8 ms·
TL;DR - It can turn out ok. Someone did steal my idea, a sales rep I fired. He took my product samples and copied it down to the flaws (small errors I had made
by gregpilling 11y ago
TL;DR - It can turn out ok.
Someone did steal my idea, a sales rep I fired. He took my product samples and copied it down to the flaws (small errors I had made in CAD), and on top of that made their product in Taiwan (vs mine USA), and they had much better execution, marketing, and much deeper relationships in the industry. They quite literally got the front cover of every industry catalog, of all the major distributors in all 50 states (1). I have estimated that by the time they got the first 40' container of product in from Asia that they were double our size; we worked out of a 16'x16' garden shed at the time (2).
I have battled them for 10 years and they just sold for 12 million. I would be happy with 1 million. But the truth? The truth is that having a competitor HELPED not hurt. The sales conversations went from "why would I buy that?" to "How does it compare to the other guy?" . in short, their aggressive marketing towed me along in their wake. The geeky informed buyers would buy the USA made original (mine), and the mass market would buy his.
The main outcome is that I could stop spending marketing on advertising, and focus on innovating and product development. Since my industry is distributor based, and my competitor was #1 in all of them, the best way to compete was to out innovate. Also the easiest, and most fun way. Anytime a new truck comes out I usually have a 3-6 month exclusive window before his overseas operation can deliver product. We pick up a lot of new wholesale customers when that happens.
I think that the outcome could have been worse without the 'copy'. For years we couldn't have made the product any faster, we had massive growth in sales. $90K first year, $500K second, $800K, 1.2M, 2M .. it was hard to buy steel some months we grew so fast. In the end. a competitor is not the end of the world, it is a way for the buyer to make a choice - this guy or that guy. It can be easier to sell if they have someone to compare to; when they have nothing it is a little disorienting for a buyer and they tend to not buy anything.
1. product: leveling kit for trucks, so people can put aftermarket wheels and tires on. Another 20 companies copied the product afterward but we don't hear much about them.
2. We have moved twice. From the 16x16 garden shed, to 6800 sq ft, to the current 15,000 sq ft. We now employ 10 people and 5 robots.
- meesterdude 11y agoThank you for this comment, very interesting to read. No better salesman than crappy competition. Or in this case, competition in the first place.
- gregpilling 11y agoYes, the conversations with customers totally changed once he was on the scene. Instead of them asking "What is your product again?" in a confused voice, they would ask "How are you different from the other guy?" which then gave a nice opening to tell the story, and get the customer most of the time. Everyone loves the underdog.
- prawn 11y agoWrite that up somewhere and submit. Interesting story!
- WalterBright 11y agoVery interesting experience. It's true that competition can legitimize a product (i.e. social proof) and make it more saleable.
- gregpilling 11y agoYes, I learned that one 25 years ago. I had a tool truck, selling tools to mechanics at auto shops and for half my area I was the only one. One day a competitor showed up at all these shops that I had an 'exclusive' on. My sales to them went up, because they now had some point of reference. My stuff was 5% more expensive, but 25% better. With something to compare to, it now appeared to be a better value than previous.
- maxst 11y ago> We now employ 10 people and 5 robots. As a time traveler from 1960, I'm totally not surprised to read that.
- M8 11y ago"We now employ ... and 5 robots." Thank you, this is a minority society doesn't care about enough! Seriously, very pleasant to read.
- TeMPOraL 11y agoIt's very saddening how much discrimination and hate this society has and still is suffering from. Their grand-grand-grand-...-parents were ruthlessly killed, today they're accused of taking jobs away from other citizens. The media keeps creating horror stories portraying them as the ultimate evil, and the only time someone ever people stop whining is when there's a war to win. It's very nice and refreshing to see a different attitude.
- pi-rat 11y ago"We now employ 10 people and 5 robots." As a robot, let me thank you sir, for not discriminating.
- afterburner 11y agoIsn't he discriminating by singling robots out as different, as not people?
- myth_buster 11y agoEqual opportunity employer.
- gregpilling 11y agoActually we are! We are a little unusual for having 50% female employees in a industry that is 99% male. I think I like the robots more than the humans most days though :)
- izolate 11y agoHN, please stop with the irreverent and jocular replies. This is an insightful comment to be taken seriously.
- angersock 11y agoI'm willing to wager that, at some point, GP started making jokes about their situation once they found out they'd been cloned and were now competing. If you can't deal with a bit of humor, you should probably refrain from interacting with functioning humans beings.
- lovemenot 11y agoWhy would you be happy to sell your company for $1M when you've already had revenues of $2M? Have sales declined so much since?
- nl 11y agoRevenue on physical products is dramatically different to profit. Given that growth rate and the need to invest in new facilities and production facilities (ie, robots) it wouldn't surprise me to find the OP is running at break-even.
- gregpilling 11y agoWe are mostly cash flow limited, and credit limited. For example I am trying to buy 4kw laser cutter right now and I am having trouble getting financed. The business is 11 years old, but because of things it is a 3 year old LLC that looks like it doesn't have enough business history.
- scintill76 11y agoI think he meant he hopes to eventually get some money out of them for stealing his design, and that just one-twelfth of their recent sale price would be satisfactory.
- j2bax 11y agoI'm pretty sure he was comparing the value of their company to his not saying he was hoping for them to randomly cut him a check for 1/12th their selling price.
- reagency 11y agoHe was saying that he didn't even have a grand aspirations as what his product was worth, a smaller payday would have made him happy, if fates had just been less cruel.
- 11y ago
- rplnt 11y ago> Someone did steal my idea, a sales rep I fired. He took my product samples and copied it down to the flaws He didn't steal your idea. He stole your product, your work. That's radically different.
- tylermauthe 11y agoAnd arguably worse -- a product is a developed idea.
- reagency 11y agoNot "arguably" . that's the point of OP article.
- gregpilling 11y agoHe also followed our sales guy around and went into every reseller right after him. He has a bag full of tricks. In the end, here we are. At least every day I don't look at the mirror and see a liar and thief looking back at me. I am ok with it at this point.
- edpichler 11y agoReally interesting story. Is this big competitor a mainstream brand?
- gregpilling 11y agoHe is in my industry, but unless you are into the modified truck world and go to SEMA every year you would probably not have heard of them.
- jokoon 11y agoWhy did you fire him ?
- gregpilling 11y agoWe fired him* mostly because he was a real jerk to deal with. I found out later from other people in the industry he got fired a lot, mostly for being very abrasive and difficult to work with. A friend of mine fired him 4 hours after hiring him. After I fired him he actually shut down his rep agency (20 product lines and 7 reps) to focus on competing with me. That really surprised me that he would close his company to go head to head with me, at that point I realized I must have a way better idea than I thought. * technically we fired his sales rep agency, since all 7 of his reps sold our line, his company repped for about 20 product lines at the time.
- carrotleads 11y agoQuite pleased to hear this. I take the same view with competition. Its bloody hard work to educate your market segment. I have come across a few fintech startups who have voiced the same opinion. They don't feel threatened by the other startups playing in the same space trying to change people's habits..
- gregpilling 11y agoAgreed, I have been in business for my self in one venture or another for 25 years and competition never bothers me if it is at least a little fair.
- tylermauthe 11y agoWhat a great write up! It's so refreshing to see people not succumbing to the life of fear that is pushed upon us so heavily by all aspects of modern society.
- gregpilling 11y agoI am pretty much unemployable, so the only choice was to make it work somehow. Don't worry there was plenty of fear, I just could do anything about it. "Feel the fear and do it anyway" is a favorite expression in my household.
- tylermauthe 11y agoReminds me of: http://www.jimcollins.com/lib/goodToGreat/ch4_p83.html http://www.jimcollins.com/lib/goodToGreat/ch4_p83.html From the book Good to Great. Excellent read!
- gregpilling 11y agoStockdale's quote has been taped to my wall since 2008 “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
- thaumasiotes 11y agoAdding my voice to jokoon's -- I'd love to hear why you fired this guy. He sounds pretty competent -- what happened?