Published in the Pacific Coast Business Times, July 26, 2013 (PDF)
Lynn Thompson has always considered himself somewhat of an outsider in the knife industry, even after three decades of success in it. The founder and president of Ventura-based Cold Steel acknowledges that his in-your-face marketing style, his fixation with what he calls the “warrior lifestyle” of martial arts, guns and big-game hunting, and his over-the-top promotional videos can sometimes rub people the wrong way. He has his fair share of critics. But Thompson prides himself in being, above all else, completely genuine.
Thompson founded Cold Steel in 1980 after he was driven out of the real estate business by spiking interest rates. A lifelong martial artist, he had sought customer support when his knives repeatedly broke during training, but got none. He decided there was an unfulfilled demand for high-quality, dependable knives.
Cold Steel’s knives were distinctive and immediately caught on. Though the company was still working toward an efficient production model, the first big hit was in 1980. Thompson introduced the Tanto, an Americanized version of a traditional Japanese knife. The Tanto still ranks ninth in Blade magazine’s list of top knives between 1973 and 1988.
Thompson quickly carved out a niche for Cold Steel by focusing on creatively designed tactical knives, blades made specifically for combat. The next big hit was the Trailmaster Bowie knife in 1988, which he said made $3 million to $4 million in sales the year after it was released. The windfall allowed Thompson to pay off all of his debts the same year. The rest of the industry began to come to Thompson, shifting toward tactical products. But he said he felt less and less emphasis was being placed on producing battle-ready blades in favor of flashy looks.
“My competitors are making knives more as toys than real weapons, and we haven’t adopted the toy trend because that’s not what we’re about. We are the real deal,” Thompson said.
In the early 1990s, the success of the Tanto and Trailmaster Bowie faded. Thompson struggled. Consumers balked at the higher price tag for Cold Steel’s quality. Thompson believed the solution was to connect directly with them and to show them why the extra money was worth it. Cold Steel became an early adopter of new marketing technologies. The company helped pioneer the practice of distributing DVDs and online marketing in the industry, Thompson said.
The Internet channeled Thompson to a much wider audience. Online, he crafted an image for Cold Steel, structured mostly around himself as the spokesperson. He made videos and blogs about hunting trips with Cold Steel knives, sliced away at hunks of meat to prove the durability of their edges, and subjected knives to strenuous tests of performance.
Steve Shackleford, editor of the knife industry’s leading magazine, Blade, said Cold Steel’s direct connection with consumers has given it high visibility as a tactical-focused knife brand. “Lynn Thompson’s ability to self-promote really sets Cold Steel apart. He puts out the best catalog, I think, of any factory knife company that I know of,” Shackleford said.
Thompson said Cold Steel is currently experiencing steady double digit growth and has been for the past four to five years. He credits much of this to his online marketing tactics. He declined to release an exact revenue figure, but said sales are in the range of $30 million to $40 million. “I don’t want my competitors to ever learn how much of an edge we have because we are breathing down a lot of their necks right now,” Thompson said.
Cold Steel ships its knives all over the world. The company bases all of its manufacturing in Japan, Taiwan, China and South Africa. Up until 2006, the company carried out 35 to 40 percent of its manufacturing in the U.S., but the factory it partnered with shut down. Thompson wants to relocate manufacturing the U.S. for better quality.
Thompson believes that a businesses should know its products inside and out. A lifelong martial artist and knife enthusiast, he spends twelve to fourteen hours every week in personal training with some of the world’s leading fighting experts in the area and is skilled in a laundry list of martial arts.
Ever brazen and never missing an opportunity promote, he strongly resents competitors he believes lack enough first-hand knowledge of knives to fully understand them.
“They wouldn’t know how to use knives for more than buttering their bread. Most of my competitors have never skinned a deer, never cleaned a fish. The only thing they use a knife for is to put peanut butter on their toast,” Thompson said.