On Jan. 27, 2015, Startech.com announced plans to expand and hire 75 people. Here's my Business London profile of the company from 2010 when it employed about 140 people.
StarTech makes connections around the world
Congratulations. As IT manager, you’ve done the research and chosen a brand new computer system for your office – new servers, giant flat-screen monitors and software that syncs with Blackberrys being used by your sales staff.
A week after installation, the system is a big hit, surpassing anything you dared hope for. Then the president of your company comes walking out of the boardroom with a problem.
The high-def projector, purchased for five figures last year, won’t play the PowerPoint presentation from his laptop. He has seven key buyers in there, and the best he can do is ask everyone to crowd around his laptop screen to see the presentation he spent all month putting together.
“You’re the IT guy,” he says in frustration. “Fix it.”
Every day, around the world, there are thousands of people trying desperately to connect a new piece of technology with an old piece of technology, the latest and greatest with what, not so long ago, was also the latest and greatest.
Sometimes they can do it, but often they cannot. They download new drivers, call the help centre and reboot until their index fingers start to cramp. “It’s supposed to work! What’s wrong with this thing? Aarrrrrrrgh!”
If you think about the number of companies pumping out new technology every week, marketing to a niche here and a niche there, setting their own performance parameters and creating new operating systems – if you think about all that, it’s really a wonder so many machines talk to and work with each other.
I can take my Sony Walkman MP3 player, plug it into my Dell laptop, using a generic USB cable, fire up a free version of Media Monkey operating in Windows 7, and download a podcast that originally was destined for Apple’s iTunes store. Then I can plug that Walkman into an iRock adapter, plugged into the lighter socket of my car, tune the radio to the same frequency and listen to the Tony Kornheiser Show, broadcast locally in Washington, D.C, while tooling around London, Ontario, taking calls on a Google-based, HTC-manufactured Droid phone, on the Virgin Mobile network (always pulling over to use the phone, of course).
So, ya, there’s an awful lot of technology that works great together, against all odds. And generally, it seems to be getting better. Plug-and-play has moved from a hurtful taunt to something approaching reality.
However, there’s a large building on Oxford Street East, out near the airport, that’s testament to the fact that lots of technologies still don’t connect very well with each other, no matter how many patches and drivers are brought to bear on the problem.
It’s the home of StarTech.com, where 105 of the company’s workforce of 140 go to work every day. For 25 years, StarTech has made money by helping people connect things that are difficult to connect. For 25 years, IT managers and their ilk at companies large and small have turned to StarTech for a cable or adapter or splitter or switch to make their technology work together.
“There’s always new technology with new parts,” says Paul Seed, a co-founder of the business. “Connectors are needed in the IT world; it’s that simple.”
Seed and his co-founder, Ken Kalopsis, began working together when they were students at UWO, members of Delta Epsilon, solving another technology challenge that students and others faced on weekends.
It seems quaint now, but the duo’s first business was something called Video Van. “We rented VCRs to people so they could watch movies,” Seed recalls.
In the early 80s, VCRs were still a novelty in many homes, too expensive for most students to buy. Seed and Kalopsis drove around in Seed’s blue, 1972 LTD and delivered the bulky machines, primarily to students.
At its peak, the business owned about 100 machines and had them in circulation all across the city. By the middle of the decade, however, the pair realized their days were numbered.
“It was revolutionary at the time, but it wasn’t a scalable business,” Kalopsis recalls. “We would have needed a lot of capital because the market was splitting and going in two distinct directions – big stores or convenience stores. We weren’t either, and it was time to move on.”
StarTech was their next venture, and 25 years later it’s clear they made the right choice.
That wasn’t obvious initially. Back then, Seed and Kalopsis simply chose something that interested them and which they figured had the potential to grow.
“We wanted to get involved in a growing market, but instead of going with a high-volume, commodity-based model, we decided to focus on specialized products. High volume was very capital intensive,” Kalopsis says.
They also acted on a lesson they had learned in the VCR game. They had no interest in hitching their fortunes to a specific technology that could very well be obsolete in five years or less. Instead, they diversified and began selling parts that connected technology, whether it was brand new and revolutionary or a legacy technology, as old gizmos are euphemistically known.
By focusing on specialty products and covering new and old technology, they built what essentially was a recession-proof business. In good times, companies buy new technology and need to connect it to their existing platforms. In bad times, companies squeeze more time out of their old technology and need help making it work with newer technology all around them.
It all started rather humbly. The company’s first product was a keyboard dust cover. They sold 85,000 of those in their best year. Then they developed an anti-static, anti-glare cover for CRT monitors, which – remember -- delivered plenty of shocks and glare in their day. StarTech grew incrementally, adding products as markets emerged, importing from Taiwan and building a reputation as the place to go for hard-to-find connectors and parts.
“There was no real breakthrough moment,” Seed says, although he does remember an emergency call from a U.S. company with 40,000 computers, all useless because of a missing connector.
“We found the piece they needed. If we can’t find it, we design it. You can buy a six-foot USB cable anywhere. We have the six-inch, right angle cable that you can’t find anywhere else.”
This year, StarTech expects revenue growth of about 30 per cent. Two years ago, when the world teetered on the edge of economic ruin, the company still enjoyed 5 per cent growth, something almost any business would have taken quite happily.
The two partners own the business 50/50 and split the duties clearly: Seed, who is president and CEO, handles product management and internal operations while Kalopsis, who is vice-president, handles sales and customer relations. The duties have changed back and forth over the years, but for the last decade or so, when the company has experienced its greatest growth and success, that’s the way they have divvied it up.
“We’re fortunate to have a good relationship still and complementary skills,” says Seed, the quieter of the two.
Kalopsis, who once was national president of the Reform Party and then its offspring, the Canadian Alliance, is more of a talker. He’s still very interested in politics, but his official role now is as supporter of his wife, Nancy Branscombe. She was reelected to city council in ward 6 last month and once ran for federal office under the Canadian Alliance banner while living in Peterborough.
Kalopsis and Seed travel extensively to trade shows across North America and Europe. The majority of sales are still in the U.S., through a network of value-added retailers, many of whom sell through catalogues or websites. The market is IT professionals looking for specialty connectors.
A dozen years ago, StarTech moved its U.S. warehouse from Port Huron to just outside Columbus, Ohio. It now serves the American market from a 56,000-square-foot warehouse there.
The company’s first venture into Europe was the U.K., six years ago. In the last year, it has expanded into Spain and the Netherlands. In the next year, it has plans to expand into France, Belgium and Portugal. The biggest European market, Germany, is a bigger challenge and a goal for down the road.
To mark 25 years in business, StarTech is working on a new look, with a new logo. But it isn’t changing the nature of what it has been. When pushed to reflect on a quarter century in business, Seed talks about the people who work at his company, whom he credits for its success.
“It’s a team of really good people.”
There must be something to that because StarTech last month was named one of the country’s 50 best small or medium-sized employers, for the second time in three years. The list is compiled by the Queen’s School of Business and Hewitt Associates and relies on anonymous employee surveys to rank employers.
Not bad for two frat boys who used to rent VCRs to student partiers and built a business on a keyboard dust cover.