Subscribe to Inc. magazine
STRATEGY

Keep Running: A Company in Search of the Finish Line

The founders of Newton Running believed they could shove their way into the running-shoe business. And so they did. Now, where the heck is that finish line?
Advertisement

Danny Abshire likes to run long distances. Very long. Like, 100 miles long, at altitude, across the rocky terrain of Colorado. Ultra running is a crazy sport, determination manifest. To finish events such as the Leadville Trail 100, which Abshire has done twice, is to progress toward a goal ceaselessly, painfully, no matter how absurd the goal might seem to less obsessed people. Running for as many as 30 hours in a row is tough on the body, naturally, leaving blisters and depleted muscles and aching everything. Ultra running affects the psyche, too. Some of the thoughts that have wobbled through Abshire's exhausted brain are personal. Should he contact his father, whom he never knew as a child? (He should, he concluded, and has.) Other thoughts are professional. It may be fair to wonder about his state of mind when he decided, as a career option, to start a running-shoe company. From scratch. With no experience manufacturing anything, and with a partner who had also never built a product of any kind, and who prior to starting the shoe company was Abshire's landlord.

For about a year and a half now, the company, Boulder, Colorado-based Newton Running, has produced and sold some of the most talked-about shoes to hit the running world in years. Newton shoes -- the charter line includes four basic models each for men and women -- are neon-colored, shockingly light, and sold with the seductive claim that they can make almost anybody a faster, injury-free runner.

The shoes aren't cheap. Not even close. At up to $175 a pair, Newton came out of the gate with very nearly the most expensive running shoes on the market. They are not for everyone, as I would learn personally. Nor is it in any way clear the shoes deliver on the miraculous promises. That doesn't temper what Newton has accomplished. Two guys -- a former ski bum and a real estate developer -- launched an international, high-end running-shoe company from the ground up. Not a company selling microbrewed beer or homemade chocolates or something small and boutiquey. Running shoes. Running shoes.

Newton shoes help runners go faster. That's the claim. That's why they're generating the buzz. The shoes are said to encourage and reward a "barefoot" running style. Runners wearing Newtons are supposed to land on the balls of their feet instead of the heels. For most people that isn't natural, but some of the fastest distance runners in history, including current American marathoner Mike Hall, who wears the Asics brand, and Olympic gold medalist Frank Shorter, who endorses New Balance, are forefoot strikers. These elite runners could go even faster in Newtons, it follows, because Newtons incorporate a set of "actuator lugs" in the forefoot, raised rubber rectangles that supposedly work like trampolines to spring runners -- forefoot strikers specifically -- forward with every step. A triathlete paid to endorse the Newton brand, Natascha Badmann, set a world record in June 2007 at a race in Maryland, wearing the company's neon-green Distance model racing flat. For his Top 10 list of the best athletic and adventure equipment of 2007, Stephen Regenold, author of a syndicated column called The Gear Junkie, ranked the Newton Gravity shoe No. 1.

Neither of the founders of Newton Running, Danny Abshire and Jerry Lee, had plans to go into the shoe business until, basically, they were told they couldn't pull it off. When I met them for the first time, last November, they were moving the Newton offices from a warehouse in Boulder to a showcase on the first floor of the landmark Colorado Building, just off the Pearl Street pedestrian mall. Unpacked boxes crowded Abshire's desk. The fluorescent yellows and oranges seen on Newton shoes colored the walls and carpeting. I spotted only two other people, sitting at desks, talking on the phone. The entire company consists of just nine people.

Abshire and Lee led me into a sitting room where the current Newton models were on display, along with a slew of the prototypes that came in the 12 years before Newton opened for business in March 2007. The most striking was the Bri-tek, an early prototype. It's a clunky blue shoe that looks almost like a cleat, held together with black adhesive and named after a man named Brian Russell.

It was Russell who started what eventually became Newton. He is a full-time inventor based in Littleton, Colorado. Thinking up new products is his calling. His brain has conjured up a wind-powered electromagnetic turbine, which he has yet to patent, and a wheel that he says will double a car's fuel efficiency. (That new wheel is patented, though it's not yet something he wants to talk about publicly.) The ideas that led to Newton came to Russell while he was running, something he has been doing for 40 years, logging 60 miles a week. All that time on the road made him think about the biomechanics of the foot. Which bones land first and why? How exactly does the ankle rotate and why? What is the optimal stride? He would run along a grassy median barefoot, monitoring how his feet struck the soft ground. He would take his bare feet over to asphalt to grasp how they responded to hard surfaces.

About 15 years ago, Russell was hawking one of his first inventions, a pillowy exercise device designed to strengthen the lower legs, at a running expo in San Francisco. He started chatting with a runner he met there. Russell had ideas for new shoes, he told her, or at least for shoe inserts. The runner hailed from Boulder and was friends with Abshire, whom she encouraged Russell to meet.

"I looked at it right away, and I knew what it was," Abshire says, recalling the first time he saw Russell's shoe prototype. "He had articulated forms in the forefoot. It seemed like a good idea."

Abshire is known widely as one of the better providers of custom orthotics, the shoe inserts that can help athletes, or even nonathletes, relieve pain caused from foot injuries and biomechanical problems. He started in orthotics as a ski bum in Aspen, fitting boots for customers, a job nobody else in the ski shop wanted. He and his wife relocated to Boulder, in 1988, to open their own orthotics shop, which continues to prosper. Even while he enjoyed success, Abshire searched for a way to expand the business. Was it time to open orthotics shops in other cities? Was orthotics his life's work?

In Russell's designs, Abshire saw an innovation. And innovation is a cornerstone of the athletic-shoe industry (as are, to be honest, bold claims and language). Running shoes are essentially simple instruments, a layering of rubber treads and foam padding below nylon uppers. To distinguish one fundamentally identical shoe from another, companies continually roll out fresh models with insoles that "breathe" or cushioning systems that can tell the difference between walking and a running stride, or at least are claimed to. Ever since Nike (NYSE:NKE) established itself 36 years ago with a revolutionary tread molded on a waffle iron, the innovation arms race has escalated. The pair of Nikes I bought most recently sends running data straight to an iPod. Newton's innovation is described on the company's website:

Action: When you forefoot-strike with a Newton running shoe, the actuator lugs stretch a membrane as they are pushed from the outer sole into the chambers of the mid-sole. This replaces the foam/air/gel used in the outer and mid-sole of traditional running shoes.

Reaction: As you begin to push off after striking, the membrane returns to its original shape, pushing the actuators out from the mid-sole and returning the energy into forward propulsion.

Abshire was so sold on Russell's designs that he persuaded the landlord of his orthotics shop, Lee, to make what was supposed to be a simple, one-time investment. The initial goal was not to start a running-shoe company but just to make a bit of money.

Lee is a prominent Boulder developer, an owner of the Colorado Building, and also a longtime runner. He first started jogging to kill time while waiting for his daughter to finish figure skating practice. The running gave him a way to organize his day. He proceeded to run 15 marathons, including Boston three times. In exchange for an ownership stake in the fledgling company -- he is now the president; Abshire is the VP -- Lee gave Abshire a check for $100,000 to cover start-up costs.

"The original idea was just to sell the technology to Nike or Adidas or somebody," says Lee. "They'd pay us a licensing fee, we'd get a quick, clean return on our money, and we'd be done with it."

Things didn't work out as planned. No one at any of the big shoe companies wanted the technology. Abshire says representatives from Adidas met with the partners for more than a year before Adidas stopped returning calls. The president of Saucony, he recalls, turned down an alliance, saying the offered technology was too complicated and expensive to mass produce.

"That could have been it," Abshire allows. "Jerry could have said, 'Danny, your time is a write-off, and Brian, your time is a write-off, and my money is a write-off, and let's just part ways.' I think it was just this sheer determination that we knew we had something, and if other people weren't willing to take it and do it right and build it, we weren't going to give it up. We just weren't that kind of people. We don't give up."

Where are the small running-shoe companies? The running-shoe business is worth about $4 billion a year in America, but it's rough on niche players. New companies rise, and established athletic-shoe companies try to find a place as well, but most of them struggle, and many of them fade away. The money flows to a shrinking handful of companies. It's been that way for 20 years. Now the people at Newton are betting that changes in manufacturing and marketing, almost all brought about by the Internet, have made it possible for a small brand to thrive.

To explain how he and Lee could contemplate building a shoe on their own, Abshire likes to talk about the carpet in his new office. If he wanted to get a custom-made welcome mat with the red-and-yellow Newton logo woven into the fibers, all he would have to do is e-mail an image of the logo to a factory in North Carolina. A carpet could be sewn, shipped to Boulder, and installed by the front door of the Newton offices in as little as three days.

"Could you do that 10 years ago?" Abshire asks. "Could you do that even five years ago? Three years ago?"

After making a few calls and poking around the Internet, Abshire found a consultant in Portland, Oregon, who used to work for Adidas, and who was able to link up Abshire, Russell, and Lee with freelance shoe designers. The first design realized, the Bri-tek, was blue and clunky, with an exaggerated heel and forefoot and only blank space beneath the wearer's arch. The trio put up a website, featuring a link where people could order the shoe. That website can still be found online. There's the blue shoe spinning and an endorsement from Paula Newby-Fraser, a triathlete. There's discussion of the technology, of energy returns and motion. But Bri-tek had no marketing to speak of, and so few people showed interest in the product that the shoe died stillborn. Anyone who placed an advance order received a refund.

"I had to ask myself, Do I stop now, or do I go a little further in?" Lee recalls. "That decision was probably made about 24 times in the past 12 years. It was always a business decision, but emotion started getting into it. I was looking at the technology and saying, 'This is good; this works. Why are we the only ones that can see it?' "

Lee and Abshire decided to continue, but only after jettisoning Russell. They bought out the inventor and killed the Bri-tek name. Russell kept his patents, and he anticipated licensing fees when the new shoes, whatever they were called, went into production. But Lee eventually persuaded Russell to sell the patents, too, claiming it was the only way the company could go forward profitably. In exchange for his patents, Russell was given a five-year consultant's contract, and his name remains on the Who We Are page of the Newton website.

"In a sense I was squeezed out," Russell told me when I visited him at his home. "It's not quite as friendly as it sounds."

After dropping Russell, Abshire completely redesigned the shoes, by himself. The five rubber lugs in the forefoot, one for each metatarsal, were pared down to four. A springy disk in the heel was sliced off and replaced by narrow, flat foam that made the heel look like the heel on most running shoes -- a cosmetic choice. Abshire managed to further liposuction 7 ounces from the Gravity model trainers, leaving each shoe at around 10 ounces, very light. Once the prototypes were refined and the blueprints digitized, the consultant in Portland hooked up Abshire and Lee with a factory in China where the shoes could be built.

The Newton name came from TDA, a local branding shop that has worked with the Denver Nuggets basketball team and Celestial Seasonings, the tea company also based in Boulder. The first prototypes Abshire and Lee brought around still had thick layers of glue, recalls Thomas Dooley, TDA's founder and co-creative director.

"I must have gone through a thousand names until I came to Newton," Dooley says. "We wanted something simple and basic, a fundamental law of physics that's easily understandable: For every action, there is an equal and opposite reaction."

The name implies motion, which resonates with runners. It also implies science, people in lab coats testing and retesting. Dooley's shop unified the branding, designing not only the website but also the company logo and the shoe boxes and even helping style the shoes themselves. Everything looks professional. It's hard to believe Newton is basically a mom-and-pop start-up with only a handful of employees.

"That was something we very much did on purpose," Lee tells me. "We realized we only have one chance to make a first impression. We wanted to look like we were serious players from the very beginning."

The marketing of the shoes is effective, as I can attest. Whether the shoes are as good as advertised is a tricky question.

I discovered Newton organically. I had been training for my first marathon and had cycled through half a dozen pairs of shoes without finding a model I liked. The Newton Stability racer, which I found while surfing a running chat room, appeared to be unbelievably light yet still suitable for my vulnerable knees. Bingo! Clicking onto the Newton website -- at the time the only place outside of Boulder where the shoes could be purchased -- I saw that all Newtons come with "patented Newton Active Membrane Technology," which gives "propulsion properties." I have no problems with a technological assist. I do indeed want to be pushed forward. I want to run faster. That's the whole point.

Without the Internet, there probably wouldn't be a Newton story. When Phil Knight, the founder of Nike, first tried to push his shoes into the marketplace, he had to drive from running store to running store with boxes of prototypes stockpiled in the trunk of his car. Thanks to the Internet, runners were able to find Newtons on their own. The reviews from the first adopters, posted on blogs and in running chat rooms, prompted the second wave of sales, which I fell into.

Only after I bought my Newtons did I notice the many negative (or at least skeptical) online posts about the shoes. A lot of the skepticism and disapproval has to do with Newton's commitment to forefoot running. If you don't land on your forefoot, Newton says, you should. (Heel strikers apply the brakes with every step, is the thinking.) But look around -- most runners land on their heels. I certainly do. More than a few posters in chat rooms warned that trying to change a natural running style could lead to serious injury. Plus, if one has to "break into" a pair of Newtons, as the company advises, what would happen if the company stopped making the shoes? Do Newtons foster a very expensive dependence? The language on the Newton website is inclusive. Just pulling on a pair of Newtons will "promote a change in running form," the website states. "Right away you won't feel the need to land on your heel." They seemed to be for everybody. Yet, in further Web surfing, I came across a YouTube video in which Abshire says the shoes are specifically not for people with my running style: "No heel striking with Newtons, please."

Changing a natural running style is possible, I know. Mark Rouse, who was the first retailer to sell Newtons out of a store, Runner's High 'n Tri in Arlington Heights, Illinois, switched to the brand and to a forefoot running style after 30 years of marathons left his legs feeling worn out. "I got rid of my aches and pains," he says of the switch, which he approached slowly. "I feel like I'm starting my running career over again." I've flipped through books on "Chi Running," which advocates a midfoot strike, and on "the Pose Method," which pushes forefoot striking. Changing a running style is hard, though, and the merits of any change are debatable; though a chronically injured runner might benefit from a style switch, a healthy runner could wind up with a brand-new chronic injury.

For a full week, I wore my new shoes only around my apartment, afraid to take them outside and burn my chances of returning them. I noticed for the first time that the soles were marked, which indicated someone had likely already returned them after a treadmill run or a few laps on an indoor track. (Even later, pulling out the insole, I found strips of duct tape hand-applied to the bottom surface.) At my regular Wednesday-morning group run, one member showed up in Newtons, to much mocking. "The injury shoes!" taunted a friend of mine. The injury shoes? I didn't say a word about my own new pair.

I still wanted to wear them. They are as light and as comfortable as slippers. They look cool. I know people who rave about them. Also, and significantly to my mind, one runner posting online claimed not to notice much difference between his Newtons and other shoes. That reassured me enough to finally try them out. I wore them on three light runs in a row, without incident. I did not suddenly become a forefoot striker. The Newtons did not make running any easier, as far as I could tell, but they didn't seem to cause damage, either. After each run, I monitored my knees for the rest of the day. Is that pain I feel? Am I injured? How about now? Am I in pain now? I never was.

Abshire, speaking at the Newton headquarters, told me his shoes can shave up to half an hour off a marathon time. That's attractive to me -- extremely attractive -- as I aspire to someday qualify for the Boston Marathon, and a 30-minute reduction in my time would get me there, easily. Yet that 30-minute-improvement claim is hard to swallow. I noticed that the Gadget Guy columnist who ranked the Newtons No. 1 in his gear-of-the-year column said the shoes kept him "feeling faster" in the Twin Cities Marathon. And then I saw that his finishing time of four hours and 36 minutes was 46 minutes slower than his time in the same race two years earlier. And Natascha Badmann, the triathlete who was wearing Newtons when she set a world record? I have looked at photos and video clips of her. In every instance I have seen, she is a pronounced heel striker, just like me. It doesn't appear that Newton's patented forefoot propulsion technology is what got her across the finish line in record time. Badmann admitted as much when I spoke to her via telephone in her native Switzerland. "They are incredibly light; for people like you and me who are heel strikers, they still are very comfortable," she said. "I ran an entire Ironman without blisters, which is a great thing. Before, I had eight toenails fall out."

When Brian Russell invented what would evolve into Newtons, he installed his mini-trampoline gizmos in both the heel and the forefoot, to spring the runner ahead whatever the footstrike. (One of his patents notes that the shoe, as originally conceived, "provides unique control over and guidance of the energy of the wearer's foot as it travels through the three successive basic phases of heel strike, mid stance and toe off.") There's no evidence those heel springy things were removed for anything but cosmetic and production reasons. So the forefoot-striking story line, the key to Newton's marketing, sure seems as if it was pumped up after the fact.

Abshire, Lee, and even Russell -- all forefoot strikers, by the way -- tell me the Newtons were indeed designed from the get-go for forefoot running. Disagreeing seems like splitting hairs. More to the point, forefoot running gave Newton a niche, a story, and that's probably what it takes to compete. Good for them. These guys put out a new running shoe, from scratch, all on their own. When Adidas and Saucony and the others told them to get lost, they decided to make and then market the shoes themselves. Like the long-distance runners they are, they just keep pushing forward. I wish them success. That said, I also wish I had my $175 back.

Other people feel differently. Mark Rouse, the retailer in Illinois, says customers are coming back to his shop for their second and third pairs. "Probably for every 20 pairs we sell, there's one or two people for whom it doesn't work out," Rouse says. Abshire says Newton is working on a transitional shoe, a model that will help runners switch from heel striking to forefoot striking. He and Lee are also working on a casual shoe, a sort of sneaker. Trail shoes are in the works. They are even looking into basketball and a line of branded Newton clothing.

Abshire and Lee claim to have sold 20,000 to 30,000 pairs of shoes online in 2007 and to have surpassed that figure in May 2008. They have accelerated their plans to place the shoes in specialty running stores, which is crucial to building the brand among serious runners. By midyear, Newtons were in 58 stores domestically, plus four overseas. By the end of 2008, Lee says, Newtons will be available in about 100 stores domestically and 20 outside the U.S. Even with this, Lee says the company should be profitable by 2009, and would have been profitable this year if it hadn't invested heavily in the research and development of new shoe models and in a more efficient manufacturing process.

That R&D seems key. If innovation is a cornerstone of the running-shoe market, so is competition. Several boutique running-shoe lines have sprung up recently, their manufacturers enjoying the same advances that birthed Newton. There's Spira, out of El Paso, guerrilla marketing a gimmicky shoe with springs in the heel and forefoot. LOCO, out of New Hampshire, is trying to carve out a niche with a promise not to innovate, or change its shoe designs, for at least five years. Zoot Sports, a 25-year-old company specializing in triathletes, launched its first shoe line in March. The Zoot men's Ultra Racer features "BareFit" technology for sockless wear, "Tri-Dry" technology to limit water retention, and "CarbonSpan+" for "smooth and powerful toe off."

Running shoes are a personal matter. Runners who have found a style and a brand they like often stockpile up to a dozen pairs of that shoe and stay loyal until the company stops making it. And, despite my personal misgivings about the Newton line, the shoes no doubt are ideal for some runners. The company will sink or float on how big that pool of customers is.

Abshire and Lee tell me that's fine. They say consistently that they don't want to be the biggest name in the business. They're not out to take down Nike, they say, nor are they trying to flip Newton. They're trying to build a brand. A small, niche, boutique brand, which they believe their industry can now accommodate. They want to build Newton the way Lee builds his real estate portfolio, over the long haul. When they talk about their vision for Newton, I think of Abshire in the Leadville 100, grinding out the miles.

Robert Andrew Powell is writing a book about his attempt to qualify for the Boston Marathon.

Last updated: Aug 1, 2008




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: