Thursday, March 31, 2016

Lesson #229: Marketing Tactics Evolve as You Scale--A Big Ass Case Study

Posted By: George Deeb - 3/31/2016


& Comment

Very rarely does the same entrepreneur that founds a company have the same skillsets that are required to scale the company.  And, when I meet entrepreneurs that have successfully accomplished that, I give them extra special credit. I recently got introduced to Carey Smith, the founder and CEO at Big Ass Solutions, a Lexington, Kentucky based manufacturer of ceiling fans and lighting that Carey successfully grew from $0 to $200MM in revenues over its 17 year history (1999-2015).  He was kind enough to share his "sales and marketing playbook" for each phase of the company's growth, to show how it was accomplished and evolved over time.  Hopefully, there are some useful tips for all of you to learn from.

$0 to $10 million

At the very beginning (1999), the company was founded as the HVLS Fan Company and had very little money. Only a few people were involved with the business and advertising budgets were less than $10,000 a year. The company wrote a lot of articles and did a lot of public relations in the early days. And, they relied heavily on offering customers a "try before you buy" satisfaction guarantee, as many customers did not believe a large ceiling fan could actually cool a large industrial facility as well as an air conditioner could.

After gaining a small foothold with six initial products, the company tried working with some distributors. But, the company quickly recognized that their interests and the resellers’ interests rarely converged, given the heavy educational aspects required in selling the product, one they had never seen before. So, after the company learned the distributors were not all that helpful in driving sales, they quickly shifted entirely to a direct sales process which they could control.  And, that's when the business really started to take off, hitting the $10MM revenue market after around 5 years in business.

In 2003, the company heard their customers start referring to their products as "those big ass fans", and the company made a major rebranding decision to rename the company to Big Ass Fans--a name that would much better be remembered in the customers' minds.

$10 million to $50 million

It took the company approximately 8 years (2004-2011), to grow from $10 million to a $50 million, driven by big investments in people and product development, including its first mobile floor fans.

In 2004, the company released a new industrial fan that was 20% more efficient than what had come before, and the company was materially scaling up its employee base to keep up with the growth (where recruiting became a lot easier, after the company was seeing material growth and success).  They moved to a new headquarters in 2006, that was able to house all 50 employees in marketing, sales, customer service and manufacturing were all under one roof.

With more people coming on board, Smith knew if he was going to build the company, he’d need them to stick around. The company offered better hours and more stability than other manufacturing businesses in town, which instilled long term loyalty with employees. And, the company made sure everyone got what they needed, in terms of salary, bonuses, and equity ownership in order to attract and retain the best people.

In 2007, the company hired its 100th employee, effectively doubling in size in less than two years. The company continued developing, testing and adding products and in 2008 it released its first fan designed for non-industrial settings, such as churches and auditoriums. It also opened its first overseas office, in Australia.

$50 million to $100 million

Getting to $50 million (216 employees in 2011) took 8 years, but the jump to $100 million (480 employees in 2013) only took 2 years. Part of that can be attributed to the investment in research and development as well as people during the 2008  recession, which allowed the company to recover quickly. But, the company believes its rapid growth – approximately 30% every year since 2009 – is the result of its commitment to customer service, employee satisfaction and supplier relationships. 

Always looking for new opportunities, the company added more overseas offices, where they work with various partners and resellers because of logistics. These decisions led the company in a new direction in 2011 when the company forged a relationship with John Noble, the designer of a silent, energy efficient residential fan in Malaysia. The company released its new, sleek Haiku residential line in 2012, which has been very successful. With the addition of smart technology and automatic operation, Haiku has forged a path into the burgeoning world of “The Internet of Things.”

Carey said "Any day somebody might contact you with a new idea that could save time or money, or lead to a promising new path. And, at the same time, you need to encourage innovation within the company by employing dozens of engineers, including a designated R&D group, whose sole assignment is simply to explore unusual uses for the company’s products."

$100 million to $200 million

The company continued its growth from $100 million in 2013 to $200 million in 2015.  And, the company is on its way to $300 million in sales in 2016 with an employee base of 850 employees today. Approximately $70MM of this is the under the Haiku residential brand launched in 2012.

Part of this growth is a result of the company launching a new lighting division in 2014, Big Ass Light, which began with a focus on industrial strength LEDs, but has quickly branched into commercial and residential fields with the continued development of new products. The creation of Big Ass Light led to the company officially changing its name to Big Ass Solutions in 2014. 

The company also tested the big box store market with a few big retailers such as Home Depot, and launched ecommerce efforts for its Haiku residential division. In addition, the company reduced the number of resellers that it works with, replacing them with more strategic partners such as Amazon, Nest and Thread.

Big Ass Solutions now has sales offices in six countries, and its products are distributed in over 125 countries.  The company has aggressive international expansion plans, planning to double its international offices to 10 locations in the coming year.


What an adventure!  The most important thing to glean from this post was how Carey continued to pivot and grow the business in new directions over time.  Industrial was expanded to residential.  Domestic was expanded to international.  Few products got expanded to many products.  Fans got expanded into lighting.  And, so on. Not to mention, recruiting and retaining great talent along the way.  Thanks Carey for sharing your great story here, and congratulations on all your amazing success.  Let it be a lesson for all of us to learn from.

For future posts, please follow me on Twitter at: @georgedeeb.

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