Mathews Inc., archery industry observers said.

"There is a growing brand loyalty with our customers," said Gene Shands, BowTech's marketing director. "You've always had Ford and Chevy people," Shands said. "Now you have Mathews and BowTech people."

Bow sales at the privately held company prove the point. In 2000, the company sold about 3,700 bows and posted revenue of $1 million, Strasheim said. Last year, BowTech sold 9,100 bows and recorded $3.5 million in sales. Strasheim this year is forecasting a huge jump to 26,000 bows. He's projecting revenue to hit $11 million. His target next year: 52,000 bows.

And the number of dealers stocking BowTech equipment has increased ninefold since 2000, to nearly 750.

Aside from coping with strong demand, BowTech's main challenge has been to overcome the poor image of the Oregon bow-making industry. Several Oregon bow makers — including Oregon Bow Co. of Junction City — have gone under in recent years, leaving retailers and customers nationwide leery of Oregon bows.

An eye for speed Strasheim said BowTech now holds patents on the world's fastest single-, double- and triple-cam bows, and has three more patents pending.

Bow speed is gauged by shooting an arrow through a chronograph, which measures distance traveled per second. The faster an arrow, the greater its penetrating power.

"BowTech's bows, model for model, are I would say 10 percent faster than other bows out there," said Rob Kaufhold, president of Lancaster Archery in Pennsylvania. Lancaster is one of the nation's largest wholesale archery distributors and the largest dealer of Mathews Inc. bows, Kaufhold said.

"That is a huge margin," Kaufhold said. "People will choose one bow over another for being 1 percent faster."

With archery retailers and customers clamoring - BowTech makes 14 models and plans to introduce four more next year - the company is preparing for a major expansion in Lane County.

BowTech now houses its sales and administrative staff of 15 in rented quarters in Creswell. BowTech also leases a 6,000-square-foot warehouse in west Eugene where 16 production workers assemble, test and ship bows and related products.

Strasheim said the company is looking to more than double its assembly and shipping space, build a bow-coating factory of about 25,000 square feet somewhere in the Eugene-Springfield area, and add a machine shop here. His business plan calls for adding 15 workers by the end of the 
year, and another 15 in 2003.

"Our plans were to grow real slow, but it didn't work out that way," said Kevin Strother, BowTech's other founder and vice president of research and development.

"The products we came to market with just took off," he said.

Fragmented industry
The bow-making industry is fragmented and crowded, with more than 50 bow manufacturers in the United States alone. Growth of bow sales overall is flat, and has been for about three years, with the exception of a few companies such as BowTech and Wisconsin-based Mathews, according to both 
companies.

Shands estimates 450,000 to 600,000 bows are sold each year. Archery associations don't keep reliable tallies of the number of archers — those who hunt or target shoot with bows. But those in the industry estimate the number to be in the millions.

The Great Lakes region, New York and the Midwest account for the bulk of new bows sold each year, Shands said.

Formerly in the equipment auction business before turning to a lucrative career in real estate, Strasheim had been burned in an affiliation in the early 1990s with Oregon Bow of Junction City.

Strasheim was a passive investor in Oregon Bow, which collapsed in 1996 under a pile of debt and what Strasheim called "terrible mismanagement." The company eventually went bankrupt, citing $1.4 million in debt.

Oregon Bow had been using, under license, cutting-edge cams for its bows. Cams are small wheels at each end of the bow that make it easier to draw and hold the bow string. The Oregon Bow cams were designed by Strother, who owns several innovative archery patents. Strother holds the world's 
record for the longest compound bow flight, more than 1,320 yards, using a bow equipped with cams he designed.

Strother said he started tinkering with bows and cams 15 years ago because "nobody made a bow I liked."

Strasheim and Strother, who both lost money in Oregon Bow's demise, decided to team up and try to persuade other bow makers to license Strother's technology.

"I saw a lot of potential in Kevin because he sees ways to improve bows that other guys miss," Strasheim said. "He sees bows like Mozart saw music."

But the two weren't able to hammer out agreements with the bow manufacturers. "We came to the conclusion that we were going to have to start our own bow company," Strasheim said.

A $500,000 investment Strasheim went into the venture with three rules: Outsource the manufacture of every part on the bow, accept only cash or credit card payments, and make a healthy profit.

"I didn't want the headache of running manufacturing lines, and we couldn't afford to offer terms" to dealers, Strasheim said.

To secure a generous profit, Strasheim wanted to target the high end of the market, where bows sell for $600 or more.

With an initial investment of $500,000, they set up a tiny assembly operation in Louisiana, where Strother still lives, took their bow and ancillary part designs to subcontractors for manufacture, and started an aggressive marketing campaign in late 1999.

Strasheim hired Shands, who operated a graphic design company, to run advertising.

Shands came up with a mysterious print ad campaign that ran in a dozen industry publications. The ads simply proclaimed "BowTech. The fastest bow in the world. Guaranteed."

"We told people very little," Shands said. "We wanted to create a `Who are these guys?' kind of thing."

BowTech set up a booth at the Archery Manufacturers and Merchants Organization trade show in early 2000 - the largest display of archery equipment the world — and brought along a chronograph to measure arrow speed.

"We said our bow would shoot 350 feet per second and then we proved it," Strasheim said.

Shands said BowTech challenged other manufacturers at the show to prove their claims. "No one would do it," he said. Industry officials not affiliated with BowTech confirm the story.

The stunt created a buzz, which led to the company signing up 80 dealers that first year.

"This is an industry where there are a lot of one- and two-year wonders," Shands said. That makes dealers leery, he said.

Shands said the archery industry has been skeptical of bows made in Oregon. In addition to Oregon Bow, two other manufacturers in the state started up and then crashed, leaving dealers with no one to handle warranty issues.

"That first year, we tried not to use the word Oregon in anything," Strasheim said.

In 2001, the company offered a money-back guarantee to entice archery shops to carry BowTech equipment. The company allowed pro shops to buy and test the bows, and then send them back for a full refund if they weren't satisfied.

"That really got us in the door," Shands said. "Almost no one asked for their money back."

Taking on big rivals
Now, BowTech continues to draw in new dealers who already carry bows made by industry stalwarts Mathews Inc., Browning and PSE.

One of those firms is distribution giant Lancaster Archery. President Kaufhold said Lancaster signed on with BowTech about two months ago.

"We've been looking at BowTech for a couple of years, but we generally stay away from small start-up companies," he said.

Kaufhold said a good product may get a manufacturer in the door, but it won't keep him in the room if there is shoddy customer service and foot-dragging on warranty issues.

"Their business philosophy - innovation and taking care of their dealers — is what is most important for me," Kaufhold said.

Mike Ziebell, marketing director for Mathews, said his company is still growing, and BowTech doesn't appear to be taking any of its market share. "If anything, I think they are probably hurting our mutual competitors," Ziebell said.

Those who shoot bows are also giddy over BowTech.

Lon Lauber, a free-lance outdoor writer and photographer based in Spokane, is a member of the Mathews Pro Staff who is paid to shoot and endorse Mathews bows.

"I was invited on a promotional trip in which BowTech was a sponsor," Lauber said. "My contract (with Mathews) says I can't hunt with another bow, but I can field test other bows."

Lauber said he took a BowTech bow out of the box, took a few practice shots, then made a minor adjustment to the bow's sight.

``The second arrow I shot with it was a `Robin Hood,' '' Lauber said. That means Lauber split an arrow already stuck in the bulls-eye.

"I went from box to bulls-eye in five minutes," Lauber said. "If I wasn't on staff at Mathews, I would shoot a BowTech."

Jeff Phillips, a columnist and field tester at the Web site 
fastestbows.com, said he has never heard a BowTech bow owner say a negative word about the company or its products. Fastestbows.com accepts no advertising and tends to describe the good, bad and ugly of products it tests — unlike many industry magazines, which seem to publish only 
positive reviews.

"BowTech may still be a new company, but they are a significant player in the market with respect to both sales and innovation," Phillips said.

Looking for space
Strasheim said the lease on the company's cramped production building in west Eugene expires at the end of May.

"We probably won't be here after that," he said. "We need 10,000 (square feet of space) right now, and we need to plan for 20,000."

The company is looking around the Eugene-Springfield area, but has not yet found a site.

Strasheim said BowTech moved its assembly operation to Oregon from Louisiana about 10 months ago in order to allow Louisiana-based Strother more time to focus on new product development.

The company is now using machine shops in Louisiana and Texas to make bow parts from aircraft-grade machined aluminum and composite glass. Strasheim plans to either buy a machine shop in the Eugene area or create his own.

"Buying one that is already running would be a lot faster and would cost me less," he said.

Ideally, Strasheim said, he would like to buy a local machine shop with room to expand for a coating plant. BowTech plans to build a coating plant in the next year or so in order to cut contractor and shipping costs. The plant, expected to cost roughly $750,000, would coat bows with camouflage and other designs.

BowTech recently secured a $5 million line of credit to expand and beef up its production volume, Strasheim said, adding that the firm hopes to add about 30 workers to its payroll in the next 20 months.

"Our goal isn't to be the biggest," he said. "We just want to own the high end of the bow market."

Contact Joe Harwood at 338-2364 or jharwood@guardnet.com.

BOWTECH
Business: Makes, sells compound bows and other archery products

Owners: John Strasheim, Kevin Strother and several stockholders

Employees: 31

Annual sales: $3.5 million in 2001

Founded: 1999

Web site: www.BowTechArchery.com