I Was Too Young To Drive But Started My Business Anyway: Now We're Approaching $200M/Year
Hello! Who are you and what business did you start?🔗
My name is Lawrence O'Connor, aka 'OWC Larry.' I am the founder and CEO of OWC (Other World Computing, Inc.).
OWC has been upgrading and enabling greater longevity and capability from computers and other technology our customers depend on for over three decades. We aren't just a direct reseller. OWC engineers and manufactures these solutions as well, including leading-edge software applications that enable even greater functionality. We are here for our customers and because of our customers, which is reflected in the products we develop.
Our hardware solutions include memory, high-performance SSDs, port expansion docks, a wide range of external storage solutions that serve everything from backup to audio/video/photography needs, and even major motion picture production. The software includes Mac & Windows RAID management, Mac/PC drive compatibility support, and tools for system health monitoring, data ingest, and file management for both computers and mobile devices. We continue to experience solid year-over-year growth and have expanded internationally over the last five years with major operations in Europe and Asia in addition to the USA.
Our CAGR over the past 33yrs is 43.78% (average growth rate since inception). It was 18.4% in the most recently completed year 2019 vs 2020 with just over 148 million revenue in 2020.
What's your backstory and how did you come up with the idea?🔗
I grew up on a farm in the country outside of Marengo, IL, which had a population of about five thousand. I was fortunate that my dad was an early adopter. He is also an entrepreneur and used a Telex machine and a TRS-80 with the giant floppy disks way back when. It was a total fluke when my parents won an Atari 400XL computer with a cassette deck (for program storage) at an event in 1981 when I was seven. They gave this computer to me, and my mom made sure it was only used for learning. Learning at that time meant programming languages.
In another fluke, not too long after I'd been advancing on coding with that Atari, I overheard my dad needing a function in his business software added. The software then was open and easy to modify, and I told him I thought I could do it. He gave me a shot, and I got it done. Then, my reward was to be given a data entry job, not precisely applying my new skills then. Still, the work ethic I learned at a young age working with and seeing my dad busting his tail in our home 'barn' office, as well around the house and our pasture/land, etc. - that was priceless. By 1988, my dad's office had moved to town, and the old office in the barn became my space. While I was still doing data entry work for my dad, I had other ideas.
The first involved reinking printer ribbons, which was messy, but the results were good and were a win for my own printing needs and clients (including my dad's business) in Woodstock, IL. Being from a relatively rural area there was a limited client base in the area I could practically support being too young to have a car. I went to school in Woodstock, and the clients were effectively within walking distance of the school and my dad's office. By this time, I had an Apple IIGS computer I'd saved for and wanted to do all sorts of upgrades to it, which would drive things to a whole new place.
I paid for at least one upgrade at our 'local' Apple shop that was about 80 minutes round trip from home. In addition to requiring parents for that trip, it also meant taking everything apart and dropping the system off for a few days for that upgrade to be complete. I had taken apart the Apple IIGS and was familiar with its inner workings.
Don’t dismiss people that don’t have a formal education - there are amazing, teachable, natively wise individuals that can grow with you and achieve greatness
I also learned that the memory chips I gave up three days to have installed took less than 5 minutes to remove and reinstall. Although the Apple magazines I subscribed to didn't have part number details, within walking distance of my school was' The News Depot,' which happened to have about every print publication known, including the then huge, thick, tabloid-size Computer Shopper magazine. Flipping through one, I recognized the part numbers on chips I'd seen in my Apple. Not only that, if I was right - I could buy the needed components for a fraction of what both Apple dealers sold them for, as well as what prices were in the Apple magazines I read. I gave it a shot and eureka; it was time to crank.
Being able to do an upgrade in the comfort of your home or office was exceptionally more convenient than the time to get to and from a computer shop twice that you could do this upgrade in less time than it took to fill out paperwork at a shop. Even better, in addition to souping up my own Apple, I documented the upgrade process to pull back that curtain and began selling memory using online forums. The AOL Classified section (which was great for the first few years) and by 1989 would even start advertising in those Apple pubs. I remember one of my first customers asking to pay for installation because they were worried about breaking a chip. I noted that the entire memory set cost less than it would be for me to come on-site and not a big deal to replace if such happened. Supporting and walking through with customers that needed it was part of the service.
From there, I rented my first office space in 1990. For more than our first decade, most of everyone I hired was a computer enthusiast, and OWC was a unique employer in the small town of Woodstock that could pursue such. We expanded to external drives, later processor upgrades, and continued to be driven by customers that needed better solutions—solutions OWC could design and make a go of The solutions we created were as much for our wants of better product options for our customers. We built with that in mind and provided real solutions, not just fluffy specs.
Take us through the process of starting the business.🔗
The first few years, the products we offered were mainly about testing, kitting, and assembly. It was about knowing how to provide the right parts for the different systems and maintaining in-house testing to ensure the quality and reliability of those solutions. Most of our competition just flipped goods. Another lesson learned was that the customer doesn't care (and shouldn't need to know or care) about why something didn't happen or work the way expected. Depending on a third party for testing, assembly, even shipping can be a significant risk. You are promising to deliver the right product and by a specific time. If it arrives late or defective, you can't blame anyone other than yourself. We became a trusted source because we didn't risk someone else not doing what was needed.
A solid test program kept such issues limited to within our walls vs. affecting customers. Even behind quality control, we do extensive testing to ensure compatibility and the proper specifications for what can be expected of every product is accurate. Technology continues to get more and more complicated both on the hardware and OS side. We don't want our customers to be paid beta testers. We drive to have solutions that plug, play, and just work. That's how everything should be, and the development programs we run are explicitly built to drive those outcomes.
Probably the very first solution we engineered would be our first FireWire external drives around the year 2000. We also did ZIF upgrades before, but this was more of a custom solution. This product came to be due to a lack of consistency in the solutions other significant brands were offering that we then had resold. Our customers made their needs clear, and we researched the right way to meet those needs. Our customers knew what they needed, and the first OWC branded FireWire drives advertised the specifications that differentiated ours from the inconsistent competition.
We built it, and they came, even though we didn't fully recognize the significance of our solutions for the audio/video/photography, general data customers at the time. It was about giving people a real solution, open with the chipset and drives we built with, and actual specifications they could count on vs. the typical interface fluff info. This legacy lives on today in our broad array of Thunderbolt, USB, and Enterprise rack solutions - really in all our solutions.
Describe the process of launching the business.🔗
Launching the business was all about getting the word out. The 'reinking' biz was walking around town, offering a free sample reink' and loading up customers. It was an excellent experience to learn to communicate and interact professionally. I'd had years of experience with my dad and, again, priceless. But doing is different from observing and is the most excellent way to learn anything. As I went into the computer technology space, it was all about getting on the different BBS (electronic Bulletin Board Systems) to post text ads, a little CompuServe, and found great initial success on the early AOL (America Online) mall classifieds. Any place and every place that was free or nearly free, I put my ads up that touted our upgrades and the how-to support.
Due to the premium resellers in the Apple space having gotten used to charging (like a 3-4X over reasonable price), there was lots of room to be competitive to the degree that made us worth giving a shot. The quality of what we delivered and the support and service that came with it made word of mouth our most significant accelerant. I didn't have my first employees until 1990 but always referred to us, and us as OWC was technically its entity. It wasn't long before I had many customers and, between OWC and school demands, I resigned from my dad's company.
At the time, the entire company was funded by a Citibank AA credit card. I had the lucky convenience of my first name and middle initial being the same as my dad's. Computer records were not as thorough back then, and it's possible they misread the year for my date of birth when they issued the card, although I was a few years under 18. My dad was aware of the card I'd received and ultimately said OKAY, was supportive, and also said - that card gets paid off every month - no credit card debt. To this day, that advice is one of the best things of many he ingrained in me. This credit card also provided travel miles that could be used for both airfare and hotels. In addition to supporting the inventory turnover and making magazine ad payments convenient, the points also are what paid for my team and me to do our first Applefest trade shows in 1990 and onward. While I would ultimately get a bank loan later, what is now an international operation got going with the points and line of credit on just a credit card.
Everything in this life is learned by doing. I hated making mistakes and letting any customer down. You learn early in life that intentions aren't actions, and you need to adjust your commitments to what you can do well and deliver best. You get one chance to have a customer for life or someone that will never come back. You have one chance to create loyalty and positive word of mouth. Being properly capitalized goes a very long way too. By 1998 or so, OWC had grown past 7 million in annual revenue but was very capital limited.
The banks in Woodstock didn't understand my business and wouldn't loan to the inventory and Accounts Receivable levels we maintained. I will never forget when a banker from Chicago walked in while looking for business accounts, heard me out, looked at our physical inventory - reviewed our A/R, and it was about two weeks later I had over double the working capital available. From that point on, OWC exploded with growth. And sleepless nights, worrying about having the funds needed for payroll, inventory, etc. - were in the past. At that time, OWC purchased just about everything on COD. Further, it used to take 3-5 days for credit card billing to be posted to the bank account by having the funds needed to maintain operations and inventory during high growth with those factors.
Other aspects learned and observed come down to ethics and accounting. If OWC was going to fail, the highest probability time was between 1995 and 1996. I did all the accounting myself until mid-1996, and as the company grew and our customer base grew, a brand-new challenge emerged that I'd not experienced when I pretty much knew every customer, we sold to Credit Card fraud. Credit card fraud came very close to bankrupting OWC. If I could do it over again, I'd have hired the right kind of accounting staff much sooner, so that time would have been there to nip that new trend much faster than I did while trying to do everything else.
I was also naive. I had no idea of the kind of dishonesty that existed in the world and was unprepared for the issue of fraud. With help from my dad, I hired a fantastic accounting manager who not only helped me clean up everything but took a huge load off my plate so I could focus on the things that made OWC grow. This entire experience also led me to design fraud prevention software that was used on our website.
It's funny that this is an industry we innovated in, but only for our operation and wouldn't be the only example. Whether our method for fraud screening, return policy, etc. All our processes were intended to make sure the sliver out there that were not the customers we wanted or were fraud attempts would not get in the way and negatively impact our experience customers. I had seen that in many businesses where the bar was set by the worst as opposed to working to protect the business without treating your real customers as if they were criminals.
Early days:
Since launch, what has worked to attract and retain customers?🔗
Although today we are building an aggressive outbound sales capability, OWC from the beginning and still today is largely an outbound marketing force that brings customers into our website, channel partners, and inside sales team.
It's certainly evolved over the years from a substantial contribution from both print publications, trade shows, our website/SEO (Search Engine Optimization), and online advertisements to today, where social media, online ads/reviews, and our website are the primary drivers. Strong online SEO from good, accurate content has been a massive part of no link farms, just actual content that answers people's questions.
Your problems can't be your customer's problems in terms of expectations set and then missed.
Here are some more concrete ways we’ve grown the business:
How To Content
For over two decades, we have produced free, online, how-to videos that anyone can use. Give people reasons to come and learn about your company and what you offer. You don't have to force someone vs. to allow them to benefit from your knowledge, hoping they will become a customer.
Earning the trust and a strong word-of-mouth presence is priceless. The model has always been about customers for life, OWC team for life. Don't oversell. Support the real needs and earn the trust that will bring that customer back time and time again.
Press Releases
Starting in 2004, press releases had a considerable impact; there is no better way to introduce new products and services than a well-supported press release. Support means having your website ready with content that the release links to support reviewers who request those new items following a release.
And writing it with the company culture, real information, and the right words that bolster the SEO aligning with your site. It's about being real, not fluffy. Writing smart, not just trying to hit keywords - having accurate content that people want to read and thus helps propagate.
In addition to building the company's exposure, solid press releases also build your authority and lead to press opportunities above and beyond just the topics in various releases.
Customer Retention
Retaining customers is easy when you lead by example and build a team with passion and care for everyone, allowing you to be your customer. It's not about the size of the order. It's about making sure you are the go-to forever for each customer and those they will refer to you.
You never know what $50 order will lead to thousands of dollars or more in ongoing orders, customer referrals, etc. Knocking a customer's socks off on a small order builds trust and confidence no less than when it's a large order. Every customer is essential. Now, the customer is not always right - but always try to make it suitable for every customer regardless.
I'd add one other piece in here - just like the buck stops with you, every employee's action is ultimately cast as a reflection on you and your company - the same goes for general challenges in supply, delivery, etc. Although there is more forgiveness when a delivery carrier messes up, customers still look to you if you've allowed that carrier to be an option they can select - free or paid. Further, the most frustrating thing is when a supplier lets you down. Still, you learn that buffering those kinds of issues is essential as the customer only sees that you didn't deliver to them - it doesn't matter what you've busted your tail for in the backend. It comes down to what you said you'd do if you end up not being able to.
Your problems can't be your customer's problems in terms of expectations set and then missed. Always set yourself up to have high customer expectations and trust while still under-promise and over-deliver. I learned decades ago when analyzing customer feedback data that even being perfect to a commitment advertised can lead to scoring that isn't perfect. It's a fine line, but there is little room to over-deliver, delivery is faster - exceeding expectations is where you see the perfect 10s.
OWC Woodstock Campus:
How are you doing today and what does the future look like?🔗
Today OWC continues to enjoy double-digit annual growth, and I expect to grow past 200 million in annual revenue within the next 1-2 years.
OWC is also exceptionally well-diversified, where different economic conditions that reduce one category's revenue tend to have the opposite effect on another. The same is true with our customer base, from home, SOHO to fortune 100, and primary production houses. Our solutions and upgrades address needs across a broad scope, and this has allowed us to not just weather but even have strong growth through several economic downturns over the past decades.
We also have a tremendous opportunity in our existing product categories. Different divisions of OWC could quickly grow to alone be as large as the entire operation is today. Getting the word out and reaching new audiences who don't know us is a number one opportunity and priority. Continuing to build and grow our team to engage the best in service is another critical aspect. One of our most exciting, growing categories is software. While our software was built to enhance the experience with and capabilities of OWC hardware, it now goes well beyond just this. As we begin to take our software into SaaS and Cloud arenas, we are growing the number of customers that can benefit from these great applications and generating more significant revenue from what has been an extensive and ongoing IP investment.
Just as initially, OWC is a profitable company that provides substantial benefits to customers and employees. I never had the 'luxury' of OWC being able to operate at a loss. OWC is a company that has continually reinvested to support efficient growth and go forward. It is possible we could have grown faster, bigger, better with a Venture Capital/PE firm investment years ago… or we could have suffered the same fate as companies like Outpost.com that lost themselves in that process and ultimately bankrupted. It's been a road with blood, sweat, and tears that has truly forged what a fantastic operation with an amazing team that continues to take it to new heights. Our next stages will likely bring new engagements as we plan to seek the 500M revenue level. I don't believe we'd have the foundation and culture we've built today without the hard knocks and responsibility which 100% ownership of my company indeed drove priority.
Through starting the business, have you learned anything particularly helpful or advantageous?🔗
Not sure how to answer that one. In general, you learn quickly or overtime - no matter how good you think you are doing something or the level of skill in the doing, there is nearly always a higher level to achieve an ongoing beating of that which you thought was already the best.
And for bootstrappers, credit cards that give good points in rebates or Travel are a best friend. I think the travel cards are probably the very best as a cash rebate is nice, but if travel is beneficial for your work - those points incentivize the travel to happen. I don’t think we’d have done our first AppleFest in 1990 if not for the points I’d accumulated on a Citibank AA card that could be used for nothing other than hotel and airfare.
What platform/tools do you use for your business?🔗
We use a mix of Apple macOS, Windows, and Linux throughout the operation. Our team members use nearly exclusively Mac - but Windows and Linux support our back office server/applications hosting.
What have been the most influential books, podcasts, or other resources?🔗
You learn best by doing. I didn’t read books to understand, I learned by doing. There are ways to accomplish various tasks at hand. Learning what works for your operation by trying and evolving may not always be the best, but if you do succeed through this means - you are often not as limited in your ideas and creativity to go well beyond what you may otherwise be told and end up with something much better through other means.
I can’t tell you how many times I was told you can’t do this, that won’t work, etc, etc, etc - and we’re here today because they were proven wrong. When you’re not locked into some idea, some methodology and have instead had to build yourself - there is tremendous and priceless learning that comes through this process.
Advice for other entrepreneurs who want to get started or are just starting out?🔗
Learn by doing, make sure you can do everything your business needs within certain reasonable limits/specialties, and always be in a position to hold your team accountable to the highest standard you can also stand up to. From there, always seek to recruit people that are better than you and that have buy-in for your vision and are fit for your culture. The vision buy-in can be one of the most important aspects and you’re hiring a team to help your organization write its next chapters, not hiring for someone to write their own.
Don’t dismiss people that don’t have a formal education - there are amazing, teachable, natively wise individuals that can grow with you and achieve greatness while being some of the best, most loyal team members you could ever ask for. And because the path you take is new to them as well, no preconceived ideas of ’the only way’ - nothing is already thought impossible.
Are you looking to hire for certain positions right now?🔗
You can go to this link.
Where can we go to learn more?🔗
You can learn more about OWC’s Green Efforts here.
Here is a different interview of Larry in case you wanted some information about the history of the growth of the company:
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