- change ups
Brandmotion targets auto 'real estate'
Varick's four-year-old company, Brandmotion, designs and manufactures aftermarket auto products that look like they were installed on the factory floor. Typical aftermarket electronic products have exposed wires, cables or cords, whereas Brandmotion systems conceal the wires and basically plug right into place.
Varick was a new business development manager for General Motors for a decade, worked a couple of years as an engineering consultant in Boston, and then took a position with Johnson Controls, where he spent six years as the innovation director of seating and the marketing strategy director at the company's tech center in Holland.
"I really joined Johnson Controls to help them build their aftermarket business," Varick recalled. "That's how I kind of got into the whole West Michigan landscape."
Varick started Brandmotion in 2004 to sell the integrated audio, navigation and wireless phone systems he invented for cars and trucks to the aftermarket. In order to get his company off the ground, he first had to find a "landing spot" — somewhere with OEM plant shipment codes.
"You can't just walk up to Ford and say, 'I'm going to start shipping to you tomorrow," Varick explained. "Cascade Engineering had the Ford, GM and Chrysler shipping codes that we needed, so Fred Keller made a good partner. He always likes to invest in new ideas for the aftermarket business."
Keller, president of Cascade Engineering, became a major investor in Brandmotion. He and Varick originally met when Varick was working in Switzerland for GM. Keller was in Switzerland working on a joint venture, and he and Varick hit it off, Varick recalled; eight years later he approached Keller to see if he would be interested in investing in his start-up.
"Jeff's proposal to 'attach' to Cascade Engineering's centralized processes fit nicely with our strategy to diversify into automotive aftermarket products," Keller said. "We were able to own some of the 'channel to market,' and then to manufacture products for that channel. We are very interested in this kind of proposition that allows us to leverage our considerable product development and manufacturing expertise while developing channels to market."
Brandmotion enjoyed a running start, but then encountered a snag, which Varick said he hit because he was spending most of his time doing what he enjoyed most — inventing new products — but very little time trying to sell them. Keller became concerned that Brandmotion was on the verge of failure and considered pulling out of the business. Varick took to touring the country and calling on potential customers and was able to turn the business around.
Nearly all ventures run into major difficulties at some point, Keller said, and the people doing the funding need to be very clear about their objectives and hold the organization accountable.
"I believe that is what we did, and as a result, Jeff came up with some new strategies that have promise today," Keller remarked. "Jeff and Brandmotion are on track to continue to grow in retail sales online and continue with innovative product development. Jeff is gifted at making connections between innovative ideas and the needs of the marketplace. I think that the future looks quite good."
Brandmotion products are sold nationwide through retail stores, as well as directly to consumers via its Web site, www.brandmotion.com. Even though car sales are slow, Brandmotion products are selling. Retail sales jumped 240 percent last year over 2007, and the company surpassed $1 million in sales. Varick said 2009 sales will likely be 50 percent higher than 2008. Brandmotion also does custom development projects for other companies.
"We are truly innovation for hire," he added.
Samia Brown, marketing director for Cascade Engineering, said several small companies operate under the umbrella of Cascade Engineering, some working out of Cascade's Innovation Center, as Brandmotion does, and others working out of their own locations. Keller has some sort of relationship with all of them, whether it be an equity investment, a joint venture or a strategic partnership, she said. Those businesses can access a number of consulting services from Cascade Engineering for a fee, such as legal, finance or marketing services.
"It's an a la carte model that has worked really well for me," Varick said. "I just pay for as many services as I need," Varick said. "I don't get saddled with the cost of paying the salary and benefits for a lot of full-time employees."
Varick attributes Brandmotion's success in large part to Keller's incubation model. What motivates Keller to offer assistance, and in some cases financial backing, to fledgling entrepreneurs? A couple of things, Keller said.
"I have observed over the years that as organizations grow, they can become stagnant and less vibrant. By working with entrepreneurs, we are constantly challenging our culture to remain nimble and agile," Keller said. "We call it 'competent, creative and quick.' These are the very traits that most organizations appreciate about Cascade.
"As a strategy, Cascade is interested in diversification. We have a strong backbone of services from engineering, quality, human resources, IT, global sourcing and manufacturing that is second to none. By providing services to other business units, we have learned how to be truly 'consultants' to our many internal clients. This makes the services sharper and the businesses more successful.
"A final observation is that I just enjoy making new businesses grow and prosper. Some have called me a 'serial entrepreneur.' I don't know if that is good or bad, but it sure is fun!"
Next up for Varick is the June launch of the "first all-encompassing aftermarket hands-free calling system" with emergency dispatch and live concierge services. That's being brought to market through a joint partnership with GuidePoint Systems of Pontiac. GuidePoint makes a very successful vehicle tracking system that integrates global positioning satellites, advanced wireless technology, the Internet and 24-hour-a-day response centers.
Varick is working on the launch with Brian Edwards, GuidePoint vice president of corporate development. Keller introduced them. Edwards co-founded and helped build Lambert Edwards & Associates public relations firm in Grand Rapids and has seeded several other businesses.