Rob Brady's business — a fusion of product design and technology — was being crushed by the recession. He took some high-stakes risks to begin turning the company around.
Rob Brady gets the same question before every business trip he takes to pitch his technology design company's products in Las Vegas: Are you going to gamble out there?
Brady has a joke at the ready in retort: “I'm a small business owner, so I gamble every day,” says Brady, chief executive and design director of Sarasota-based Robrady. “I go to Vegas to get some rest.”
Technically speaking, however, that is no joke. Brady, whose 19-year-old firm has designed products from electric bikes to Lasik surgical tools to a pair of floating pliers, has led a seismic — and risky — shift at the company in order to survive the recession. That has included altering the company's business model to design and test several products on spec, instead of building those services into the initial contract like it used to.
Moves like that are six-figure gambles for the company, which has 50 employees and works out of a six-building campus in an industrial park near the Sarasota Bradenton International Airport.
It's also rare in a thin-margin, high-cost business such as product design and marketing.
The good news for Robrady is that the risks are starting to pay off. The company has certainly been pummeled by the economy, including having one client go from $1 million worth of orders in 2007 to zero orders in 2008.
And overall, Brady says the company's revenues are down at least 30% since reaching an all-time high of about $5 million in 2007. He declined to release specific annual sales figures.
But as 2009 winds down, Brady says he's seen some signs, albeit small ones, that “customers are starting to come back.” He bases some of that optimism on conversations he's had with previous clients. Two of those customers are actually companies that are coming out of bankruptcy protection under new owners.
Another facet of Robrady that has helped it survive the recession is its wow quotient. The company is well known regionally for its sleek and unique designs that Brady says are meant to combine technology with functionality.
“It has the coolness factor,” says Stephen Barker, who runs Digital Frontiers Media, a Sarasota Web and graphics design firm that has worked with Robrady on several joint projects. “It actively seeks out innovative projects as opposed to being a production mill.”
The big challenge now, says Brady, is to turn the company's coolness into more sales.
In that vein, Brady doesn't consider other design firms his competition. “We're in competition with consumers pockets,” Brady says. “You have to have significant value to make them buy something.”
'Trendy and sexy'
To insure that Robrady's opportunities to reach customers are widespread, Brady has long put a premium on having a diversified business in terms of markets, products and geographies. The company operates in the marine, health care, industrial and consumer electronics markets, with products being sold both domestically and globally. Past and current clients include General Electric, Mercedes-Benz, Dell Computers and AT&T.
One of the firm's more prominent product lines it designed is a series of gasless electric bikes that can travel up to 62 mph. Robrady partnered with Rhode Island-based Vectrix on the design of the bike, a cross between a motorcycle and a scooter that is marketed as a personal electric vehicle.
The electric bikes sell for about $10,000 and have sold well since debuting early least year, thanks in part to the go-green trend currently engulfing the country. But Peter Hughes, Vectrix's head of technology, says the bike's success could also be traced back to Robrady's design work.
Hughes says his firm's engineers did the dirty work of building the bike, but it was Robrady's design team that put “the finishing touches and the clothes on it to make it trendy and sexy.”
Indeed, Brady says the Robrady design team spent a few years tinkering and testing designs for the Vectrix bike.
Now Robrady is hoping to ride another transportation-related product to success as the company looks to 2010. That product, known as the db0, is a folding electric bicycle.
Brady says the patent-pending bike, which has received national recognition for its innovative design features, could be the company's coolest product yet. The bike also represents one of Robrady's biggest risks, as the firm did much of the design work for it without having a signed contract.
And the concept phase alone, says Brady, cost more than $100,000. Other work the firm did included patent applications and field-testing.
The gamble, so far at least, has worked out for Robrady. The company found a partner for its spec designs in Taiwan-based DK City Corp., a $400 million transportation industry manufacturer with offices in Taiwan and Shanghai, China. Brady expects the db0 to debut in the global marketplace by the first quarter of next year.
Brady says navigating the challenges of this recession, such as doing work on spec, are daunting but not totally surprising. That's because he's been here before in some regards.
For instance, Brady got into to the product design industry in the early 1990s, just as an economic downturn was building momentum. He initially worked for a few powerboat design companies in the Miami area. But the company he was working for collapsed.
“I found myself in the middle of a recession without a job,” says Brady. “And no one was hiring.”
Brady began to build a career for himself by freelancing work. Even then he would do work on spec, setting up imaginary deadlines to keep himself focused.
His freelance work led to some lucrative contract jobs with Yamaha, which was looking for new boat and engine designs. After a few years with Yamaha, Brady felt he had enough experience and guts to go out on his own.
Looking back on those years, Brady says one key lesson he learned was that no matter how cool or wow-like the design is, “it won't see the light of day if the business side doesn't work.” That, in turn, taught Brady how to be disciplined on expenses and watch the cost side of his business — not something that's first nature for the design set.
Brady's recession lessons also allowed him to move quickly when the downturn infected his company this time around.
By the middle of last year, Brady had already begun renegotiating rates on just about everything his company pays for, from cell phones to rent. The company also let go of about 10 employees last year and has since stayed at about 50.
The recession has also made Brady work harder than ever before, a common refrain these days among Gulf Coast executives.
“I'm passionate about what I do,” says Brady. “I'm not going to go flip burgers.”