Hobbico Sale of Estes

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Vern Estes on your Advisory Board— cool as... can’t think of anything witty. It’s just pretty darn cool. Looking forward to good things coming out of Penrose. Hopefully JumpJet gets to run wild.

I agree! I hope he gets some help... If they're hiring, I'd consider returning to the US.
 
Estes was not happy to find out AT was selling the Estes branded motors direct and told them to take a hike. Those kits were always good sellers.

I would be interested to see your source on that as that is completely false. Ask me how I know.
 
Good guess but incorrect. We have a great working relationship with Estes and have had one for many years. Sure, we are now directly competing in the 18mm LPR market but the majority of RCS targets a different market segment.

And, I guess, AT returned the favor by expanding its own menu of 29mm MMT rocket kits, and then went out and bought Quest.
Fast forward to now, and AT is now competing with Estes in A-D 18mm motors space under "Q-Jets" brand:
https://modelrocketbuilding.blogspot.com/2017/02/quest-q-jets-engines-introduced-at.html


Not a lot of love lost between those two companies...
 
I know the Q-Jets are coming "real soon now" but I haven't seen any where I can buy one yet. :)

A snd B Q-Jets begin shipping next week. C and D Q-Jets were sent to cert today to TRA and we expect to have those shipping within 2 weeks of certification.
 
I would be interested to see your source on that as that is completely false. Ask me how I know.

Good guess but incorrect. We have a great working relationship with Estes and have had one for many years. Sure, we are now directly competing in the 18mm LPR market but the majority of RCS targets a different market segment.

THANK YOU !!!
 
This is correct.

Certainly Aerotech continued to sell the original AT-labeled versions of the same motors that were rebranded Estes (e.g., G40, E30, F50). I'd have thought that was part of the original agreement.

I bought my share of Estes-branded AT motors from local vendors, but Estes made some major missteps with that IMHO (high prices, no igniters.)
 
A snd B Q-Jets begin shipping next week. C and D Q-Jets were sent to cert today to TRA and we expect to have those shipping within 2 weeks of certification.

Please keep us updated on the progress of those Cs and Ds. I have a cluster rocket that will be eating gobs of them. Can you give official word on the target impulses of those two respectively? Total, Avg and Peak numbers? Thanks!
 
My question about Horizon is simply that - as the last big hobby distributor standing - whether or not they will distribute Estes (or Aerotech/Quest) products to hobby shops that get their stock from Horizon (which includes all those around here) or whether there will no longer be rocketry products available at those stores. Three I can think of have pretty substantial rocketry sections now.

When Hobbico/Great Planes acquired Estes, Horizon stopped buying all rocket products.

One of Tunick's last moves after he sold the company but before his 90 day 'handover' contract expired with Hobbico was to get a huge last sale from Horizon.

That way he got a cut of the sale and he could spite Hobbico which he hated.
 
Interesting (and chilling) historical tidbit. But what will happen now? I certainly hope there will be some path to maintaining and even (maybe) growing those rocketry sections in local shops. Heck, I’d love to see Q-Jets and even Aerotech Hobbyline motors/reloads as well as kits other than Estes ones there as well. Custom, perhaps? Or even Semroc?

One can always hope....
 
Interesting (and chilling) historical tidbit. But what will happen now? I certainly hope there will be some path to maintaining and even (maybe) growing those rocketry sections in local shops. Heck, I’d love to see Q-Jets and even Aerotech Hobbyline motors/reloads as well as kits other than Estes ones there as well. Custom, perhaps? Or even Semroc?

One can always hope....

Several regional/medium size hobby distributors carry Estes.

I, too, hope that Horizon will pick up Estes along with AeroTech again and maybe Quest.
 
Several regional/medium size hobby distributors carry Estes.

Bob,

Other than Horizon, how many of these smaller hobby distributors remain in the US? How does that number compare to, say, twenty years ago? Are their days numbered?

Just curious,
James
 
I would be interested to see your source on that as that is completely false. Ask me how I know.

Welcome to the Hobby Charles.
It's always good to have new people in the hobby.
As to your question, it was my distributor that didn't know what an Aerotech was.
But that his supplier, Estes, told him this place called Aerotech was selling to their distributors directly.
Oh, and sorry for the confusion, I did not know Gloria was logged in.
I made the truthful statements.
 
Welcome to the Hobby Charles.
It's always good to have new people in the hobby.
As to your question, it was my distributor that didn't know what an Aerotech was.
But that his supplier, Estes, told him this place called Aerotech was selling to their distributors directly.
Oh, and sorry for the confusion, I did not know Gloria was logged in.
I made the truthful statements.
Robert, I had an Estes distributor tell me aerotech had discontinued the hobby product line...they don't have a clue about what is really going on.
 
Are all these people gonna do is Henk about what he said she said? Just go fly rockets. Or buy motors. Or build rockets. I bought an Estes Conquest specifically to try the RMS24-60.
 
AHEM,

Back to news about the buyers of Estes:

From the Pueblo Chieftain (newspaper in Pueblo, CO)

LINK to FULL article: https://tinyurl.com/yccpzcaa

Hobby turns serious for Estes’ buyer

PENROSE -- Estes Industries, the largest model rocket builder in the world, hopes to soar to new heights after the 60-year-old Penrose company recently was purchased by a family with a rich history in reaching for the stars.

The Langford family, based in Virginia, purchased Estes Industries following the bankruptcy of previous owner Hobbico.

Company president Ellis Langford said his love of model rocketry came during childhood from his father John Langford.

The elder Langford is an aerospace engineer and founder of Aurora Flight Sciences, a Virginia-based company that makes drones for the U.S. Air Force.

During college, the elder Langford was an avid model rocket enthusiast and chose to attend MIT for his doctoral studies because of its model rocket society.

"I was 3 years old when I started flying model rockets with my father. I am sure it was an Estes engine in that first rocket," the 33-year-old Ellis Langford said.

Ellis Langford will move to the area to oversee the day-to-day operations of the company on behalf of the family's leadership team, which includes his brother Fritz Langford.

John Langford will sit on the company's advisory board.

Estes founder Vern Estes, who started the company in 1958, also will serve on the board.

"Estes' goal is to be around for 60 more years and build model rockets for the next generation of customers. The company has an amazing crew of people here who have kept it going through a variety of hardships," Ellis Langford said.

The company employs 30 workers and plans to hire additional sales and staff members in the near future.

"We want this business to be sustainable for the long haul. So many people -- millions across the country -- fly our stuff," Ellis Langford said.

[more at: [B][U]https://tinyurl.com/yccpzcaa[/U][/B] ]

29h1Vgp.jpg
 
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Bob,

Other than Horizon, how many of these smaller hobby distributors remain in the US? How does that number compare to, say, twenty years ago? Are their days numbered?

Just curious,
James

The number of distributors has dropped quite a bit since my time at AeroTech.

The number of hobby shops has fallen from over 4,000 in 1989 to barely over 1,000 now.

Those who think 'direct/internet' sales would be the answer for Estes don't understand how the hobby industry works.

Hobby distributors play a vital function for hobby manufacturers.
Distributors handle all the individual hobby shop orders, billing, shipping, etc.
If Estes has to fill each and every hobby shop order that will require more staff, expense and resources.

It was tough enough dealing with 20-30 hobby distributors during my time at AeroTech.
Having to deal with hundreds of individual hobby shops would require a lot of effort by Estes.
 
It was tough enough dealing with 20-30 hobby distributors during my time at AeroTech.
Having to deal with hundreds of individual hobby shops would require a lot of effort by Estes.

Interestingly enough, in the early 1970's, I noticed that at my local hobby shop, there has a VERY interesting label on the handset of their phone. It was a label with Estes Industries' phone number and logo on it. It MAY have been a neck cradle that was attached to the handset.

Just blew me away at the time that among all the OTHER hobby companies that might have THEIR Phone
number label on that hobby shop's phone, that it was Estes' number.

Not attempting to claim that direct sales to hobby shops is very practical now, but at one point in time that seems to be a main way that Estes did it.

And now, this photo from the NAR's Electronic Rocketeer newsletter. Vern & Gleda, and John & Ellis.

pBopZso.jpg
 
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Catching up on some past threads I wish I would have participated in, such as this one.

Interesting fact: when I started Jolly Logic, I assumed I would be private labeling products for companies like Estes that had established distribution. "Reaching the customer" and "product awareness" are two classic business problems that I've worked on throughout my professional life as a marketing and tech exec, and so I thought making products for Estes would be a wise move.

Some basic facts prevented this from happening:
  1. For the vast majority of people model rocketry is casual and occasional (someone might build and launch a rocket once or twice, perhaps as a part of a school or scouting event, and never launch again that year, or perhaps ever)
  2. The vast majority of Estes sales have come through retail stores, which cater to casual or impulse buyers looking for gifts
  3. Retail distribution is expensive (to wit: the success of Amazon, with its dramatically lower costs and highly sophisticated software systems)
These facts lead to the following results:
  1. To appeal to casual purchasers, rocket kits need to be low priced
  2. High distribution costs leave very few dollars for material and labor
The need to make costs as low possible drives a company like Estes to pursue the cheapest labor available and to also keep the kits as cheaply built as possible.

So you can imagine how the early conversations went between Estes and Jolly Logic. I started the company to make products that worked the way I would like products to work. That includes:
  • Be as easy to use as possible
  • Be totally self-contained and rugged
  • Not require weird batteries
  • Have great tech specs
  • Be financially sustainable
The conversations with Estes and Quest were short. Their requirements were simple: they already knew the price the products should sell for ($19.95), and what they would pay me for them: ($4.95). They knew this with startling (to me) certainty, without even knowing exactly what the product would do or look like.

Think about that for a second. They in effect were saying, "What the product is like, or what it does, is not what we care about. What we care about is what it costs. We start from there." The principals involved in those conversations can feel free to jump in and give their characterizations, but I think I'm capturing them fairly. These conversations continued annually for the first couple/few years of Jolly Logic's existence back in 2009-2012.

That's a very disappointing situation for someone like me who loves products and has very fond memories for the model rocketry of my youth. But because I was rather inflexible about my product design philosophy—it is the motivation behind the company—we ended up with a conflict we could not resolve.

So Estes and Jolly Logic would not work together, and Estes would eventually take my first product (the original AltimeterOne), send it to China, and ask them to copy it as best they could. The result closely mimicked the user interface, packaging, and the electronics to a large degree. Unfortunately, software is not China's strong suit, and much of the reliability of AltimeterOne is due to its software.

After that very first product, the software in my products escalated in sophistication enough to make further copying much harder to do. AltimeterTwo, which I think doesn't get enough credit for being so self-contained and dedicated to rocketry statistics, has approximately 100x the software sophistication of AltimeterOne. And AltimeterThree, with its modes and mobile phone apps, stretches that to 10,000x. While not technically impossible, it is practically impossible to ask China to copy AltimeterThree.

If I had to sum it up, I'd say Estes has been beset by two huge global business shifts:
  • The rise of software as the primary source of value in every industry (logistics, medicine, farming, real rockets, cars, communications)
  • The rise of more efficient means of distribution (Amazon)
So Estes is left making relatively uninspiring products with little/no software content in a world where people pay good money for everyday objects to be "smart," and rockets to "think in the air" and land themselves. And without innovation they are shackled to the failing economics of retail hobby stores that force them to make very cheaply-constructed products and to use price as the primary attraction to their products. Products come in economically-large containers from China via slow boat, there is frequent supply lumpiness (too much or too little product at once), and it takes a long time to innovate and put new products in the channel. Designing a new product is fairly simple compared to getting it manufactured overseas and accepted into the old-fashioned systems of distributors and retailers, whereas it takes approximately 30 minutes to add a new product into online systems for sale over the Internet.

I tried to work with them, I really did. But they were wedded to their ways, and I to mine.

Sigh.
 
John B., in all fairness, you're talking about the previous ownership, right? We don't really know what the new owners' business model will be.
 
John B., in all fairness, you're talking about the previous ownership, right? We don't really know what the new owners' business model will be.

The business realities do not change with ownership.
Estes distribution model and target customer bases are well defined, fixed, and its primary (retail) distribution channel is shrinking. So is its revenue.

I've seen no signs of "new" Estes evolving in any meaningful way (not counting recycling old catalog), yet.
I wish them well, as the hobby definitely needs a "safe" and widely accessible entry-level brand.

a

P.S.: John B - thanks for sharing a very insightful story
 
A major part of the problem is the hobby itself. It requires a desire, some artisanship, money, and a place to launch. Take away any one of the four, and you can't do it. Well, I guess you could take away the artisanship of you only fly RTF.

The other problem is that only a certain kind of person is attracted to it. A friend one time said at a launch that his wife always asks if he took pictures, and he said, "Why? It's always the same. They go up, they come down." Whereas some of us really like the going up and coming down, some people think it is really stupid.
 
A major part of the problem is the hobby itself. It requires a desire, some artisanship, money, and a place to launch. Take away any one of the four, and you can't do it. Well, I guess you could take away the artisanship of you only fly RTF.

The other problem is that only a certain kind of person is attracted to it. A friend one time said at a launch that his wife always asks if he took pictures, and he said, "Why? It's always the same. They go up, they come down." Whereas some of us really like the going up and coming down, some people think it is really stupid.

Ugh, and to compound the problems, kids, young adults, and those who might be interested in the hobby, rarely have the patience for the craftsmanship required. They are all used to punching buttons and getting their quick rewards. Not many people want to do research, invest some money, take the time to build and finish something and then finally after all of that work, only be entertained for "60 seconds". Its sad. They're so ready to get to the destination that they've forgotten how to enjoy the journey.
 
Catching up on some past threads I wish I would have participated in, such as this one.

Interesting fact: when I started Jolly Logic, I assumed I would be private labeling products for companies like Estes that had established distribution. "Reaching the customer" and "product awareness" are two classic business problems that I've worked on throughout my professional life as a marketing and tech exec, and so I thought making products for Estes would be a wise move.

Some basic facts prevented this from happening:
  1. For the vast majority of people model rocketry is casual and occasional (someone might build and launch a rocket once or twice, perhaps as a part of a school or scouting event, and never launch again that year, or perhaps ever)
  2. The vast majority of Estes sales have come through retail stores, which cater to casual or impulse buyers looking for gifts
  3. Retail distribution is expensive (to wit: the success of Amazon, with its dramatically lower costs and highly sophisticated software systems)
These facts lead to the following results:
  1. To appeal to casual purchasers, rocket kits need to be low priced
  2. High distribution costs leave very few dollars for material and labor
The need to make costs as low possible drives a company like Estes to pursue the cheapest labor available and to also keep the kits as cheaply built as possible.

So you can imagine how the early conversations went between Estes and Jolly Logic. I started the company to make products that worked the way I would like products to work. That includes:
  • Be as easy to use as possible
  • Be totally self-contained and rugged
  • Not require weird batteries
  • Have great tech specs
  • Be financially sustainable
The conversations with Estes and Quest were short. Their requirements were simple: they already knew the price the products should sell for ($19.95), and what they would pay me for them: ($4.95). They knew this with startling (to me) certainty, without even knowing exactly what the product would do or look like.

Think about that for a second. They in effect were saying, "What the product is like, or what it does, is not what we care about. What we care about is what it costs. We start from there." The principals involved in those conversations can feel free to jump in and give their characterizations, but I think I'm capturing them fairly. These conversations continued annually for the first couple/few years of Jolly Logic's existence back in 2009-2012.

That's a very disappointing situation for someone like me who loves products and has very fond memories for the model rocketry of my youth. But because I was rather inflexible about my product design philosophy—it is the motivation behind the company—we ended up with a conflict we could not resolve.

So Estes and Jolly Logic would not work together, and Estes would eventually take my first product (the original AltimeterOne), send it to China, and ask them to copy it as best they could. The result closely mimicked the user interface, packaging, and the electronics to a large degree. Unfortunately, software is not China's strong suit, and much of the reliability of AltimeterOne is due to its software.

After that very first product, the software in my products escalated in sophistication enough to make further copying much harder to do. AltimeterTwo, which I think doesn't get enough credit for being so self-contained and dedicated to rocketry statistics, has approximately 100x the software sophistication of AltimeterOne. And AltimeterThree, with its modes and mobile phone apps, stretches that to 10,000x. While not technically impossible, it is practically impossible to ask China to copy AltimeterThree.

If I had to sum it up, I'd say Estes has been beset by two huge global business shifts:
  • The rise of software as the primary source of value in every industry (logistics, medicine, farming, real rockets, cars, communications)
  • The rise of more efficient means of distribution (Amazon)
So Estes is left making relatively uninspiring products with little/no software content in a world where people pay good money for everyday objects to be "smart," and rockets to "think in the air" and land themselves. And without innovation they are shackled to the failing economics of retail hobby stores that force them to make very cheaply-constructed products and to use price as the primary attraction to their products. Products come in economically-large containers from China via slow boat, there is frequent supply lumpiness (too much or too little product at once), and it takes a long time to innovate and put new products in the channel. Designing a new product is fairly simple compared to getting it manufactured overseas and accepted into the old-fashioned systems of distributors and retailers, whereas it takes approximately 30 minutes to add a new product into online systems for sale over the Internet.

I tried to work with them, I really did. But they were wedded to their ways, and I to mine.

Sigh.

Fascinating peek behind the curtain. I do hope the principals involved will feel free to add their characterization of these discussions. Maybe at some future national event. Sharing an adult beverage and some salty snacks after a long and satisfying day on the range.
 
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