Mike Marusic, President and CEO of Sharp Electronics spoke during the 2023 Executive Connection Summit in Scottsdale AZ to nearly 300 attendees.
With a presentation titled “An OEM Perspective on Industry Dynamics,” Marusic spoke on the following topics during his session.
- Supply Chain
- Demographics
- Work from Home
- Dealer Consolidation
- PE Acquisition/Sale
- OEM Directions
SOURCE Industry Analysts Inc.
Full Video Transcript
sponsors ECS is because when it first originated and that was many years ago you know I
would come every year and learn about the industry and as much as now I’m you know running sharp community business when Ed hired
me I only had one year experience in cop years so poor Ed had to about seven years in a
row every day at lunch I would take his brain and try to learn you know the history of the business and you know
what was done before and uh you know learn about what built the business and I became more and more impressed and you
realize that it’s not just the copier business right ton of innovation in this business and
so when you know a joke that Michael went to the dark side I don’t know where’s my contact I went to the dark side for three years
I said you can’t do ECS now and when he brought it back I said to him whatever you do we’re in we’ll sponsor it’s a
great learning experience for someone like me and even all these years later I come here and I learn a lot I learned
about you know the view of the community and what they’re up to and the deal is a really way more you know honestly the
manufacturers and so for someone like myself this is a great opportunity so as I talked today I’m not going to try to
tell you how to run your business you know better than I do but I do want to give a little perspective on what the
oems are looking at some of the challenges it’s hard it’s sharp I don’t see people all of the others but I want
to give you a little perspective of what we’re and at first I lost my voice again
I look at today’s market like a 3D chessboard it is it is impossible
yes as you know we have you know we have the supply chain issues I’ll talk a little bit about that today we have
changing demographics right the industry is changing the people we sell to are changing the users of our product are
changing we have to be aware of how that impacts what we developed how we Market it how we sell it it’s a dramatic shift
in the business obviously remote work was always coming it was going to trickle in you know as I
said demographics change expectations change but obviously covet liked that
off and dramatically shifted that and so now you have a new print reality what is
the print business what does it look like how do we operate in it what’s changes that we have to make and then
obviously the 800 pounds they’re really the room is the next two geotherm consolidation they’re a few
dealers um dealers buying dealers private Equity is under the industry there’s a lot of
private Equity people buying up the business that shifts a lot of thinking for oems of how we operate and finally
we got to consider what our competitors are doing we’re in their directions how do we compete against them I was talking
to someone the other night and I said you know when I assume the job I listed every competitor out and I did like a
SWOT analysis and said whatever they’re doing well we’re not even going to try because doing 80 of someone else’s skill
I lose every time so we kind of pay yeah you know made our own Direction in the industry of what we’re going to do what
we’re going to be good at and finally you know I look at the whole picture together someone might say there’s a lot of stuff going on
something real difficult right and yet for some strange reason I’ve never been
more optimistic about the industry I I see it as a gigantic opportunity uh so
much so that it’s Sharp last year I told you we named our year it’s the theme of our year was opportunity it’s still
opportunity two years in a row we’re very creative event sure but what’s key and I come back to this
over and over in the presentation is this logo of the puzzle pieces and I think that is is one thing that I
can impress upon you today is think of your business as a puzzle you can’t go chasing a shiny object
without all the other pieces you can’t finish a puzzle unless you have all the pieces together right and
I noticed they come as uh you know heretic type conversation but
sometimes believe it or not you can go a different path than you only have you been working with I don’t
mean drop yard I just mean your strategy does not have to tie directly into the strategy of the OEM
stride 50 OEM oftentimes can be dictated by who we are right I’ll be honest when we get to the shop stuff uh it can be
dictated by how much of our business is direct versus indirect through dealers if you’re in direct operation you go
into businesses then a dealer can’t go into so does dictate those things so I do
look at it though with all the other people with all the changes that’s a tremendous level of opportunity now one thing I do know and one of my
biggest frustration if you just heard me say the name of our team of our company this year and last year’s opportunity
the one thing I hate is buzzwords I can assure you that all of the
industry’s challenges will not be solved by cute buzzwords and they’re so common in our industry
like going to transform this we’re going to innovate that we’re going to dramatically uh impact that yeah
um but I do think that you know we too often go oh let’s transform this or you
know we’re going to innovate that and you know what a lot of touch comes down to hard work it comes down to execution
right so again in the infinite creative wisdom of shark we have a dealer meeting in 90 days you know that theme of our
meeting is opportunity means execution pretty damn boring
thank you but that’s how business works you gotta execute right you got it you know no
matter what your ideas are you better be able to actually internally this is a slide that goes up
in every shark meeting ours at the end of maybe uh positive for you what might yours be but you know we
look at the business and say we have a lot of Hardware products you know shark is unique industry in a sense of our
direction right yeah I’m not here to say one’s better than the other I’m just saying this is ours we make products
right we’re owned by Foxconn which is the world’s largest manufacturer of
products right so guess what I’m Focus would be making and you know we have the copiers we
bought toshiba’s guidebook laptop with division a few years back being a part of our business now uh we have displays
we just bought NEC display uh about two and a half years ago we’re now merging out into our business we have our
printers and we have a collaboration display so we have Hardware right
but honestly that’s irrelevance right why would you buy a sharp copier and a sharp desktop display because it doesn’t
really matter right unless there’s something supporting that right that’s the other puzzle pieces it’s how do we
leverage our existing Investments I would encourage everyone when he’s tight right interest rates are higher enough harder to borrow money what can you
build upon a build upon a build upon what money do you spend two three four five years ago and then you can leverage
and further develop your business people and relationships are still very
important in this industry um you know not only your own people but getting to know your customers people right getting closer to your customers
people I’ll spend some time on that and a diversified product offering whether it be Hardware or being mixed with
software Services MPS on the solutions I don’t care you can’t just be a copier company anymore
and operational efficiencies right before cobit hit we went down a path to
automate a lot of our processed out you know have more buzzword uh you know a
lot of process automation RPA you know we did that in 2018-19 most of our back
office is now done that way and so Covenant couldn’t be in the sneeze because our
people it was kind of just automated spots were working away we didn’t have to do anything right but I heard the
other day uh on the first date it was talk about if any of your processes in mind before you do that right motivating
something that’s bad just makes it worse so you know again get your processes in order to get your people in order to
understand that but leverage those efficiencies and finally our robots coordinated which is technical knowledge
understanding our products understanding where the industry is going and understanding how it all comes together for you and fits in your strategy
so the biggest topic for the last year for all oems and a topic that at sharp
we love to talk about is supply chain and you know we fared pretty well last year I put up this slide on the right
you know this uh green box thing and I shared what we were sharing with our dealers right we this is this is I know
John Sheen’s in the back I cannot believe you just shared with something that you probably even a little bit short this is
nothing our competitors can do about it because it’s all green anyway but what we’re doing what we’re doing is in July of 2021 we
started sending this to our deals we started saying hey you need to know right what’s happening with the product
and two things at the time one is every one of our competitors said by the Fall it’ll be okay that was in 2021. okay my
Fall’s gonna be okay and our team would come back go no everyone’s saying it’s gonna be okay in the full month don’t worry it won’t be
um you know we went through it really well but what we did is I think every manufacturer owes it owes it
to their customers to have complete clarity about what’s available right
down to the model so we put out this chart and basically color coding I mean green means at the end of the month we
have enough products in our warehouse for a whole other month sales uh yellow means that we have half a
month I think oh yeah yellow greens half a lot of orange means we have enough in inventory two and a half months and red
beans will run out but have enough uh the first two weeks of thawing month and black means we got a problem okay
so what did this do and this is why communication is critical every dealer took the information and said well
here’s what we’re going to do anything that Shop shows is yellow or orange we’re going to tell our sales people not to sell sell the green stuff well our
orange never became red our yellows never became orange and our greens became yellow but we never ran out we
let the dealers decide what was best for them but I know everyone’s saying that the
chip shortage is over there’s no issues no breaks I want to kind of separate the topics first Logistics what is supply
chain I think that’s soft right I think the ports are caught up I think one of the things we’re seeing is um during
that period it was over construction of warehouses one of the big problems on the west coast was Rock would come in
it was not enough warehouses on the west coast to put the product in so it just stayed on the port right and they get
packed up a little over an important now you’ll leave the ships out to say that’s caught up I don’t think that’s gonna be an issue I think we’re seeing you know a
better better uh results there the chip availability right now right everybody
to a person I didn’t have to ask right you saw end of uh end of sorry November through
December suddenly all kinds of products showed up right well that was because in May and June
we had inflation approaching nine percent every one of the consumer electronics
companies cut back on production and said Christmas is now that’s when we built the Christmas product so if it’s
not going to happen it’s not be as robust as it was and so suddenly everyone just moved to production right
so we changed things but the fundamentals underline the problem is still there and anyone who
knows technology I know we have some Intel people here yesterday and they’re like looking at some of the numbers I have here up here and say you know 130
nanometer chip is like your 2000 right
well guess what this week the year 2000 technology right those are
the biggest problem all of us face in the industry was a power sensor so to speak right
it’s a dollar chip nobody is building a billion dollar Factory to sell a sub one dollar chip or
censor right so it’s old technology until people ramp up production and
change that won’t change so there is going to be some challenge so when will it when will the availability improve I
don’t know um I know if next level once it’s good because the recession fears and things
like that have uh impacted production on other type Technologies but last year I put this chart up and I shared with you
what our industry represents it should uses just what we call a categories to get into perspective
and you can see you know with that little group on the right there right so where it’s a trickle down of chips it’s
a trickle down the technology objects and so as availability improves it starts going to car manufacturers right
I was talking to someone last night this was a car uh I was very pleased because that shot makes the dashboard for that
car and um they said you know they asked a question and about how many chips are
in the car and it was thousands and I checked in and there’s a thousand chips so they said well
how many cars are made in the U.S well it’s about an amazing during a year so that’s a billion ships just in the
car industry we got like two million dreams and seven
eight hundred thousand six hundred thousand energies not just costs right you heard yesterday about Edge computing
right all that data coming in right where do you think it’s coming from it’s coming from a sensor
huge business later I’ll talk about Amazon they now literally have a sensor
on every conveyor belt in their warehouses every single engine that’s
been here conveyor belt okay so now you can do preventive maintenance so there’s AI right you talk AI
what’s the next step this is why we say puzzle pieces what’s next piece of the puzzle so you better have a chip for it
you better someone’s got to collect that data so it takes a lot of build up that production so if there’s a recession we
should have a slots we’ll have availability if the economy rebounds quickly we’re going to see a second second wave and I
know I’m a counter view on this but I hope that in a few years of speaking on
this topic and being able to provide we provided during this period uh we did one month one month in July of 2022
below our 2019 production levels every other month for the last two years we’ve been above 10 to 20 of our 2019 model so
we’ve been able to navigate this and it’s by using this thinking and using this understanding so one more fix first
thing as oems introduce new products they have to change their boards right and do technology that’s a clean what we
call clean sheet design so if you’re a sharp deal I don’t know what the other competitors call it but we always say you know we have model we call it you
know 5.0 rights as we just introduced when you have a point something that means we just change firm where I wanted
to go thanks a clean sheet design allows you to put completely new boards in but
as you saw in supply chain crisis we all use very similar boards so a lot of
people are talking oh we make product in Vietnam and Thailand you know shark does and Thailand also and China won’t affect
us when you introduces over there like the board is made in the Shanghai area
you’re not getting aboard you can you can run your factory everyone can chill for work but the board you need is not
coming back okay as I go back to besides the industry scoping
smaller companies are supporting this industry on the board side we’re fortunate to be a Foxconn sometimes they
are able to adjust Sports how do I get into all that but that will change things and I already talked about the AI
so you know I think that probably through uh the spring you know everything will be okay with chips I
just looks at how the economy is it’s you know our production is about four to five months before you see it in the
market so as of today no big issues right so just tack on your four or five months later and I think industry-wide
we’re going to be fine it’s just what happens in the second wave so I want to talk a little bit about
industry shifts and what’s happening in the industry and so um as I said before I’m going to probably let’s do about
copies we do focus on what is the larger issues
right what are the other dynamics that are impact Ed and served as well not thinking purely copyright a lot of really good copy of people around
thinking about what is outside that so first you know remote work and demographic
shifts are obvious right uh so much has changed there is the pensional excuse me right
our people going back to work I’ll talk about that in a second we talk about gen Z and the Millennials all the time right
I’ll pick on them in a minute but everyone says they’re different and they say they’re different
but it could be really good for our business and how they’re different I’ll talk about that child consolidation
not going to talk about that too many customers in the room but um you know obviously you can see a changing in the
Dynamics in the industry I won’t talk about what I see as uh success no matter how you do it but obviously a mega
dealership Regional Mega dealers you have National Mega dealers you have local dealers it’s all over the place right now and then when I look at it I
say well you can look at his negatives or you look at this how does all this play out to our benefit
and those are things I’d like to talk about so first I do think the pencils swinging back
right I I highlighted these These are the last three weeks
a couple of major companies that during you know I’d say the fall of 2020 into
2021 swore LED interviews talked about it we never see our people going back to
the office right on every news program and as we all experience all our employees said see Google’s not coming
back what is sharp okay office technology so if we don’t come back we wouldn’t buy our products
everybody does that but you can see right Disney nice they can everyone back
to Starbucks taking everything back uh Apple bringing everyone back into the office and everyone knows about Tesla
and all their businesses so you’re beginning to see people come back we’re beginning to see prints you know better
than I do like your print level is I can say it’s sharp every single week our print numbers are coming up right
they’re not where they were but what’s very interesting is we always forget it’s three years since 2019
really right so there’s always a product projection of the business slowly declining on print we’re kind of on that
line it’s really it really hasn’t altered deadline accelerated a period it’s like a step instead of a ramp
but we’re very close to what the projections were several years ago so I think that’s gonna that’s gonna really
help our business we’re going to start getting some of those prints back but as they go around the country and I
visit dealers here’s I see a really three distinct approaches right now in the marketplace
and you know I’m not I’m not voting for what is what is the best I would say execute against what you do but what is
very focused on the print CPC FPS under existing customers have a local Focus
right kind of just what the industry has always been focus on the customers do
document workflow you know local market type things then we’re seeing what I would call
National NPS strategies where companies are saying we want to cover all of our customers around the country ourselves
we want to be very aggressive going through Enterprise major accounts and have a comprehensive program at MPS you
start seeing a transition away from the manufacturers here right if you look at that little circle I’d say the stuff from uh whatever it is maybe four
o’clock to the 10 o’clock position is things the OEM can do right authentication print release security
added device things like that the other things from 11 o’clock to three those
are technologies that really other suppliers many of whom are in the room provide to you right so it’s a different
approach but it allows for you to cover accounts that are based in your territory and cover them everywhere and
I’m seeing a lot more of that I’m seeing amazing execution on that kind of strategy
and then the third is a full service technology provider those are the companies and this is yeah I’ll be
honest this is how the way of shock is leaning for our business in our direct operations is servicing a customer
across all technology platforms talk with the ultimate goal of putting it all under subscription hiding the
prints right and making some money and not competing on price right this is kind of where we’re going um as a company but as an oem
who sells eighty percent of our units to a newer Channel we have to support all three we have to develop Technologies
and support in all three areas but I will argue that diversification is
absolutely absolutely if you’re a sharp dealer you saw this next slide I shared every road show we just completed National Road
show and what we’re seeing on a respect if you’re on the left side slot
you think of our dealer Revenue in groups of service right our biggest third our middle third middle third and
small you can see the gap between the red or dealers and our that are only buying our
copiers the gray are dealers that buy more than just our copyright
the revenue disparities right they are not only are we getting a
lot more revenue from those people but they’re growing at a much faster Pace when they break it out it’s over three
times the growth rate of the ones only nine copters and then as you can see it gets smaller in the middle third and
almost even at about the right side is a number of dealers in those mix and so what jumps out of you
is that the bigger dealers are able to make those Investments and get into other Technologies they’re bracing it
and they growing faster the smaller dealers are having a tough time getting into those Technologies and
building those things so it’s a comment on the OEM to figure out a way to support the smaller dealers in getting
them along that path but it is overwhelmingly clear that the dealers
who are trying new things trying new technologies and this is just shock because I have to data right we also
have a very large spreadsheet that I asked every one of our tbms our territory business management outline
every one of our dealers are they selling other things on a diversified Arlington new areas they’re so we can start the Aging those types of models
right I don’t care if you don’t do the business with us and I do believe you got to get it to New errors so I think
that the market and what we provide is moving towards that right becoming total solution providers and I want to get
very specific in a few minutes but the other big part that’s impacting the industry and as everyone worried is
oh yeah now this is what your 50 uh print is going away now everyone talks about Millennials and
you know you know younger generation and they don’t use print and they’re buying habits for different things different
well I don’t know um you know we think that but then you dig into the data so I think that the
next generation is aligned for change you just have to adapt to them we have to adjust our thinking so I want to
share a little bit of demographics um you know I kind of look at this all the time because first um you know we
always say well who is selling who’s changing who uses our product is changing right
and what they want for our product is changing that’s kind of the assumptions and in some cases I’m going to block
those first on the left you can see what we all know right the Millennials Gen Y
right they’re taking over right they’re becoming the largest part of the workforce they crossed over being have to Workforce so quite honestly if I look
around the room most of the people who use our product is not in a room right now right
and we have to be aware of that and we have to develop our people and have to put younger people in leadership roles
to help Define what’s needed on the upper right because what I call the decision makers
I’ll never forget this it was many years ago I was having lunch with a former CEO
of Marco and he was wearing a very cool shirt and I said man you know
you look for a guy at your age and he said he said to me he goes you know what he goes I always go out on buddy
balls because I sit back I’m just you know evaluating my rep and I’m watching and my rep is talking you know he’s
ain’t right at that but he thinks it’s a decision-making that distinguished you know senior executive the gray hair and
the whole bit right I’m watching that guy and he’s looking at a 27 year old in the
corner and waiting for affirmation from that person because I realized the 27 year
old in the corner is the one doing the evaluation of who we go with the executive already decided to spend
the money they just have decided where they’re waiting for the evaluation right how many people in your organization
think that way right when you drop off a demo unit when you do a demo are you
talking there’s a president of the company the STD companies SVP the company come by themselves or do they
bring a more tech savvy what I would call younger person right with them in
that meeting that’s your audience right so I kind of circle that saying that group circle is really the decision
makers for our product of who buys it the ones who cut the chat that’s the one in the green right yeah they’re going to
cut the chat but the decision makers are those other people and so we have to start thinking how they think how they
want to buy products what they’re looking for in a product and then finally I was glad you know uh we had you know the woman leadership uh
information before because look at that bottom slide okay so you know Melanie Patterson
mentioned you know we started the wise program at Charlotte several years ago
it’s the right thing to do but it’s also the smartest business thing to do right
look at the number of college graduates who’s coming out who’s the educated Workforce who’s the knowledge worker
it shifted okay females are now the leading college
graduate and so for a while so if you follow that curve and you see that about 10 15 20 years ago they start
flipping over to more females graduating college and males right then there now in that blue group making
those decisions doing the evaluations deciding our future not having them involved in how you’re
driving your business and how you’re selling is crazy right you never do that you consciously said here’s what we’re
going to do we have a strategies this we’re going to sell in this group that will have the opposite group Define what
that group needs okay but we’re subconsciously doing that and
so it’s critical that we think like they think and the best way to do that is have a person do it themselves and so
that’s one of the reasons why we created lives was to start elevating you know female Executives to help us Define a
strategy so if you saw Melanie’s title I don’t know you hear somewhere so you’re just wondering she told me another joke
don’t we before any of us speak we say say to my people don’t mess up and find
off so she grabbed me before I came up and said don’t so um you know what was your title strategy
for our direct branches okay because it’s changing so it’s very important so we talk about that we talk
about the new generation every generation I call them it’s patient trophy generation right and
we all kind of laugh about it and we say you know they’re you know everyone gets a trophy when they participate we used
to have to actually play them right and they’re very tech savvy they’re into social media they’re into influencers
right this is a thing that didn’t exist when I grew up you had a professional
football player baseball player doing and you go I don’t know so the manager thinks this coffee maker is good I guess they should buy it right now there’s
influences on YouTube it is an industry because people make millions of dollars okay I’m watching a uh my kids the other
night they’re watching on ESPN they had women’s gymnastics okay on ESPN
never saw that before I said wow that’s great you know and my daughter goes well Olivia does on LSU I
go okay well first of all I don’t know what Olivia that is and I didn’t know and I’m like who’s Olivia done oh Dad
she has like five million followers um Tick Tock and Instagram and stuff she makes two million dollars a year in nil
contracts I know holy cow right just contracts for all the different
gymnastics outfits and fashion things like that they’re influencers that’s different than what we understood
so we focus a lot on what’s different but I want to kind of jump to what’s the same right so I’m not going to go
there’s like 50 shots I would back this up but Ed McLaughlin thank you very much so I
said that I every day I have lunch with that this is Ed’s lying to me all the time what is old is for everything
okay this is surprising right this is a consumer buying Behavior right so
sometimes you know we ask the question do you like this or do you like that and you get high scores and so it’s a c you
know they love doing this they love doing that but when you ask across the whole gamut how do you buy this is
interesting look at what I would call most of people in the saw a room in the room is kind of
the orange side um you know the quality quality of products weighs
heavier Millennials and I’ve never been available reviews
by myself who would have thought that Millennials now generalize that
lower group they’re not quite there yet on the quality thing but who would have thought that they’re basically like
everybody else if not more conscious of quality of product or
quality of service their expectation level right these are people that grew
up with devices that give them what they want when they want it at any point they cannot comprehend
my service can’t be that way right why you can’t fix the copy the hierarchy the network up the same way
the next one is price right almost exactly across the same all
generations so too often we focus on what’s different really the only place that we really see a difference I want
to come back to it is a second one from the end where that’s I know you can’t read the print but I know they’re going
to send it all out to uh well that is do you make a social contribution do you give money to nonprofits and things like
that it’s a lot more awareness in Gen Y a Millennials that in other groups right
but as you can see it’s not the overriding factor but you do need to be consciously you need to be aware of it so
I stole this and then I realized that I forgot to do the attribution so before we send this out about the attribution
but you know this is the characteristics I’m not going to go through every one of these but I did want to highlight some
things where sometimes you misinterpret stuff right so if you look at you know Gen X and Gen Y the first one is their
work ethic right really um you know they talk about eliminating
tasks um self-taught right they want to kind of have Direction and they’re skeptical
about things um kind of similar multitasking on Gen Y right
what does that mean that means that they’re flexible they’re open to change and they won’t be
fast if you really translate what those means in business it’s not a great customer to call out
when you’re trying to sell new technologies is that a great one so on the left you have people who are kind of rigid right if you’re The copier guys
copyright these people say people should be everything people should cross over
boundaries shouldn’t matter so as you go in you can approach your sales process and say actually there’s a
receptive audience on the other end if we target it correctly understand what they’re doing you go down I just want to drop down you
know rewards and feedback right communication is expected what’s the Cornerstone of how how we
build our business forms we have a customer the qbr right well this is an audience the other side
over generations and previous generations they viewed things like well you’re going to tell us what to do kind
of one-way communication right this generation go back to the trophy participation everyone in it together
right they want to work with you they want to understand how we can get better they want to use the qbr not to get an
update on the cost and how much money they spend but it’s a great time to pitch new products I’m going to come back to that
at the end so they’re open to things that maybe we hadn’t thought about before maybe we need to take the
traditional qbr and use it as a sales effort right quickly cover the basics
and move on to what else you offer because you’re talking to a receptive audience
um you know there are other activity-based strategies right what are they motivated they’re motivated by
being involved again isn’t it great that a customer that says I want to be involved right I want to be
I want to talk to you about their vouchers when you add your employees they want to be involved
right that’s actually a good thing earlier I said we need to understand how they sell we need to understand how they
think we need to understand how to what motivates them and then we learned that a characteristic of their personality is
they want to be involved right really easy to get them involved in those processes and then the last part is how
they view technology this is the most interesting I laugh at baby movers saying Technologies of my choice
which is true look look at those last pieces right
that’s right even you know Jedi they look at like they’ve grown up only when people cell phones only with technology
available at all times Gen Y views technology as it just ends right
everything is technology it’s just part of how you live your life
again as you go in to sell product to these Generations
there is a receptive audience the ability to have your customers see all
the offerings is what they expect you’re a technology provider in fact you provide a bunch of different
Technologies makes sense to them right you’re not The copier company you’re a technology
company they’re open to so I look at all these things and I come back to my puzzle
and I said this is how you compete you go into those customers they not only
can you provide all your technology but we’re going to provide all the services we’re going to support you in all those different ways we’re going to give you
what you need to make your business better and you’re going to participate in that discussion
of how we’re going to do it you’re going to work with us and how we’re going to do it and so I go back you know that my
first slide how he handled the splinching crisis right what was the first thing I said
we told the dealers what our problem was that we asked them to help us solve it
and they did right if I hid what was going on
they would have kept selling the stuff I was running out and getting madder and madder at me and I’d be backed up on inventory of
stuff I didn’t have and I said must work on this together here’s the information let’s work it together
a new manager for us they helped us right and so I think that kind of thinking leveraged your customer let
them help you get into business so again a joke hold a slide in my
portfolio if you’ve ever seen me talk you’ve seen this slide right
we are still in the support business of how you view information right and this
instruction if you knew our business as paper and
not as what the paper does the sharing of information and you’re viewing it wrong
the only reason you need a copy the only reason someone needs to print out a page
and share it is because somebody else needs that information that’s why they do it so yes it’s more
and more behind class whether it be you know desktop displays collaboration displays and copyrights you’re in the
laptop sharp does sell those products you can buy from other people supplier we’re the best but
um but I think that we’ve got to view the industry that way but what is the key ingredient right it’s that we
support those products right we provide safety to them security to them that
that product is going to work the most valuable asset this industry has is our field service organization
and we take it for granted I remember 20 years ago my
brother-in-law he’s an MSP in New York and he lives in my house and he saw a bell computer
gasket and he says I gotta watch my f bombs here but he said let me see effing
Michael Dell come here has a picture product right and he’s right eventually had a problem
and I sat there for 30 minutes so I’m not a whole time waiting for support right but if that product was under a contract
and a service contract from a technology provider like yourselves I would have called the number
someone you know you all put up your response time to open up your data and you know exactly how quick you answer
the phone and so it said some will be there at this time to fix it right my obligation to make sure someone’s there
but that’s what we provide okay it’s not fancy it’s not an
elaborate buzzword but it is security it is knowing that the technology we bought is being supported and that is the
golden ticket in our industry so when I look at it there’s all new opportunities to support me right so
traditionally we’re in the office right and I love this phrase It’s workplace managed services right
is how do you go into an office and provide all of their technology needs
and for Sharp I call it customer facing technology right we’re able to provide we’re not there yet to provide servers
and map servers and things like that that’s not what we’re there yeah but we are exceptionally capable
Doing Network support right think about all of your service tabs they got to connect the product to the network
why can’t they put up a router right they can get the route like if they connect the router itself very simple
well I can’t think that is now why can’t you put that under subscription basis and say We’ll manage all your technology
and keep it up and running and use Partners to manage the security and management monitoring and things like
that but we come in and do the things huge opportunity the second fee is the next wave is
working remotely we all went home in March or I guess
March April of 2020 and work remotely if you lived in New York and I told the story many people you know over the
years but I would walk up and down my street you know my family threw me out of the house and I would forgot my earbuds walk up and down the streets off
to dealers and as I walk up and down the street and go from driveway to driveway past that with the Epson box got the Epson
box there the inside printer got you know the the cabin the HP right and I’m
like I work for sharpness is killing me Wellington’s telling me is that everyone was making a whole office okay and
everyone rushed to make the whole office and it surprised me because everyone would have a printer in their house right you know just because what I do
I’ve always had to print my house but now companies go okay you got the place running and here passes they go
oh my God you have no idea what a tree looks like we have no idea who matters in this and I was talking to a dealer
one day and we were talking about hackers and and security yeah everyone’s got their offices locked down meanwhile
I’m on a network that my son has given every kid that goes to his Elementary School the password to our Wi-Fi
is that really logical and then I realized you know we’re talking we talking about it we said you know the
other part is I live in a relatively new neighborhood everyone on our street has Verizon FiOS you have Horizons you
their service team services that means everyone on our block had the same exact route
91 Verizon think about how easy you just made it for a hacker we told him exactly the
device they were hacking into it’s like they put a sign on the front lawn hey if you’ve got to hack into this come here right
well companies are afraid of that right how do we go into our accounts and go hey let’s revisit that now do you know
we can provide security for your people remotely when they’re home right we will give you a router and it can be
dedicated to person you set it up in your office you got to go to your home sign up in the office ship it out right
it’s actually all you got to keep is going to do this for you and then should have did it home and they just plug it
in it runs and now you’ve got a new business now you put that under an m s contract now
you’ve got one employee two m s contracts create a business model right so we got to start thinking those
opportunities we also got to start thinking about the business opportunity right aftermarket
Hardware so yeah kind of hit our traditional business into bold right where you know we say oh here’s a couple printers there’s a couple copiers I’m
going to put a maintenance contract on it the hardware itself is only worth about sixty thousand dollars right in
NGP but then you start layering in the fact that we’re going to provide you Microsoft 365. we’re going to monitor
your devices we’re going to put under an FPS contract we do all these things very quickly it comes to a 429 000 deal this
is not an imaginary deal this is actually one of our direct operations field okay and it has slowly built it up
they’d open up didn’t open it up and now they have the whole thing so it was once you know maybe 100 110 120 000
contractors have a 400 000 pound check I told some people the other day and anyone on our road show
heard us tell this story we were doing a qbr I go back to the qbr and it’s uh it’s 2021 one of our SBS
people are doing a qbr the customer a sub here I’ve got 700 000 customer for
MPS and they’re doing the qbr at the end of the meeting they asked everyone to show through all our other categories
and they said well you know we want to also talk about Dynamo for our laptop business and the customer says well great when
you get some send them more evaluate them and shields will not happen I can send it to you
this is actually going to be all these people and what happened we set one in
within two months we had sold a thousand notebooks to a group in this company right
well then that part group was the only group in a large much larger organization of laptops we had we got
laptops as of now we sold we sold six million dollars for the laptops
due to the final say minute and a half of two yard okay
do you think now I love I love copiers right a laptop
and no one’s working without a lot of time Randy you can kind of get through the day well to bought by the same 19 manager
and we made that it manager Rockstar by getting laptops do you think we’re ever going to lose that printed business
because we saved it up right so that’s critical for how you’re looking for business and subscribe now so I want to
quickly kind of talk about you know how you’re moving you know this is I shared this but as a business move
You’re The copier company you’ve got to work our way up and scan right we’ve got to work a lot of new business you do
that by offering incremental Services going from a copier company to all the way up to managed Network
Services and benefit data recovery and that’s a leader start selling the internet every product start selling the
intermediary products that could help get that credibility that when you say you want to backup all your data do data
recovery imagine intrusions everyone knows yeah you
so what I want to throw out to you as I close up is what is your core puzzle piece right what are you basing your
business around and so I’m going to throw out three examples of people that I kind of look at like I said I’m like I’m not a background copying person so I
can’t have a copier my competitors right most of my peers grow up in copiers they know way better than me so I kind of
look outside the industry for inspiration first one Steve Jobs right I mean what he said is get so close to
your customer you understand what they need before they know understand how that works
well what is it that Apple does when you can talk for hours about Apple
it’s not complicated what they do they make things simple right since the beginning they made
things simple they had a close ecosystem in the beginning even their packaging they reinforce that
message every day we are simple to work with right you get an Apple product you
get it as a white box always clean I symbolize it Simplicity right
and there’s no instructions instructions are hidden it’s like no you turn everything on it works
great message right against loyalty I mean how does ego system appear at the center with their hardware and they keep
selling right you know as you heard some controversies right 30 cut on everything sold on the Apple Store awesome business
model but it started with making things simple for the customer making technology simple well we have that
ability too we have data everywhere this is our mic is screened but in whatever MPS type program you use Mike SSR cell
phone system it is a lot of data in there okay and I want to show you we use this data
right I get a monthly report of all the functions that we use on our product across all of our networking every month
supply chain I know many more competitors tell me all the time when you’re lucky um well here’s one of the things we did
like us the arrow points to the fact that this device is connected to a Wi-Fi network
okay we ran all of our direct operations data and we said wait a second
very small percentage of our products are directly connected not you know they’re not capable Wi-Fi connected to
an echo you can still use it while finding device by connecting company network but the device itself wasn’t
purely Wi-Fi connected so what do we do what I say earlier Wireless chips they were
short they were short supply that’s why it went backward so for a six month period you sold
products without wireless standard if you needed to get as an option right after I just did not producer okay using
data to understand how your customers are using product got us through a big supply chain crisis and really
convenient I apologize to shocked you is what we call them s models for a period of time it’s like a six month period and
we said we’re just not going to sell Wireless we’re going to do Section 8 region product slightly inconvenient but
that drive through hope here using using customer information the next one I love and I did two
pictures the same code because I can see God nerdy Jeff Bezos cool richest man in the world Jeff
Dunham’s on the right but what does he say obsession with the
customer right that is what Amazon does saying are obsessed with the customers
buying habits okay I’m going to quickly go through this the other day
saw Alexa right 10 billion dollars it was 10 billion dollars okay
article comes out two weeks later I see Alexa on Amazon for one of the
devices 19 is only 49. we got this straight you’re losing 10
billion dollars but you just discounted it thirty dollars right what is that and
really what it is is they were using it for the customer data right imagine being in your customer
24 7. imagine being in your customers every meeting and knowing what they’re talking
about knowing about their future strategies experienced it you had a conversation
room you’re talking in your kitchen one day the next day you see 45 answers that topic okay Alexis listen
and they’re using that data they’re aggregating that data that is valuable insight you have that data yourself okay
every single install you’ve ever done for your business you collect all the
company information about the network yeah who’s the contact who the lead person is who the decision makers are if
there’s a problem with the call right well this is the old version of the shark one there’s a new version
we added a box we have our people now ask and I wish I had 100 compliance I know what is what
is the uh sorry what is the laptops you’re using how many conference rooms do they have so that over time we go
back in and we use our customer service people when they walk them through a bill or issues like that oh by the way
we notice that you have five conference rooms with all projectors you should consider this product needs
to be interested or you have old laptops or we did the install we have problems with drivers we have old versions Microsoft
you have an opportunity to collect that data and then the last person this is just more fun if you’re a shark dealer you
know this person um are we doing our top dealer trip is to Richard Branson’s Private Island
Decker Island every year and we’ve all got to know him very interesting guy but he loses right fun in a business
make an experience right think about the businesses that the
Virgin group is in can you think of more boring businesses trains
planes right hotels and now cruise ships right
what does he do he takes care of his employees so the employees take care of their customers
in unimaginable ways right even that cruise ship he said to provide the right experience with no children
because if you have children you have to have a kind of a blended environment right you got to kind of neutralize how much fun people can have
take the kids out you can have a lot of fun on the ship right it’s not exactly we’re going to forego
that market to dominate this Market right how often do we do that
so as I wrap it up I just want to say I think everyone needs to think about how to put their puzzle pieces together I’m
always impressed I walk into dealerships um you know and you can quickly you know in the best dealerships you can quickly
get the vibe of what that company is about right it’s very clear from many of you walk in the door all the way through
you know to kind of how you walk around the building how things are set up how employees talk
right you need to think about what is your core thing it doesn’t have to be shocked and you have to buy our country
but in the rest of open-minded um you know but I think everybody if
there’s one thing I can ask you walk away with so hopefully what I can contribute today is think of your
business as a puzzle piece your business is not complete until the puzzle’s complete you have all the
pieces are placed and they are interrelated and you’ve got to take your business that way
so thank you very much I appreciate your time hopefully [Applause]
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