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?
Best practices: Upsize Business Builder of the Year
Downhill ride
by Andrew Tellijohn When Brad Cleveland isn’t working on building his company, he can often be found on a bicycle ride. The CEO of Maple Plain-based The Protomold Co. Inc. is an aspiring triathlete, and he’ll often ride 40 to 80 miles at a time.While his workouts take a while, his work life has been quite a ride the past few years as well. Since joining Protomold, the rapid-injection molding company has grown from $1 million in revenue to $18 million projected this year, and from about 30 employees in 2003 to 100 now.Protomold makes rapid-injection molding parts for manufacturers and, by industry observer and customer accounts, the firm is changing the industry. By using its proprietary software, the company dramatically cuts the production time — and thus the cost to the manufacturer — for making those parts, which allows their customers to get their products to market faster.Much like Cleveland does when he is out on a ride, the company abides by a simple credo: “If anything slows us down, it’s not compatible with our business.” Judges selected Protomold and Cleveland as the Upsize Business Builder of the Year, based on revenue growth from 2002 to 2004, which topped 900 percent, and its overall approach to driving healthy growth.While Cleveland, by design, has become the face of Protomold, the original idea belonged to Larry Lukis. In 1985, Lukis helped found a laser printer manufacturer that grew past $100 million. When that company began designing its own plastic printer parts, however, Lukis was shocked at how expensive and time-consuming it was just to get injection molded parts to work with.The problem stemmed from the manual labor involved in designing injection molded parts. Lukis figured with today’s technology, someone ought to be able to automate much of the work.So he went to work creating software that would design generic prototype parts for several different industries in a short time. He started with poker chips and worked his way up, working under the initial slogan, “Simple parts fast.”The result was a software system on the Protomold Web site where designers send in a model of their needs. Protomold responds quickly with either a quote or a detailed explanation of how the part must be changed to fit its process. “We don’t do anything if it slows us down,” Cleveland says. “Dozens of times a day we tell people their part is not a good fit with our process. Half the time they are able to change it.”And why not? Using the software, Protomold can now make parts that used to take two to three months and produce them in mere days.“Our best business practice is recognizing and sticking to our core business model,” Cleveland adds. “We don’t do anything that’s going to screw that up. We say ‘no’ all the time.”The strategy has been effective so far. In the six years since Lukis started tinkering with the software, “We’ve gotten faster and dramatically more capable,” Cleveland says. “We’ve been able to grow very quickly.”As Protomold added staff, revenue, technology and customers, Lukis knew it was time to start bringing on added help. So, in August 2001, he placed an advertisement in the local newspapers. Cleveland, who had been co-founder and vice president of AeroMet, a subsidiary of Eden Prairie-based MTS Systems Corp. “for a long time” and was getting ready to make his next career move, saw the ad and decided the job sounded interesting.Impressed by the straightforward business plan, the addition of Mark Kubicek as vice president of operations, and especially by Lukis’ vision, Cleveland joined Protomold as CEO two months later.The trio work well together. They are extremely open with the employees about everything from finances to the measurement of daily performance metrics “so every employee is pulling toward the same goals,” Cleveland says.Kubicek has great business acumen, Cleveland says, and will keep Protomold profitable while he handles the day-to-day operations. But with his constant improvements to the technology and his long-term vision for the company, Cleveland says, Lukis is still the glue. “What will cause us to double in two years are his technology and vision,” Cleveland says.Though 30 percent of its clients come from the medical technology industry, Protomold has more than 1,500 customers, none of which make sup 2 percent of its business, Cleveland says.“We are not dependent on any industry, much less any customer,” he says. “That comes out of how generic our technology is.”Protomold opened its first facility in Long Lake, then outgrew it within a year. Lukis, living near Lake Minnetonka, chose the current space. The company occupies 50,000 square feet of space spread over two buildings, and will soon add more in one of them. That will provide the company with enough space to double in size domestically, Cleveland says.Protomold sees demand for its technology in other regions of the world as well. In early 2005, Protomold began making plans to expand overseas. Cleveland and other company leaders met with government officials in England and Germany to select a host city. In May, the company publicly announced the formation of a subsidiary, The Protomold Co. Ltd., with the purpose of opening a plant in Telford, England.Cleveland says he had expected the process to take a year or more, but was pleasantly surprised at how much help overseas leaders were in helping facilitate Protomold’s plans.“It was interesting to see how well organized and exceptionally helpful the various local governments within England and Germany were,” Cleveland says. “This enabled us to complete the entire start-up, from concept to operational manufacturing facility, within seven months.”After deciding on the United Kingdom site, Cleveland hired John Tumelty as general manager of the British expansion. Tumelty and his “fantastic team” got the plant up and running in October.“I didn’t really have a detailed plan, but we thought that an October start-up was a pretty aggressive schedule,” Cleveland says. “It would not have surprised me if this had taken the entire year.”Less than 1 percent of Protomold’s revenue comes from overseas. But there is demand in European cities for the same kind of parts and innovation that have made Protomold a hit across the United States. Protomold will focus at first on marketing to companies in England and Germany “and then we’ll see,” Cleveland says.He realizes there are challenges in expanding internationally. Besides language and cultural barriers, marketing strategies differ not just by continent, but by individual country, he says. He wants to take the time to learn those differences and master those markets before moving on to more.The expansion “will keep us busy for a couple of years,” Cleveland says. Terry Wohlers, president of Fort Collins, Colorado-based consulting firm Wohlers Associates Inc., spends a lot of time in Europe observing and consulting with firms in the rapid prototyping industry. His firm advises in product design, rapid prototyping and 3D printing. Protomold’s expansion overseas makes perfect sense, he says.“The need is similar there as it is here,” he says. “It’s just a way of expanding the business.”Wohlers has known Cleveland since his AeroMat days and the two meet two to four times a year to discuss Protomold and the industry.“It’s a good company,” Wohlers says. “I have a lot of respect for Brad Cleveland. I think it’s going to continue to grow.”More than one local financier agrees. Brian Smith, president of Eagan-based Private Capital Management, thinks Protomold has just touched the tip of the iceberg. His firm this summer invested $2.5 million in large part because there is so much market share still out there for Protomold, both domestically and abroad.“It’s a relatively small company given the market potential,” says Smith, who joined the company’s board of directors when Private Capital invested. “It had all the elements you like — talented management and a great idea.”When the firm was considering investing in Protomold, Smith met with the executive team and left extremely impressed with Cleveland’s ability to identify potential issues, such as soon-to-be staffing needs, and handle them before they become problems.“Brad is an articulate guy, lots of energy,” Smith says. “He sees issues and addresses them quickly. He doesn’t let them become a big problem.”Wally Danielson, CEO of ImPres Medical Inc., knows Cleveland as both a customer and as a colleague. The two participate in the Edina-based CEO Roundtable together. Details of discussions held during roundtable sessions are confidential. But Danielson says Cleveland is intelligent and a non-stop worker.“He’s a guy that does what he says he is going to do,” Danielson says. “He has extremely high integrity. You just don’t meet guys like that everyday.”Cleveland, Danielson says, also has built a team of managers and employees at Protomold that work well together to provide service to customers. For example, ImPres, which makes non-surgical, non-drug-based treatments for gynecological disorders, needed some plastic parts to use while experimenting with one of its new devices. Normally it can take six weeks to get models made, but Protomold was able to turn the 25 around in two days. That saved ImPres time and money.“There’s such a need for what they are doing,” he says. Cleveland “got us 25 parts our engineers could play with in two days.”And while Cleveland himself spreads the credit around, in Danielson’s eyes there is no question what is driving the company’s success.“I think the success of the business is probably 80 percent Brad and 20 percent concept,” Danielson says. “There’s such a need for what they are doing.”Cleveland himself sees his best asset as his willingness to listen to others. He keeps his door open for employees to voice concerns or bring him ideas. For example, the company established a “just-in-time” molding strategy based on the recommendation of an employee who made an observation and dropped by his office.Cleveland remains glad he took the job, and, while he makes it a personal policy not to plan more than a couple years into his future, he doesn’t see himself seeking any other job anytime soon.As long as it stays fun, he’ll keep putting in the hours and save the triathlons for a later date. “This is the most rewarding and easiest, most fun job I’ve ever had,” Cleveland says, “because I’m surrounded by people who are so smart and good at what they do.”
[contact] Brad Cleveland, The Protomold Co. Inc.: 763.479.3680, info@protomold.com, www.protomold.com. Wally Danielson, ImPres Medical Inc.: 952.842.9322; wally@impresmed.com, www.impresmed.com. Brian Smith, Private Capital Management: 651.452.0212. Terry Wohlers, Wohlers Associates: 970.225.0086, www.wohlersassociates.com.
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