Retail, Small Business & Startups, and Technology

Entrepreneurs’ phone repair business expansion rings true

Owners of Genius now have retail and distribution locations across the country.

June 24, 2016
| By Pat Evans |
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After initially setting up shop in a living room, Genius Phone Repair now operates three divisions with 160 employees and 17 corporate-owned stores. Courtesy Genius Phone Repair

As Jordan Notenbaum and Garry VonMyhr were getting Genius Phone Repair off the ground, there would sometimes be four customers in Notenbaum’s living room watching a Detroit Tigers game as they waited for their phones to be fixed.

“We did well out of his house,” VonMyhr said. “Customers would wait, but it was a single-guy house, and it was a mess constantly.”

The pair knew they needed a retail location in 2011 and began searching, while also inviting fellow 2006 Wyoming Park High School graduate Steve Barnes into the ownership group.

Now, the one company has become three, and there are 160 employees and 17 corporate-owned Genius stores in Michigan and Indiana. Once repairing 50 phones a week, the companies — Genius, plus a K-12 school business and a wholesale company for phone parts —now repair closer to 10,000 electronic items a month, according to VonMyhr.

When the initial retail store opened in July 2011, the owners were concerned with just paying the bills.

“We weren’t paying ourselves anything,” said VonMyhr, now the company’s president and CEO. “We’d have to pay rent and made about $4,000 in sales doing a few repairs a day.”

The roots of Genius were established in 2008 at Grand Valley State University, when Notenbaum and another partner began repairing phones as students. At the time the popular smartphones just being introduced were Blackberrys. Soon after, the first iPhone 2G was released and really kicked off the smartphone craze, VonMyhr said.

VonMyhr said he saw an opportunity despite knowing almost nothing about technology. But he knew mail-in repairs wouldn’t work for smartphones, as customers wouldn’t want to be without them for even a few hours.

He purchased 40 percent of the company for $2,000 from Notenbaum’s co-founder and immediately began calling potential customer bases and diving into the business development side of Genius.

“I called every customer I could think of. I knew nothing about smartphones, but I love business, and I was going to drive revenue,” VonMyhr said. “I knew that soon everyone would have smartphones, and if we could build a customer base, we’d be OK.”

VonMyhr and Notenbaum graduated from GVSU and began working full-time jobs and working in the evenings out of Notenbaum’s house. They started seeing 15 customers a week through the front door with scheduled appointments.

Common repairs included broken screens and water damage, which is difficult to fix, VonMhyr said.

The pair called Barnes — while he was delivering on a pizza route — to be the future retail location manager, and while they couldn’t offer him a salary, they offered him ownership. All he said was, “This is going to be great,” VonMyhr said.

A retail location near the Rivertown Crossings Mall gave them a $1,000-a-month deal, but the owners still needed to develop an inventory, procure a sign and furnish the store.

“We went to a couple of banks, but three kids who graduated in 2010 with no experience, they weren’t willing to give us a dime,” VonMyhr said.

VonMyhr’s father ended up loaning the company $9,000, half of which went toward the biggest sign they could buy, he said.

Initially, with the budget tight after the sign purchase, the company couldn’t buy a dividing wall to keep patrons from wandering back from the waiting room into the repair areas, but VonMyhr said they worked to fix that issue quickly.

To help drive business, they took doughnuts and pizzas to mobile phone carrier companies.

“Those stores don’t really fix many phones at all,” VonMyhr said. “They’d send quite a few customers to us, and quickly things took off.”

There also weren’t many competitors in West Michigan, VonMyhr said, so customers would come from Holland, Muskegon and Kalamazoo. At the time of the company’s launch, VonMyhr said there were approximately 3,000 places in the United States to get a phone fixed. Today, he said, there are 15,000-20,000.

A local competitor, CallTech, came into the store one day hoping to find where Genius had its giant sign made as it was preparing to open a second store.

“I was furious. I remember thinking, ‘It’s go time, we have to get rolling,’” VonMyhr said. “We opened a second store on Knapps Corner, and then in 2012, on Alpine (Avenue), and then Muskegon were our third and fourth stores.

“We started cranking. It was an exciting time. It was kind of a land grab.”

Genius soon opened locations in East Lansing and Cascade Township, and then a partner helped open a store in Indiana.

Genius acquired CellTech a few years later.

As Genius kept repairing phones, the owners realized another market opportunity. Most of the parts the company would buy were from larger companies because the products were made overseas.

VonMyhr said repair companies generally weren’t good at sourcing products, and minimums had to be made in purchasing, so the Genius owners launched Mobile Defenders to help supply smaller repair companies with parts.

Mobile Defenders now has warehouses in Grandville and Fresno, California.

“Other suppliers didn’t seem to understand the industry,” he said. “We were in a unique position in that we were working in it and gaining knowledge. We were able to vet the quality and sell these parts to our competitors.”

Mobile Defenders took off, and it now does four times as much business as the Genius division, VonMyhr said.

At about the same time the company opened its Fresno distribution center, the third leg launched to help repair K-12 computers as schools continue to move technology into the classroom.

Schools typically experience a 25 percent breakage rate, so for a district such as Zeeland Public Schools, one of the company’s first clients, that means 1,300 repairs in a year. With the average computer repair costing $100 to $120, an insurance program charging parents $50 with no deductible seemed logical, VonMyhr said.

This year, the company insures approximately 60,000 units across the country, and several more school districts use just repair services, VanMyhr said.

The three companies now have employees in Michigan, Indiana, California and Texas. A repair facility in Dallas should open soon, he said.

“It’s been a crazy journey as the industry has grown and provided us with great opportunities,” VonMyhr said. “We’ve been benefactors of a hot industry, and we keep trying to evolve because it’s the tech industry, so if we’re not growing, we’re dying.

“Phones might not be breakable in four years.”

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