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Kota Longboards: The Profit Udpates in 2020

by Rolando Herrera
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Kota Longboards is a Denver-based business making high-quality longboards for the everyday consumer. Kota’s main angle depends on this broad appeal: build professional-grade longboards for common people. You shouldn’t need to be a hardcore rider, bombing steep hills and banking sick turns, to have a top-quality longboard with a great design. You might be brand new to the world of boarding, looking for a fun and original way to get around town, or just interested in developing a new skill. Whatever your skill level, Kota Longboards has a board for you. Or at least, that’s the goal. The Kota longboard is ideal for beginners – but even experienced riders can have a lot of fun with these boards.

Kota Longboards was founded in 2012. The company’s founder, Mike Maloney, put the first Kota longboards together in his garage. He named the company “Knights of the Air,” or KOTA for short. The snappy title is a reference to the nickname given to pilots by French infantrymen in World War I. These pilots were some of the most fearless in history, willing to risk their lives in what was then a new, uncertain and frankly terrifying technology – the technology of manned flight in combat. The first planes were flimsy and unreliable, and the battles were extraordinarily dangerous. These men risked their lives with every flight. Kota Longboards wanted to channel some of that fearless energy into their business. 

Being a novice businessman, Mike was having issues scaling up the company to drive more serious profits. He needed to be able to produce more boards, and hopefully, he needed to do it at lower costs. He hoped that Marcus Lemonis might be able to help the company out – so he sought out the help of The Profit to take his company from novice to supernova. 

Kota Longboards on The Profit

The Profit Season 3 Episode 16

Marcus might not have been interested in Kota at all if it weren’t for the smash-hit success and rapid expansion of the skateboard industry in recent years. The industry generates billions of dollars every year and sustains entire subcultures of amateur boarders, hip hop heads, and professional and aspiring athletes across the world. Marcus is always interested in companies geared toward the outdoors. Any product that can get people, especially younger people, outside and active is guaranteed to get Marcus’s attention. 

Right off the bat, there are differing philosophies between Mike and Marcus. Mike takes a bit of a military approach to the business, something Marcus doesn’t necessarily agree with. Mike’s insistence on staying out of the shortboard market comes across as stubbornness rather than business savvy; at least as far as Marcus is concerned.

The skateboard market, Marcus argues, is a young one. Kids have an easier time maneuvering a shortboard, rather than a longboard. Mike does not see it that way. One of the first big issues that Marcus encounters is that the boards cost too much to make. The quality is impressive, but the production cost has to come down if they’re going to succeed. Marcus has a hunch they can still produce similar quality boards which will generate more profit per unit. Mike’s stubborn insistence on staying out of the short board market, combined with Marcus’s conviction that the short board market is where they can make the most money, leads to conflict. Marcus feels that the market Mike should be targeting is young. Mike, on the other hand, thinks his target market is older. Mike insists they’ll be able to afford the cost of production.

Marcus conducts some research about the business. He finds that Mike has had some trouble retaining employees in the past. He also is amazed to learn that Josh, Mike’s partner, invested $50k of his own money into the business and works for free. Marcus sits down with Mike and his wife to go over the numbers. Despite close to a million dollars being invested, the company cannot turn a profit. Mike and his wife are eager to change that.

This is where Marcus makes his offer. He is going to provide $300k to the company. In return, Mike will give up 40% equity. Of that 40%, only 25% will go to Marcus, the rest will go to the three employees, 5% each. Mike and his wife think it over, and they agree to take the deal. Mike is reluctant to give up being in charge of the decision-making process, but he knows this move is probably for the best.

Life After The Profit

KOTA Longboards permanently closed for business on December 1, 2019. Their Instagram page declares, “If you are lucky enough to own one of our longboards, we hope you cherish and enjoy it.” 

Their decline is predictable, given the turmoil seen on The Profit, but their demise can still provide a valuable lesson in the art of compromise – the balance between vision and flexibility – to all entrepreneurs.

The company hit a rough patch after the show’s air date. All of Mike’s employees bailed on the company. (Yikes.) Seeing this mass exodus of employees, Marcus (understandably) no longer wanted to take part in the business. He rescinded his offer, and Mike flew solo for a while. Mike managed to keep things afloat for a few more months, with a new factory, a focus on direct sales, and even a glowing write up in Company Week.

However, the company went radio-silent shortly afterward, and is now officially out-of-business. 

Interestingly, upon searching KOTA Longboards and The Profit, you’ll find some articles linked to the Kota website about how Marcus Lemonis isn’t exactly who you may think he is. Some of these articles allege that the show hurts as many businesses as it helps. Whether or not that is true is up in the air. However, it does certainly suggest that Mike may not have been happy with the fallout of everything that occurred. Could the deal have been partially responsible for the employees suddenly disappearing? Perhaps one of the reasons they were on board in the first place, and willing to do so much for so little, is because they believed in Mike. Could it be that when Mike handed over his power to an outsider, they did not want to take part any longer? Who is to say? Regardless, it’s worth considering. 

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Kota Longboards, The Profit, or any of its subsidiaries.

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