Saturday, November 26, 2011

Bad Business Model, Winners are Grinners and History is Written by the Victors

I simply can't find any google results for a South Australian company that still existed in the early 90s that went by the name of Titan Electronics. I watched it through its last years - it eventually died and is now a ghost. One day on a clean out I'll find some old business cards from 1989 and the logo (a pink a black pair of squares) won't be lost forever. More about me and Titan later.

But the sister company, Practel appears to not have died, just morphed into something less. And according to a couple of insiders there were some crazy internal politics - the cancer was eventually cut out but not before the owner had lost his company and the cancer popped up somewhere else, since building a nice little career.

But fresh out of trade school in military electronics manufacturing, Titan Electronics employed me as a sales rep on $18,000 per year, threw me the keys to an XF Falcon, a petrol card, a list of companies that had bought in the last four years and told me they didn't want to see me in the office between 8.30am and 4pm. Remember this was the days before email, and even mobile phones. So the brief was essentially "cold call these guys who have once bought from us, and anyone else you see." Still they gave me the opportunity to learn and I won't be ungrateful for that. Special mention to Mark Tilka, later Max Beacom (RSB), Rod Davis (Cryovac), and Larry Lockshin (UniSA) for opening some doors a crack.

Titan was a business that traded on local representation. Opened - I think - in 1982, way before even fax machines. A whole bunch of eastern states manufacturers and importers of electronic wire and cable saw South Australia as a bit of a problem. They knew there was some volume here but nowhere near enough to set up an office. Little has changed really, has it? But Neville Woodcock offered a solution to these guys. Like the confectionery wholesaler with a folder full of products that can supply a milk bar, Titan Electronics had a bunch of manufacturers and importers who were happy to give Neville some discount - or not - in exchange for local representation. And then, with a heap of bravado and the benefit of some asymmetric information, the sales guy would travel around and get some orders.

Rojone (AP imports), Hartland Cables and about 15 other businesses got some volume they wouldn't normally have, and Neville made a few bucks. In reflection I can see a few bugs here:
  • Middlemen seldom create enough value to pay a wage (more so these days)
  • The principals that were at a disadvantage were the ones interested (Rojone imported milspec connectors ($4 vs 25cents) and Hartland Cables were Australian Manufacturers (say no more)
  • Often the sales were made to buyers who didn't know better
So, by 1989 when I left AWA Defence Industries and embarked on my illustrious sales career, the world was on the cusp of a new order. Companies were realising they could pick up the phone, give some credit card details and get the product a few days later. ffs the name of our supplier was written on the boxes they got! Faxes were in. Oh and there was the matter of the State Bank disaster and the global recession following the 1987 crash. (Australian GFC refugees you ain't seen nothin').

So for all of 1990 this 22 year old schlepped around Adelaide electronics manufacturers (lol) looking for the nugget of huge volume, with a manufacturer who wouldn't deal direct and was willing to pay a 20% premium to have the product travel through the Titan warehouse. That's correct - more expensive and slower.

We managed the odd few, Julie Sibenaler and myself managed to lever $20,000 of triaxial cable into the (then just being built) entertainment centre, $10,000 of uninterruptible power supplies into Co-Operative Security Services. Neville himself scored $20k of UPS into Suburban Taxis.

Still, a year of feeding on scraps and a little corporate charity took me to a Friday in February 1991 the new sales manager (Mark had been sacked) said "we need to go upstairs".

The line was "[sales manager] has followed up some of your contacts and converted some sales. We've made continual suggestions to you for the last three weeks and it appears you haven't followed them. We're advertising your job tomorrow, and we will be trying someone else out in your position"

Poor little me "ok, no problems, and my job will now be to..?"

"no, no Cullen, you don't get it. We'll be trying someone else in your job"

Aaha.

And the story has never changed. They weren't interested in my thoughts about the nature of their troubles, and why would they be? It wasn't my job to structure the business, it was mine to cold call people who'd bought us once and anyone else I saw. Oh, and generate $100k per month doing that. I failed.

So the two outtakes:
  • Winners are grinners, losers please yourselves
  • History is written by the victors

But on reflection I would include the modifier "in the short term". The person who won the job at Titan that Saturday was a grinner, I'm sure, in the short term. And those two guys at Titan got to write their version of events for a while. But these days the business is dead, the owner is picking up odd contracts for industrial supplies office doing sales training and [sales manager] - well he seems to be doing alright, somewhere else.

And long term history gets written in a range of ways, more than simply by the victor of any given battle.

- Posted using BlogPress from my iPad

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