The Colgate Scene
March 2008

Fast company

Start your engines (er, charge your batteries).

Entrepreneurs Blake Harper '96 and David Domm '97 have taken the on-ramp to the reality retail fast lane, and they are ready for your test drive.

Raceline Motorworks, their store where boys (and girls) of all ages design, build, and race their own radio-controlled (RC) cars or trucks, is a manufacturer, store chain, and entertainment company all in one. The concept capitalizes on what Harper, Domm, and their business partner Rocky Jones recognized were two major opportunities.

First was the emergence of "lifestyle retail" as done by the likes of Nike, Apple, and, more specifically in the toy market, American Girl and Build-A-Bear — the idea that shopping has become an interactive experience, much more than just buying things off the shelf.

"People like to touch and experience a product before they buy it," said Domm. As well, he noted, "lifestyle centers are replacing the antiquated regional shopping center." Many malls and shopping venues now serve as entertainment complexes, with stadium-style movie theaters, trendy restaurants, and play areas where people spend large chunks of time.

Second, with the enormous success of stores like American Girl and Club Libby Lu, which cater to girls, they found a huge untapped market — boys. RC cars were a no-brainer. As Harper put it, "Especially for boys, there's a powerful draw to things that go and things that roll. Of course, girls are welcome, too."


How it works
The Raceline Motorworks stores (the first opened in Westfield Hawthorn mall in Vernon Hills, Ill., in August 2006, the second in Mayfair mall in Milwaukee, Wis., in July 2007) are set up with distinct functional areas that lead customers through each step. You start in the sample selection area showcasing a colorful array of options, with vehicle lines at a variety of price points — from simple toy cars to high-end, sophisticated models with full shocks and 4-wheel drive that can go 18 to 20 m.p.h. Each line has 10 body styles, plus tires, wheels, and decals. Selection cards help keep track of choices (and later can serve as trading cards).

Next you visit a DMV station, to obtain your driver's license. No eye or road test required, and unlike the real DMV, you can take your picture over and over until you like it. Here, you're generating your membership card, and entering your selections into a computer to place your order.

After cashing out at the register, it's on to the build area, with its workstations, tools, and service personnel available to help if kids and their parents get stuck during the assembly process.

Now the rubber hits the track, with both road and four-wheeling courses. A Raceline Pit Crew (staff) manage the races, driver's ed, and Pit Road service garage.

When you take home your car, it comes with a nifty "garage" storage box. Should you wish to soup up your vehicle, you can return to swap out or upgrade parts. While their customers are mostly boys age 5 to 12, girls love the place, too — last year, they sold out of pink bodies.

Raceline car owners essentially become members of a club; there's even an expanding racing league.

"That gives them a reason to come back, a connection with the car that they've built," said Harper. "The experience really comes to life."

On a Tuesday morning during winter vacation, by 10:30 a.m. nearly 20 elementary school—aged children have already gathered at the track rail, wielding their radio controls. A Pit Crew member stands ready in the center of the track to set things right when vehicle crashes lead to a "Caution" — a frequent occurrence. Kids are twisting and jumping and shouting out as their cars careen around the course, parents looking on from behind. Domm and Harper are mingling around the shop, stopping to admire a car or answer a parent's question, all the time grinning from ear to ear. It's a happy chaos.


And they're off
That Domm and Harper (center and right in the photo) formed a business together (Jones, left, is a high school pal of Harper's) now seems like a natural progression. Friends who first met on the Colgate golf team and later became Sigma Chi brothers, they founded the Colgate Economics Club together. Harper was a political science/economics double major; Domm, an economics major and Spanish minor.

The genesis for Raceline was originally a business plan that a group of Harper's University of Chicago business school classmates came up with but never pursued. After several years building a career in finance, Harper began developing the idea. A light had gone on when he helped his wife, Lauren [Koskinen] Harper '96, start up her own jewelry company.

"It became clear that I wanted to be an entrepreneur," said Harper. "I had a good job at Boston Consulting Group, but it just wasn't as stimulating as getting something off the ground."

One day, he called Domm to get his advice on the general business strategy aspects of his plan. An expert in real estate private equity,

Domm had recently started up his own private equity fund.

"The more I looked into the concept, the more I realized the potential it had," said Domm. "Not soon after, I told Blake he needed help, and moved from New York to Chicago."

Bolt onto that their love of the automobile — Harper collected Matchbox cars and could be found disassembling RC cars as a kid; Domm has subscribed to Car and Driver since age 7 — and the rest is history.

Harper primarily handles marketing and technology, while Domm manages finance, product development, and real estate matters, and Jones covers operations. Along the way, several other Colgate alumni have joined in to advise, invest in, and otherwise support the enterprise, including Chuck May '65, Andy Shedlin '65, Dan Hurwitz '86, Brendan Boylan '98, and Matt Cady '97.


Building it bigger
Raceline has caught a lot of buzz, with widespread coverage throughout Chicagoland as well as major media outlets such as Fast Company, Entrepreneur, Crain's, CNBC, and NBC's The Today Show.

Momentum is building. Sales average 20,000 cars per year, and the company has 60 employees. In addition to walk-in business, they average two parties a day, from kids' birthday celebrations to grown-up corporate team-building events and bachelor parties. A third store is set to open in fall 2008.

The trio are continually tuning up and expanding their concept. They plan to grow smart, first in the Midwest, but they have an ambitious goal: 100 stores nationwide within six years, each having a unique track to create a circuit of destinations, plus building their online presence.

At the end of the day, said Harper, "Every person who comes in here needs this to be a special moment. As you walk in here and look around, you hold that obligation very close."

"We have a long way to go," Domm added. "We have all the growing pains of a start-up. But we're three guys with our hair on fire. Sometimes I'm so excited when I go to bed at night, I can't sleep, because I can't wait to get up and tackle the next day."

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