Load Systems International’s Dave Smith, a consummate entrepreneur, loves his job so much that to enjoy downtime he has to ‘will’ his brain not to think about the business. D.Ann Shiffler reports
Now I don't normally eat steak at lunch, but when in Rome... Well, actually I was in Houston, interviewing Dave Smith, president of Load Systems International, which designs, manufactures and distributes wireless weighing systems for cranes, lifting equipment and other custom applications.
The steak was great and the conversation about the company's evolution interesting and enlightening. Smith shared the story of the 11-year old start-up company that is finally making it big, thanks to innovative thinking and entrepreneurial perseverance.
LSI's crane indicator and wireless anti-two block products have gained widespread acceptance in the crane and rigging industry. Smith attributes the company's success, first and foremost, to discovering the right wireless technology.
"When you buy a system from LSI, you are investing in a market leading innovator," Smith says. "We invest heavily in R&D, and this is reflected in our product features and capabilities."
Once the wireless platform hurdle was overcome, it has been about bringing its products to the market and supporting the customer network, Smith says. Today LSI is enjoying yearly sales increase of up to 30 percent, a huge feat, especially in these challenging times.
Smith, like many in this industry, grew up in the crane business. His father sold cranes, including such brands as Grove and Koehring. Earlier in his career Smith sold attachments for heavy equipment. He started a bar code data collection company in mid 1980s and sold it in the early 1990s. He got started in the crane indicator business in 1992. And the rest is history.
How and when did you start LSI?
It was back in 1997 when the three of us, original founders of the company, met while working for a crane indicator manufacturer. A Sales Manager, a Production Manager, and an Electrical Engineer, we each had a diverse background but shared one common vision "simplifying the installation method of crane indicators. The solution? Getting rid of the cables. Doing the research, we quickly realized the advantages of making them wireless." And the rest as they say - is history.
Have you always been an entrepreneur?
I guess so. It's one of those things where you wake up in the morning and you sense that you can do it differently, more progressively, than the guy you are working for. When I sold attachments, I worked with a lot of entrepreneurs. You have it in your blood or you don't. Actually my wife may say it's a curse. But it's also a lot of fun.
My favorite games are Monopoly and Risk. That's sort of what an entrepreneur is. You have to be willing to take risks. And then a lot of days it's like sitting at a chess board. Do I move the pawn or the knight? Most of our decisions at LSI have been the right ones.
Also we have great people working for us - a strong team. You have to have a team who has their colored glasses on and that sees the world in different ways. I can't see everything from every direction or perspective. We have to rely on our key people to see what we don't see. We need input. You don't know that the guy in the far corner of the office may see that you are not seeing. You have to embrace his ideas and input.
What distinguishes LSI from its competitors in the crane and lifting market?
Our customers are our top priority and we make every effort to ensure their wants and needs are met. Staying on top of the latest technological advances, we focus on developing products that our customers actually want to buy versus products we want to sell. In fact, much of our R&D strategy originates from some sort of customer request. It is this kind of attention to detail and customer service that has allowed us to grow and to become so successful. And at the end of the day, our client's success is our success.
How has the product changed in 11 years?
It has definitely been an evolution, and we continue to evolve today. The first product we developed we were buying off-the-shelf radio chips. What we found was that this chip didn't always work on a crane. The crane boom can act as its own receptacle for the radio signal. This is especially true with lattice boom cranes. The lacings grab the signal and absorb it into the boom.
We are now on our third generation of radio chip and our 4th generation is around the corner. We engineer and build the radio chip in-house; this is why it works so well. The US Navy buys our radio technology. Ship's radar can interfere with hard-wire technology. We have developed a radio chip that so far is interference free. We have not run into an application that our technology will not work.
What are the major markets for LSI products?
I'd like to think that every industry out there has a use for at least one of our products. But if I had to choose, some of our major markets come from the construction industry, oil and gas sector, government, military, off shore and marine industries, gantry manufacturers, and virtually any other type of lifting apparatus. Many all of the major North American crane mainstream users and manufacturers have some sort of interface with LSI and with our current expansion efforts, we plan to continue to become a major player across the globe. We build wireless technologies, so the list of possible markets is limitless.
What is the innovation that has brought LSI the most success?
Innovation has brought us success. We couldn't have had this success without the right wireless technology. It is because of the protocol we use with digital addressing and direct sequence spread spectrum. Other companies are still using a frequency hopping spectrum, a 20-year-older technology. It takes more engineering to do what we've done but it's a much more robust technology. Actually, we had to do twice the engineering work to do the direct sequencing and it requires a lot more processing and more math logic.
2009 has been a tough year for the industry? How has LSI fared?
2009 was indeed a challenging period for our industry, no question. Keeping informed of the market trends, one would hear of contracts being canceled, projects coming to a halt, some operations even shutting down all together.
Fortunately, our company philosophy has always led us to take on a more proactive approach, uncovering opportunities even during the darkest of times. Don't get me wrong, we adjusted our business practices like everyone else, we were just fortunate enough to have the vision, the know-how, and the financial backing to make the appropriate decisions that allowed us to continue to grow and expand our business.
So much so that we managed to close out 2009 with an increased business upwards of 25 percent over the previous year and have consistently grown 30 percent each year prior. It's like a waltz and we've got it down to a fine art. We know the market. We have a strong team and we continue to hit our budgets.
We did see a downturn in April but then an upswing in the fall. October 2009 was our best month ever! We believe that the upswing was due in part to being able to provide solutions that customers see as a value added and necessary towards their own success.
How do you balance innovation/engineering and sales?
We are in a high liability business. We need to weigh risk. For us it means sitting down every six months to analyze market demand. Where can we best put our research and development dollars? So far, we've been able to keep it all in balance.
What are you most proud of in terms of the business?
I'm most proud of the number of mouths that we feed. It's a cool thing to see the growth of the business. I'm proud of our people. Our employees are why LSI is what it is today.
What keeps you engaged in this business?
This is a business of big boy toys. We have some of the greatest customers you could want. They are demanding and know what they want. And there's nothing but opportunity when you walk in their door, and it's like that all day, every day. That's what I like. You can't beat crane people. They are down to earth and direct. It's a great industry to work in and there's never enough time in the day to do all you need to do.
Why are your customers buying LSI products?
At the end of the day, they are looking for a solution that will save them time and money. With our technology we can support 99 percent of our products over the phone. We have a solution that ultimately, in the long-term life cycle, will save money and offer an advanced set of features compared to others in the market.
What is your business philosophy?
Not to fear technology, but to embrace its capabilities as a measure to improve our customers' productivity and provide them with long-term value added tangible benefits from the use of our technology.
In the end our customers provide us with the revenue to grow the business, and we are here to ensure that they receive value for each dollar spent with LSI. As we embrace new technology, we have in the past and will in the future face hurdles to bring this technology to the market, but we are steadfast in our commitment to lead our technology sector.
Do you work all the time? Do you ever get any downtime?
Yes and No. I'm constantly working on the next best thing that will revolutionize our business. But I do take time to be with my family. I have a boat and we enjoy spending as much leisure time as we can on the lake. Being on the water is extremely calm and relaxing to me, but I'm not going to lie, I still have to will my brain to stop thinking about the business.