For Mike Broderick, there is no Plan B.
"You either believe in your Plan A or you don't do it," says Broderick, the 49-year-old co-founder and CEO of Turning Technologies, a Youngstown-based designer of audience-response measurement systems. "If I had a Plan B that I could've easily fallen back on, Turning Technologies wouldn't be here today."
Broderick's stalwart belief in his concept — an inexpensive hardware and software system designed to work with Microsoft's PowerPoint software to record and measure audience responses to a presentation — sustained him and his two partners through the cash-strapped years of their company.
Launched during the post-9/11 recession, Broderick and partners Mike Crosby and Don Arthurs funded the startup using their own money — Broderick even took out a second mortgage on his Canfield home and maxed out his credit cards. Today, the company is backed by Talisman Capital Partners, a $100 million Columbus-based private-equity firm, and expects to post more than $30 million in sales this year in 83 countries.
"You can't build a successful entrepreneurial organization from a mentality that says, 'I'll try this to see if it will work,'" Broderick says. "That's the difference between an entrepreneur and somebody who just starts a business. That's why 90 percent of businesses fail."
Broderick had spent 12 years developing and selling audience-response systems prior to Turning Technologies. At the time, the systems on the market were effective but required technical expertise, and each provider had its own proprietary software that often didn't cooperate with other applications. Plus, the systems were expensive. Equipment and software for one classroom unit from Broderick's former company sold for as much as $40,000, and were usually rented instead of purchased. Today, a Turning Technologies' hardware and software system, which requires no technical expertise, costs less than $1,000.
After 9/11, as companies across the country cancelled corporate travel and conferences, the orders for Broderick's former company disappeared.
"Every job we had scheduled through the end of the year was cancelled over night," says Broderick. "We really saw this as an opportunity to start over."
Turning Technologies' founders, who came from the same prior company, believed that the available technology — along with the benefits of off-shore manufacturing — had advanced to the point where a simpler, less expensive system could be built for purchase by schools and businesses rather than rented.
Turning Technologies' equipment works similarly to any other remote-control device. The ResponseCard receiver plugs into the computer through a USB port. The TurningPoint software integrates with PowerPoint and adds a toolbar to the application's interface. Up to 1,000 credit card-sized wireless keypads can be distributed to the audience who can simultaneously interact with the presentation by simply pointing and clicking.
One of the most difficult stages of the product development was building an inexpensive receiver unit. To also help reduce those production costs, Turning Technologies' hardware was manufactured overseas, first in South Korea, now in Thailand.
"With electronics today, it's pretty hard to remain competitive [if manufacturing domestically]," Broderick says. From 1990 to 2000, Turning Technologies' top competitor, which manufactures its units in the United States, built 200,000 systems. In just the past three years, Broderick's company built more than 1.5 million systems, with an additional 750,000 produced this year.
In the early years, finding funding to develop and sell the product was difficult. Broderick, who is a native of Columbiana, wanted to remain in the Youngstown area even though investors mostly ignored the Rust Belt city when it came to technology ventures. Luckily, Turning Technologies discovered the Youngstown Business Incubator (YBI) and contacted its president Jim Cossler.
"As soon as I read Turning Technologies' business plan, I knew it was going to be successful," Cossler says. "It was a perfect fit for what we do here."
The YBI provided Turning Technologies with free rent, as well as office furniture and equipment, and a deferred fee on its telephone and Internet access. All told, the incubator saved Turning Technologies approximately $280,000 for the years spent there until it was able to sign a lease at market value for space and equipment.
"Early on, it was a huge help to us," says Broderick, whose company formerly occupied one small office and now takes up the entire fourth floor of the YBI building in downtown Youngstown. "It allowed us to focus on product development and marketing."
Although early sales were strong — Turning Technologies had already sold systems to 10 large universities by 2003 — the turning point in Broderick's mind came at a Pittsburgh trade show in the fall of that year. He met an executive from publisher Thomson Learning (now Cengage Learning), which was looking to expand its product offerings with an audience-response system.
"Two weeks later, I was at its national offices in Belmont, Calif., presenting to the president of Thomson Higher Education," says Broderick. "At the end of the meeting, she pushed her chair back from the table and said, 'This is it. Let's do it.'"
A month later, Turning Technologies had 400 Thomson sales representatives helping sell the systems nationwide.
Landing that major customer, which controls nearly 25 percent of the higher-education publishing market, was a relief to Broderick, who admits to more than a few sleepless nights building his company. But that's what attracted him to launching Turning Technologies in the first place: the drive to succeed.
"There were points that I worried about [failing], without question, but I don't think I ever said it publicly," Broderick says. "But, personally, it's about seeing a challenge and opportunity and finding a way to meet it."
Today, Broderick's major issue is controlling his company's rapid international growth, rather than finding new customers. And since Inc. magazine listed Turning Technologies this year as the fastest-growing private software firm in the country and No. 18 fastest growing overall, not a day goes by where Broderick doesn't get a phone call from someone looking for an acquisition. He doesn't even have time to return all those calls.
"We're not looking [to be acquired]," says Broderick. "The reality is we're going to be worth a lot more next year and a lot more the year after that and so on. We don't see the growth slowing at all. We're just scratching the surface."