Feisty Competitors Fight the Chains Barnes & Noble came to town ... and Brian Baxter's (Baxter's Books, Life in the Trenches) sales took off! The ebullient Baxter saw Barnes & Noble's incursion as a challenge and an Opportunity more than as a threat. "Barnes & Noble has only one thing: everything." he told us. And Baxter's effort to personalize, personalize, personalize sets him apart far apart as he sees it (and the sales figures add credibility to his brash claims).
I'm sick and tired of "independents" (booksellers, haberdashers, travel agents, manufacturers) telling me how tough it is when a giant competitor moves in. I don't see it that way at all. I think independent anything has an enormous advantage if its leaders are wise enough to see it and capitalize on it. This month's issue is testimony to that point of view.
If you think it's tough for a $1.5 million independent bookseller to compete against Barnes & Noble, try being a midget taking on Intel or GM. Cyrix Corp. and Renaissance Cars Inc. have done just that (What's Working). Cyrix boss Jerry Rogers says he "didn't believe the myth that it takes hundreds of engineers and four to five years to do a microprocessor." So he proceeded to do in 18 months with six engineers and $10 million what perhaps takes Intel four years, 100 engineers and $250 million. Honest!
The story is about the same when we turn to legal (Dillingham & Murphy) and accounting (Shilling & Kenyon) services where small firms are winning favor with big accounts e.g., 14-lawyer Dillingham & Murphy serves Du Pont with distinction.
One trick is being big and small at once. Using information systems and expert network partners, for example, the small firms have been able to reach out to the best resources anywhere.
Will Cyrix humble Intel? Will Renaissance Cars bloody GM? Maybe. Maybe not. (Renaissance Cars admits that if it's wildly successful it may end up selling itself to one of the Big Three.) But all the examples in this issue prove more than "there's room in the market for small and midsized firms." They prove that small and midsized firms can knock the socks off their bigger rivals if they clearly understand what makes them special and never sit on a pat hand. That's a lesson for companies of any size.
How 40 employees and $4 million beat the Big Three to the punch
PALM BAY, FLORIDA If you want to do something insane, like take on the Big Three automakers, it helps to be small.
So says Dennis G. Kaiser, director of marketing for Renaissance Cars Inc., a 40 employee start-up that is bringing the first low-cost, high-performance electric car to the U.S. market next month.
Unlike most previous electric vehicles, which were built on existing car bodies with retrofitted motors, the Tropica Roadster a sporty two-seater reminiscent of an early model Corvette was developed from scratch. Its ground-up design means the car has only about 1,200 parts rather than the 10,000+ on most gas-powered cars. Among other parts you won't find on a Tropica are a transmission, drive train, carburetor, fuel tank or catalitic converter.
It does sport an all-aluminum chassis, advanced plastic-composite body parts and will go about 70 miles between charges, reaching speeds up to 62 miles per hour. To keep the price low, there is no air conditioning. Instead, the first models are all convertibles, to be sold initially in Florida and California.
While the Big Three are mired in half-hearted attempts to develop electric vehicles with projected prices of $40,000 to $80,000, the Tropica will retail for $15,000.
Already, there are more than 1,000 orders for the car. out of the 3,000 to be built the first year of production. That's chump change for Detroit which is exactly the point.
"GM spent $10 million to develop a new door latch and handle assembly," says Kaiser. "They can't fathom going into production to build just 3,000 cars. They're just too big to ever go that small."
By contrast. Renaissance has spent about $2 million in cash and $2 million in invested services to bring the Tropica to market. Renaissance founder Robert Beaumont, whose failed Citicar launched the electric vehicle industry 20 years ago, hopes not to bury Detroit. but to instead tap its dealer network. So far. Kaiser has recruited Chevrolet, Lincoln, Land Rover and BMW dealers to invest in the Tropica and also to sell its cars.
GM supplies parts for the Tropica, and Kaiser expects one of the Big Three to eventually make Renaissance a buy-out offer with the aim of applying Tropica sales toward the clean-air mandates for their own car lines.
In attracting talent. Renaissance relies on agility over muscle. The company has recruited top designers, engineers and technicians despite "insultingly low" base salaries, says Kaiser. The trick: rich stock-owner-ship plans for about half of its employees. Until this month, Renaissance had just four assembly workers turning out prototypes; it is now hiring about 30 line workers to begin full production.
"Robert Beaumont is very crafty in recruiting the best of the bunch" from Florida's high-tech Space Coast. says David Goldstein, a Washington lobbyist for the Electric Vehicle Industry Association. "He has also focused his design and development efforts on producing a car at the right price."
The car's original design and reduced part counts allow Renaissance to nearly match Detroit's most efficient new plants, at 22 worker-hours per car, about half the time it took the big players to build a car - just a few years ago.
Such productivity gains are pushing even the big carmakers to question traditional economies of scale. As n Chrysler President Robert Lutz puts it. "We used to think, 'The big will eat the small.' Now it's, 'The swift will eat the slow." And in the electric car market, while the Tropica is going from 0 to 30 mph in under five seconds, the Big Three are still in the starting gate.
For more info ... Contact Dennis Kaiser at 407/724-2284.
ON ACHIEVING EXCELLENCE / OCTOBER 94
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