Taken from the Financial Times:

If you ask Max Barenbrug, the era before he created the Bugaboo pushchair was a grim time for fathers at the helm of a pram.

“You felt stupid. They had ugly bears on them, stupid colours, too much padding, white tyres,” says the 43-year-old designer. “I thought a lot could be done with strollers.”

Max Barenbrug made his prototype buggy while a design studentWhat started as Mr Barenbrug’s graduation project in the mid-1990s has today grown into a business with revenues of about €70m ($111m) and the rapt attention of style-conscious new parents in the 50 countries in which the Dutch company operates.

Few baby products divide opinion as strongly as the Bugaboo. Fans point to the elegance and utility of the design while detractors will ask them how they lug the main model, the Cameleon, up a flight of stairs or point to the price tag of about €830 (£550 in the UK or $900 in the US).

Celebrities such as Gwyneth Paltrow and Ben Affleck have been photographed pushing one, boosting a brand that has spent little on advertising. There are other buggies that cost as much, but few with the cachet of a Bugaboo, which, its fans say, underpins a healthy resale value on Ebay.

“Yes, it is expensive, but it’s worth every penny,” says Mr Barenbrug, dressed in a long-sleeved designer T-shirt and sipping a latte at Bugaboo’s headquarters in a southern suburb of Amsterdam. “If you cannot afford it or do not want to spend that much then go to the internet and buy it second-hand. You can buy beautiful models second-hand.”

In the reception area, Mr Barenbrug enthusiastically grabs successive Bugaboo models out of a display cabinet to show how the design has been refined over the years. He introduced the pram’s suspension, for instance, after having children himself.

Owners spread the word around the canals of Amsterdam

When it came to naming his company, Max Barenbrug stuck to the rather hastily chosen name for the buggy he had designed as his graduation project at the Design Academy in Eindhoven. “Bugaboo” was listed in his dictionary near “buggy” and he liked the ring of it. That its first definition is “an imaginary source of fear” never worried him too much.

“Great, huh?” he says. “In fact in my very old dictionary it says “goblin”, but I like that meaning a lot. It’s a little bit teasing, that’s what I like about it.”

Word of mouth recommendations have been central to Bugaboo’s rapid growth. “It was people meeting on the canals of Amsterdam, Bugaboo owners waving at each other,” 
he says.

With the exception of Stokke, the Norwegian baby chair maker that also sells a high-end pushchair, whose managers he praises for “going their own way”, he ignores the competition.

“If they do something it is in fact more likely that we are not going to do it, whereas the competitors work the other way round,” he says. “They look at what competitors are doing and then next year they all have it.”

He made the first prototype for his graduation project in 1994 at the Design Academy in Eindhoven. It shares the same basic shape and many of the features still found on the up-to-date Cameleon model, including a handlebar that flips over the chassis so that the child can either face forward or look back at its parent.

At the time, Mr Barenbrug was not yet a parent but noticed two things about the buggies on the market. As he looked out of the window of his second-floor apartment, he could see mothers in the street below struggling to attach strollers to devices that allowed them to be carried on bicycles. And, for men, he felt, the aesthetics were all wrong. He looked to mountain gear equipment for the materials and bold single colours that have become characteristic of Bugaboos.

Mr Barenbrug sent his designs off to established buggy manufacturers, hoping to sell his graduation project. “I never got an answer,” he says. “I found out that the industry is actually quite arrogant and I still think they are.”

Living partly off the generous Dutch welfare system, Mr Barenbrug continued to work on his design. Eduard Zanen, his then brother-in-law and Bugaboo’s other co-founder, had helped in the frantic process to make a rough-and-ready prototype in time for graduation and remained interested in the project.

Mr Zanen, who had his own company making first aid products, invested $5,000 to test the buggy’s central joint. It proved too weak and had to be re-engineered, this time by another relative with engineering knowledge.

The pair managed to produce 10 models to display at a trade fair in Cologne in 1997, where interest took off. A big Dutch retailer agreed to buy about 1,000 of the first production model, subject to further improvements in the design. Mr Zanen at this point invested $125,000, the first and last equity investment.

After interest from two big manufacturers, Evenflo and Dorel, failed to lead to any closer co-operation, Mr Zanen and Mr Barenbrug formed Bugaboo as a company in 1999, initially selling only in the Netherlands and gradually expanding abroad.

The toughest moments in getting the company off the ground came when setting up manufacturing in Taiwan, Mr Barenbrug says. “We now have 20 designers and engineers and it takes us two years or 18 months from drawing to production. I had to do that alone in six months,” he recalls.

The Taiwanese manufacturer he used at the time put Mr Barenbrug up in a nearby monastery. A big manufacturer of children’s buggies at the end of the 1980s, the company had seemed like a good choice. In fact, it was nearing bankruptcy and continued to operate mainly in order to speculate on the value of the land owned by the factory, Mr Barenbrug says.

This was actually a stroke of luck for Bugaboo. “If they’d looked at us from a business point of view they would have showed us the door on day one,” he says. As it was, Bugaboo’s orders allowed the manufacturer to put on a “façade for the bank”. And for Mr Barenbrug it meant he could produce some buggies before receiving firm orders.

Nowadays, production has shifted to a factory owned by Bugaboo. “The most important advantage is that when something goes wrong, you can be more effective in solving the problem,” Mr Barenbrug says.

Mr Barenbrug and Mr Zanen remain the only shareholders and have funded growth out of retained profits and bank loans. The latter no longer plays an operational role while Mr Barenbrug has taken the title executive director of design and lets a management team run operations. “I am the worst manager you can imagine,” he says.

Last year the company launched the first product that is not a direct descendant of Mr Barenbrug’s graduation project. The smaller €489 Bee addresses some of the criticisms levelled against the Cameleon and its predecessors by being easier to fold and more compact for stowing in cars or carrying up staircases.

Having achieved success with its pram, the company is looking to expand into other areas of personal mobility. “The baby market is covered,” Mr Barenbrug says. He is not quite ready to elaborate on his plans, except to say: “It could be everything with wheels, a bike, for instance.” His other graduation project in Eindhoven was a bicycle.

But one element of the buggy’s success will certainly be retained. “It will be quite expensive – yes, a good margin.”