Industry Watch

The Daring Donkey Gambit

As Spye becomes an umbrella for its founder’s many ideas, Donkey Label emerges as a viable apparel brand

By Erica Rivera
Monday, June 1, 2015

"Starting a business is really sexy and fun,” says Paul Krumrich, a manufacturing entrepreneur who has tried his hand at everything from digital signage to solar panels.

SpyeWorks is the division of the company that focuses on hardware, software and digital signage.

The distribution division is known as SpyeGlass, and specializes in 3M Vikuiti and MACtac GlassMovie projection products, which are brands of reflective film that can be placed on any window and onto which images can be projected.

In 2014, Krumrich opened up Spye’s headquarters to expand into solar panel manufacturing as the Minnesota branch of the Itek Energy brand.

Unity in Diversity

Krumrich attributes his ability to oversee all these diverse ventures to his 12-person Spye team. In the past, he kept the various endeavors separate, but side projects were seen as a distraction, and the feedback he received was that they were not a good use of time. “The best thing I’ve done recently is I’ve brought them in under Spye so everyone can share in the success and also help in the workload,” he says.

“The mothership Spye is a service and integration consulting business that pulls everything together to create environment and digital solutions for companies and consumers,” Krumrich explains.

Looking toward the future, Krumrich would like Spye to emulate Apple’s integrated life approach, with one central control system for people’s homes and commercial buildings. Whether it’s wind or solar or geo-thermal, Krumrich would like Spye to be the source for design, installation and maintenance of such systems.

We’re a pretty creative bunch,” he says, and that gives Spye an edge. “Most of our competitors are either design agencies that don’t have a clue about technology or technology companies that don’t have a clue about design. Our clients love us because they can just hire one person and get both.”

Donkey Label — A Pet Project

Krumrich embarked on yet another manufacturing endeavor in 2010: Donkey Label, a line of bicycle apparel and accessories. This business was something of a happy accident. Krumrich, who includes cycling and racing bikes among his hobbies, had no previous experience with apparel.

“It was completely crazy,” he says. “I probably shouldn’t have done it. Once I got into it, it was a slippery slope. You make one decision, then the next one, and the next thing you know, you’re so far in, the only way out is to keep going.”

Krumrich says it was a “social experiment” to see if consumers who claim to value local businesses would actually buy local when the goods were more expensive.

Offshore or Domestic?

Like any manufacturer, Krumrich weighed the costs and benefits of keeping operations local. “It’s hard to do, because everyone is so price-conscious,” he says. “I’ve done a couple things overseas, and you get really sucked in by the low cost — it’s a fifth of what it costs here. You have to buy a ton to get that price. If you get them and they’re slightly wrong, you can’t send them back. Then they’ll give you a discount but you have to keep them — and it’s taken three months to get them so you’ve missed a deadline — so do you sell them and your brand takes a hit?”

Krumrich took the stance that he wasn’t going to approach Donkey Label’s products like he would in other industries, which is to look at the competition, the costs, and the market, then make a product between a certain price point to sell the most. “I just said, ‘I’m going to make a jersey that I want to wear, that I love, and I’m going to mark it up based on what it costs me to make it.’ If no one buys it, then I’ll have a lot of jerseys that I love. And if they buy it, then they do. But I’m not going to make a product to fit a market or a price point.”

Luckily for Krumrich, there’s a market for high-end bicycle jerseys, and Clothier Design Source in South St. Paul was able to manufacture them. “He thinks big. He isn’t risk-averse. He’s got perseverance,” says Mindy Martell, President of Clothier Design Source.

A major advantage of manufacturing close to home includes knowing the people who are doing the work. Krumrich can drive over and talk to the staff at Clothier whenever he wants. “Especially as I was learning all this stuff, that was essential,” he says.

“In the beginning, he thought it was going to be easy,” says Martell. “Once you get in the industry, there’s a certain language and terminology that he had no clue about in the beginning, but now he’s up to speed.”

Donkey Does It

Donkey Label products are now available in a few stores locally as well as across the United States, the U.K. and Australia. While sales aren’t high enough “to bet the farm on,” the integrity of the project is invaluable. Krumrich feels rewarded when he gets emails from satisfied customers. “People are willing to pay to get some value, and part of that value is feeling good about who they’re supporting and the other part of it is the product.”