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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Beth Ewen
November 2007

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How Joel Hazzard transformed Ergotron into an innovator for the mass market

Harry Sweere, the late founder of Ergotron in St. Paul, tapped Joel Hazzard in 2001 to run a sister company. At the time it was a think tank, with no products and no customers. Two years later, Hazzard and his team had generated $10 million in sales, and then combined the two companies and started the maker of ergonomically correct display monitor products on a fast growth path. His mantra for innovation: Act like Harry.

“I go out personally and install products all the time. Innovation comes because you’re very connected to the end user. Our goal is to make tremendous products that are affordable, so we can get them to the masses.

Harry was an awesome guy. Everyone said, “How are we going to replace Harry?” I said, “We’re not going to replace him. We’re going to act like him.”

Harry was a great innovator of products. The business model was, he would create ideas and then the sales team was engaged with the end user, so products would get watered down. We had 3,000-some parts numbers, and we would focus on an individual niche.

In October ’04 Harry asked me to take Ergotron and Constant Force Technologies, they were the two sister companies, and put them together.

I joined the board of Ergotron in ’97. In 2001 he asked me to take over CFT. He launched it in 2000 with a million dollars of his own money plus other investment. It was just a think tank, no products. By 2004, we generated over $10 million in sales.

After we combined the two, we right away obsoleted almost all of Ergotron’s products, and we launched a whole bunch of new products.

We wanted to get the mass market. We knew we weren’t going to be able to brand, because that takes tremendous marketing spending. The combined company then was $58 million.

We got some resistance. There’s always complacency. The company wasn’t doing so well at the time. The first thing we did was change the culture.

Did you ever have a boss you didn’t like, and think of all the time you’d go home with excuses? And did you have a boss you really liked? If you loved it, then you wake up with ideas.

It all starts with the best people. We have a lot of great people programs, like four weeks off starting the first day you walk in, a monthly catered picnic. You get a culture right and people will do a lot of amazing things.

We have on the wall our E&B statement, expectations and behavior, and on the Web site. People say it’s not very corporate and it’s not, it’s real life. Like this one: “We will get problems (stinky fish) on the table right away so we can quickly solve them.”

If you clean fish and leave the guts around, it’s going to stink. Problems are the same way. If you don’t get out the problems, aren’t they going to stink? It’s about honesty and teaching. You have to spend the time.

We also spent a great deal of time on people mapping. We plan where we want to be in 2009-2010, so if we want to grow there, we have to find the people.

When you interview people cold, it?s not an exact science. No one says on their resume they don’t want to work hard. But if you talk to great people and you catalog them, that’s what we do all the time.

For example, I ran into a Samsung rep in Canada at a conference. I thought she was brilliant. I came back to our HR person and said, “follow up with her. Get her in our database.”

We probably have 150 people banked. Right now between 60 to 70 percent of people we hire, they are people we’ve networked. We’ve got a program launched this year to make it formal, not casual.

Getting back to targeting the mass markets, as I said we couldn’t brand. Our products have very good value for the end user. We had to create the value proposition for the people who were going to sell it, the Dells and HPs. The major reseller would be able to make more money and differentiate itself, by using our products.

Let’s say on a $1,000 notebook computer, there’s a $35 profit. That’s about right. Let’s say they sell one of our stands with it, and can sell it for $79 more. So they double their margin right there.

The reason we’re with Dell and HP and others, they spend hundreds of millions of dollars in the mass market.

I’m trying to get the whole company to be very innovative. The first thing we do when we hire, on their first day we say go out and install a product, and sit down and gauge the customer’s reaction.

I install products all the time. You’re going to learn a lot. If you hear how someone loves the product, you’re going to feel great about Ergotron, too. The more you send your team out to engage the real world, the more ideas you’ll get from them.

You can create great ideas, but if you don’t execute someone else will take it from you. Your competitors will shoot at you. You better get it right the first time. Then you better obsolete yourself.

Take Ergotron’s early days. Harry invented the Mac tilt-swivel. It was beautiful, but there wasn’t a supply chain. Now there are hundreds and hundreds of those products in use and Ergotron doesn’t benefit.

When you’re innovative it doesn’t mean you can lock up ideas with patents. We have a tremendous amount of patents, but we wouldn’t make any money if we spent all our time litigating. You have to defend but you have to outrun people.

I envision Ergotron will be well over a billion dollars in scale. We’ll do $130 million this year. Our goal is to launch 20 significant mass market products every two years. We’re self-financed. We think we’ll continue to generate cash.

I think Harry would be tickled. But I think the good thing is we didn’t replace Harry, we started to innovate like Harry, and put in the infrastructure so we wouldn’t lose our products.”

-As told to Beth Ewen

[contact]
Joel Hazzard is CEO of Ergotron Inc.:
651.365.6672;
jhazzard@ergotron.com;
www.ergotron.com