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Outpost

Trade shows and digital marketing services

3%

Investors

5

Time to Invest

Security Offered

Convertible Note

Minimum Investment: $100

  • Year-to-date revenue as of November 2018 has surpassed $750,000, up 64% over the same period last year

  • Event sponsors have included companies such as Harley Davidson, Burton, Diageo, and Nissan

  • The Outpost community has reached over 50,000 members in 2018, up from 30,000 in 2017

  • Influencers, brand representatives, and media members attend Outpost’s trade shows

Terms

Investment Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $107,000

Valuation Cap: $7 million

Discount: 20%

Conversion Provisions: In connection with equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into shares of non-voting preferred stock (Conversion Shares) at a price based on the lower of (A) a 20% discount to the price paid per share for Preferred Stock by investors in the Qualified Equity Financing or (B) the price paid per share paid on a $7 million valuation cap. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Overview

Opportunity

Millennials, who represent the largest living generation in the U.S., are entering their peak spending years,i potentially reaching an estimated $24 trillion in wealth by 2020.ii Despite the size of the market opportunity, many legacy companies are struggling to connect with this new generation of consumers. Millennials often have different preferences for making purchases than previous generations, with an increased importance placed on companies and brands that emphasize social issues, giving back, and exploring other cultures.iii According to research conducted by Gallup, millennials are the least attached generation to brands, products, and companies.iv​​​​

Founded in 2017, Outpost Trading Company (“Outpost”) helps brands communicate their culture to young audiences by creating unique experiences and then amplifying them across media and influencer channels. The company seeks to do this through unique trade shows held several times a year where active lifestyle brands are given the opportunity to connect and interact directly with influencers, media, and young consumers. Outpost is now focusing on growing into a multi-faceted media and services company that helps partners with event design, content creation, brand reinvention, audience building, and digital design, in addition to their unique trade show experiences.

Since inception, Outpost has realized strong revenue growth, growing by 64% from $457,300 in 2017 to $751,000 in 2018 (through November). Revenue growth has been in large part due to attracting more partner brands to sponsor its events. Some of the sponsors Outpost has worked with to date include: Airstream, Burton, Chaco, Diageo, DJI, Fuji Bikes, Harley Davidson, Merrell, Nissan, SAXX, and Specialized.

Press

Product

Outpost was originally founded with the goal of disrupting the traditional trade show model for active lifestyle brands. Since then, it has expanded its product offering to include event design, content creation, brand reinvention, audience building, and digital design services.

Tradeshows

Outpost aims to disrupt the traditional marketing and trade show model by combining engaging experiences with unique product interactions at the center of the event experience. The Company’s trade shows function like weekend retreats that span a few days with attendees staying on event grounds for the duration of the trade show. Food and drinks are provided, and Outpost sets up happy hours, concerts, discussion panels, and other networking sessions for attendees. Lodging is provided by sponsors and has included Airstream campers and Tepui tents in the past.

Event attendees include influencers, brand sponsors, media members, and investors. The retreats are developed to help foster meaningful relationships between participants and enable companies to showcase their products and brand messaging. By connecting with media groups and influencers, brands aim to reach younger audiences and showcase how they personify the active lifestyle culture.

Throughout the trade shows, brand sponsors are able to setup optional events for participants to attend. Often, there are many events scheduled throughout the weekend and each participant can choose which events to attend. These events vary widely and are often curated to the industry of the brand putting on the event. Some examples of past events include: cocktail making classes, mountain biking, driving motorcycles along the California coast, drone piloting, falconry, rock climbing, and climbing redwood trees. Some brand activations like these are coupled with social good organizations. For example, Mountain Hardware climbed redwoods with Topher White of Action Rainforest. Topher showed participants how to place hacked phones in trees in the same way communities use them to monitor logging in rain forests around the world.

Outpost has hosted six trade shows to date. Previous events include:

2018 Outpost Trade Retreat at Camp Navarro

  • Over 70 brands hosted
  • 850 attendees including brand representatives, media members, influencers, and investors
  • Events included riding Harley Davidson motorcycles to the coast (pictured), flying DJI drones, mountain biking in the Redwood forest lead by Fuji Bikes, cocktail workshops lead by Bulleit, and live concerts featuring Mansionair, Bayonne, and a DJ set with Grammy-nominated Tycho

Outpost: Mammoth Mountain (2018)

  • 10 brands in attendance     
  • Attended by 142 brands representatives, media members, influencers, and buyers
  • Events included Burton hosted talk on their new snowboard bindings, swimming in natural hot springs, and drink tastings lead by Bulleit, 10Barrell Brews, and Stave & Steel

Outpost Flagship 2017 at Camp Navarro

  • Attended by 65 brands
  • Over 500 attendees including media members, influencers, and brand representatives
  • Events included exploring conservation initiatives with Mountain Hardwear while climbing redwood trees and drone workshops with DJI on California beaches

Outpost: Catskills at Outlier Inn (2017)

  • 15 brands hosted at the event
  • Attended by 188 influencers, media members, heads of brand, and buyers
  • Events included kayaking, fly-fishing, cast-iron cooking, songwriting, astrology, and more

Outpost: Joshua Tree at Talawahee (2017)

  • 31 brands hosted at the event
  • More than 200 attendees
  • Events included rock-climbing, wine-tasting, painting, and nighttime photography led by Chris Burkard

Marketing Services

Outpost has expanded on their trade “retreats” concept to offer related marketing services such as event design, content creation, brand reinvention, audience building, and digital design. These services enable Outpost to extend their existing commercial relationships with sponsors throughout the year.

  • Event Design: Outpost aims to develop unique lifestyle events for partners that bring together the brand, media, and influential individuals from various backgrounds and industries. It designs custom events with experiences at the core for partners. A previous example includes an event in Jack London park hosted for Bulleit and Niman Ranch.
  • Content Creation: Outpost offers to produce photo, video, and audio assets for partner brands with the goal of creating narratives that reinforce and extend their brand message. Examples include Harley Davidson’s “Freedom Rides” and the “Open Roads” series with Merrell and Bulleit.
  • Brand Reinvention: Outpost helps brands evaluate and adapt their brand strategies and messaging to better serve their business objectives. It aims to help them reformulate their messaging to better achieve their objectives and reach millennial audiences in effective and authentic ways.
  • Audience Building: Outpost helps partners build their audience through email marketing, social media, and other media channels.
  • Digital Design: Outpost helps brands align their digital presence with their brand and business objectives.

Some of the company’s current projects include assisting clients in developing authentic content through high-quality media and storytelling. For Harley-Davidson, Outpost filmed two female motorcycle riders as they drove Highway 1 along the Californian coast towards the 2018 Outpost Retreat. Along with footage of the actual drive, Outpost interviewed the drivers and explored their backgrounds.

Outpost is also currently working on expanding its community of influencers in multiple lifestyle and industry verticals to provide brands with social media amplification.

Use of Proceeds and Product Roadmap

Outpost anticipates using a majority of the funds raised from this raise to build out their production team, sales team, and add account management and content teams. Through hiring additional employees, Outpost anticipates being able to scale their event series, build out their online media efforts, and create new digital and broadcast programming. Outpost anticipates using the remaining funds on marketing to expand their digital community of influencers. The company has the discretion to alter the use of proceeds mentioned if market conditions adversely affect their event series.

Over the next year, Outpost aims to undertake several initiatives to continue its growth. First, the Company would like to scale its trade show series to offer more trade shows domestically next year and globally in 2020 and form new partnerships with brands. Secondly, Outpost would like to expand its digital community of influencers to extend its reach and visibility to consumers, media, brands, and influencers.

The Company would also like to continue its expansion into marketing services. Marketing services currently account for roughly 25% of annual revenue and Outpost is aiming to bring that up to 50%. This would help Outpost smooth out its cashflow and monthly revenue.

Business Model

Outpost charges no admission fee to its trade show for influencers, media members, investors, and buyers, but does charge consumers. Admission to its most recent event, the 2018 Outpost Retreat, was priced at $720 for standard admission and included:

  • All food and beverage (including alcohol)
  • Access to all attendee experiences and entertainment
  • Product demos and giveaways
  • Networking opportunities
  • Space to setup tents, or tents for rent at the event

Participants were also offered the luxury option, which included all the above features plus luxury furnished accommodation that was already setup when attendees arrived. This option was priced at $1,490.

Outpost also charges an admission fee for exhibitors (brands) that attend the event. The base-level exhibitor package was priced at $5,319 at the latest event and included:

  • Two all-inclusive badges
  • Inclusion at VIP media dinner
  • Opportunity to seed product to influencers, media, and buyers
  • Listed as an Outpost partner
  • Product/brand included in the Outpost Trading Post, an opportunity for brands to connect with event participants through displays and product demos
  • Access to limited event photography for digital use

Pricing for marketing services vary. Outpost tailors the price to the needs and requests of its clients. Larger partners get all the above and also are provided opportunities to do marketing activations, conduct panels, workshops and other custom marketing activities.  Pricing for these packages can range from $15,000 to more than $100,000. Outpost aims to sell partners at this level into more than one event as part of the package.

The Company is also developing a business model for larger consumer events. It is anticipating the first will occur on June 29th, 2019 in Los Angeles. This could expand the reach of its events, bring the Company into an urban setting, and potentially lower event costs, since hospitality and housing will not be part of the event. Under the model, Outpost would receive revenue from both event sponsors and an admission fee from consumers.

The majority of revenue is anticipated to come from larger sponsors who wish to create customer event packages. These partners will be involved in both Outpost branded events and in some cases work with Outpost to co-create custom experiential events under the partner’s own banner.

Historical Financials

Year to date through November 2018, Outpost has generated $751,000 in revenue, up 64% over the same period last year (note: Outpost started operations in February 2017). Roughly 25% of revenue in 2018 has been generated from marketing services. In 2017, the Company generated $467,000 in revenue with 93% coming from event sponsorships and the rest coming from the sale of event tickets. Large fluctuations can be seen in Outpost monthly revenue due to the majority of revenue being earned in months in which trade shows take place.

Year to date through November 2018, Outpost has incurred $911,000 in total expenses, up 64.7% over the same period in 2017. The majority of expenses in 2018 can be attributed to trade show venue expenses (26.4%), payroll expenses (26.4%), and marketing expenses (7.3%). 2018 was the first year in which Outpost did payroll. In 2017, Outpost incurred $553,000 in total expenses. The majority of expenses in 2017 can be attributed to event expenses (32.4%), staff contracting expenses (19%), and other trade show venue expenses (14.5%).

Year to date through November 2018, Outpost has incurred a net loss of $160,000, a 112% increase over the same period in 2017. However, the company was able to realize a net profit in several months throughout 2018 corresponding with successful trade show events. In 2017, Outpost incurred a net loss of $86,000 for the full year, with several months of profitability.

Industry

Industry and Market Analysis

Millennials are the largest living generationv and are about to enter their peak earning years. According to Deloitte, the net worth of the millennial generation could reach $24 trillion by 2020,vi representing a large market opportunity for businesses. Yet, with information readily accessible at their fingertips, millennials are able to constantly research and comparison shop, which means companies can no longer take “brand loyalty” for granted.vii 

According to a survey conducted by SmarterHQ, only 6.5% of millennials consider themselves brand loyalists. One of the factors that has driving away millennials is too much marketing communication without enough personalization.viii Creating a personalized connection with millennials, according to SmarterHQ’s survey, resulted in an increase in brand loyalty by 28%.ix According to Forbes, one of the most effective ways to market to millennials is through experiences.x Millennials value experiences highly,xi and when companies take their products or services and highlight them at events, they are sharing their brands with millennials in a context they enjoy.xii Companies are turning to experiential marketing to create more engagement with consumers,xiii a strategy that can lead to more profitable and loyal customers.xiv 

In a 2017 survey, the average Chief Marketing Officer attributed 24% of their total annual budget to live events that connect and educate consumers, and generate new leads. Live events were also believed to be the most effective marketing channel, according to respondents, more than digital advertising, email marketing, and content marketing. A majority of respondents (63%) also said they planned to invest more in live events in the future.xv 

Competitors

BASIC

Founded in 2010, BASIC is a branding and experience design agency. BASIC aims to provide clients with digital branding programs and interactive experiences that are customer-centric. The company offers four different services: branded eCommerce, website and digital platform design, brand strategy and identity consulting, and video production and photography. BASIC has worked with several notable companies including Beats by Dre, Nixon, Volcom, and Fender.xvi

Emerald Expositions (NYSE: EEX)

Previously known as Nielson Expositions and a subsidiary of Nielsen Holdings N.V., Emerald Expositions was purchased by Onex Partners in 2014xvii and re-branded before going public in 2017.xviii The company currently operates more than 55 trade shows, as well as other face-to-face events. In 2017, there were over 500,000 attendees at Emerald Exposition events.xix The company holds exposition events in several industries including: design and construction, jewelry, sports, and technology. One of its events, the Surf Expo Demo Day, included 20 exhibitors in 2018 and enabled buyers and media members to test out brand products on the water.xx

George P. Johnson

Founded in 1914, George P. Johnson (GPJ) is an experience marketing agency. The company helps clients generate ideas and bring them to life through digital, mobile, and physical experiences. One service GPJ offers is trade show marketing. The company develops experiential trade show marketing, exhibits, and displays for clients. The company aims to make each trade show solution experiential and provide clients with a detailed ROI analysis. Additional services offered by GPJ include content creation, data analytics, digital production, and content strategy. Previous clients of GPJ include Capcom, Cisco, Google, Nissan, and Salesforce.xxi

Huge

Founded in 1999, Huge is a digital agency that helps companies build branding through customer experiences. Huge aims to create experiences that are based on technology, data, and client corporate strategy. The company has worked with clients such as Anheuser-Busch, Google, Hulu, LG, and Zelle. Huge also provides marketing, product design, and consulting services. In 2008, Interpublic Group (NYSE: IPG), an advertising group, purchased a majority stake of Huge for an undisclosed amount.xxii​​​​

IZEA (NASDAQ: IZEA)

Founded in 2006, IZEA is technology platform that connects marketers with influencers and assists brands with content creation. The company’s primary business service, influencer marketing, aims to combine word-of-mouth advertising with online advertising. IZEA does this by integrating client messages directly into content streams of blogs, videos, and photos of influencers in their network. The company provides a technology platform for clients to accept or reject bids from influencers to market their products and brand and view marketing campaign analytics. IZEA went public in July 2018, raising $3.56 million from the offering.xxiii As of September 2018, the company had generated $13.8 million in revenue for 2018, down 21.8% from the same period in 2017.xxiv​​​​

Snowsports Industries America

Founded in 1954, Snowsports Industries America (SIA) is a non-profit, member owned trade association representing consumer snow sports suppliers. SIA conducts research on the snow sports industry and provides education and training to members. The company also hosts an annual tradeshow demo, On-Snow Demo, where snow sport brands can show off their equipment and consumers can try out the various products. The event claims to bring together snow sports and outdoor gear companies from over 100 different brands, providing them with exposure to buyers and media members. In the 2018 event, over 1,600 buyers and 100 media members attended.xxv​​​​

Team

Ken Manning

CEO

Ken joined Outpost as a non-employee advisor, where he continued to serve until being appointed CEO in September 2017. As CEO, he is responsible for the day-to-day operations of the company as well as overall strategy. Prior to joining Outpost, Ken served as the Managing Director of Patagonian Innovation Lab where he was responsible for running operations of the company. Ken has also previously worked with startups, including Razorfish, eMachines, Acer Online, betterPropoganda, Soundtracker, and WeShelter. He holds a B.A. in Philosophy/History from Marquette University, and an MBA specializing in Marketing and Technology Startup Management from Renesselaer Polytechnic Institute.

Jeff Wolfe

Co-Founder and Head of Business Development

Jeff co-founded Outpost and has held the title of Head of Business Development since. As Head of Business Development, he is responsible for sales, business development, partnerships, and customer accounts. In addition to working at Outpost, Jeff also currently serves as an advisor to Omi Project, a position he has held since April 2016, where he has helped launch their green energy project. Prior to joining Outpost and Omi Project, Jeff served as the Director of Marketing at COLLiDE Agency, where he spearheaded campaigns for brands like Hard Rock, StubHub, and Lagunitas. He also has previous experience as a music publicist and a sales and marketing rep for FILTER magazine. Jeff holds a degree in Business Marketing from Sonoma State University, 2007.

Caleb Morairty

Co-Founder and President

Caleb co-founded Outpost and has held the title of Head of Operations since. As President, he is responsible for event management, office management, and partner outreach. In addition to working at Outpost, Caleb also currently serves as an advisor to Omi Project, a position he has held since May 2015, where he has helped launch their green energy project. Prior to Outpost and Omi Project, Caleb served as the director of A&R at Harvest Records, where he was responsible for signing new artists to the label. Previous experience also includes founding Yours Truly, a small music blog that evolved into a creative agency working with brands such as Ray-Ban, Levi’s, Urban Outfitters, and MTV. Caleb has a B.S. in Biochemistry and Cell Biology from the University of California, San Diego.

Eric Bach

COO and Head of Projects

Eric has been with Outpost since inception, initially serving as CEO of the company until September 2017. He later became COO and is currently responsible for leading business operations and project management. Prior to joining Outpost, Eric co-founded a company called Hip Camp that aimed to be the Airbnb of camping. He also founded The Modern Gypsies, a project that aimed to inspire individuals to be part of social change through travel, adventure, and storytelling. Eric also previously served as a Regional Sales Manager of NIKA Water Company. He holds a B.S. in Communication and Media Studies from Florida State University.

Discussion

Endnotes

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