Techopia on Tour video: Lessons from Ross Video

Techopia was back on the road this week, dropping in on video production technology firm Ross Video.

The company makes the advanced gear that’s needed to turn a live event into a televised production, enhanced with special effects such as instant replay, on-screen scoreboard and other graphics such as a superimposed first-down line during football games.

To understand the company’s reach, one just needs to visit its Wall of Hats that holds the official headgear of the many professional sports teams that Ross Video counts among its clients.

The company has revenues approaching the $200-million mark and some 640 employees, about one-third of whom are in Ottawa.

Using a smartphone analogy, CEO David Ross compared his company’s success to Apple’s dominance over BlackBerry. While the Waterloo-based firm tried to find success by constantly rolling out better and better handsets, Apple developed an ecosystem of products – phones, tablets, laptops and now watches – that are designed to work with one another.

Similarly, Ross Video has a suite of some 18 core products that create synergies for customers when they’re combined.

It also gives the company more touch points with its clients, who are now buying something new from Ross Video every six months or so, rather than every few years.

That was one of several nuggets of knowledge Mr. Ross shared with guests this week during a tour of the company’s facilities in Nepean.

Here are some of the other lessons:

An outsider’s perspective can add discipline to decision-making

Up until the mid-1990s, the company’s board of directors consisted of Mr. Ross’s mom and dad, with meetings held around the kitchen table.

When David bought the company, he knew he needed to find a forum where he and his father could work professionally and that ensured Ross Video was running like clockwork.

Adding additional independent directors was part of the solution. It helped ensure that the company’s budget was defendable and forced the executives to think more critically about its R&D direction, for example.

“It totally changed the conversation,” Mr. Ross said.

It also added a new pace to business planning.

Previously, “sometimes our budget was set two months into the year. All of a sudden, it was on time,” he said.

Enter new markets with feet on the ground

To do business in other countries, companies typically need to have business partners.

The problem is that a partner distributing your product is typically also distributing products of three to 100 other companies, Mr. Ross said.

You need to win the respect and mindshare of those business partners, which is difficult to do from Canada, he argued.

“You have to start putting people into those countries who are there, speak the language, understand the culture and are seen as a local,” he said.

More importantly, one needs to work hand-in-hand with business partners by calling them regularly, asking about leads and offering to jointly visit customers, to continue moving the business forward.

‘Conservative’ approach to double-digit growth

Top-line sales are growing at about 18 per cent annually. While that would be an aggressive pace for many firms, Mr. Ross said the firm has been “quite conservative in the way we’ve grown.”

Ross Video is a products company, which allowed it to fund its growth internally. It generates cash every year and has allowed its owners to avoid selling large equity stakes to finance expansions.

Mr. Ross contrasts that with the increasingly popular software-as-a-service model, which offers the appearance of a recurring revenue stream.

“Many people forget the fact that you’re going to lose $20 million a year for the next five years in a row before you have any money coming in,” he says. “Maybe the venture capitalists and private equity [investors] love that trailing revenue stream. But [company founders] have to sell three-quarters of their company to even start it.”