Innovation creates and sustains business. Just ask Justin Carson, who started his first business with when he was 17.
Carson installed and cleaned beer-tap lines for restaurants and bars. His clients appreciated his work but found competitors that could do it for less. They asked Carson to lower his price, threatening his profit margin.
Somewhat discouraged, Carson traveled to Europe for business research. He discovered a liquid product that changed colors when beer lines were completely clean. He returned to his clients and, using the solution, showed them his competitors weren’t really cleaning their beer lines — not like he could.
Carson soon expanded his business, JC BeerTech. He’s now cleaning beer lines in close to 10 states.
But that’s not all. Carson moved into the craft beer industry, opening Platform Beer Co. in 2014 on Lorain Avenue. Today the company has two other Cleveland locations, plus one in Columbus and Cincinnati, and is planning to open a Pittsburgh facility late this summer.
Carson, along with Matt Brandenburg, CEO of Prince & Izant, a Cleveland metal-brazing firm with customers across the globe, spoke about innovation May 20 during a Middle Market Forum organized by Greater Cleveland Partnership (GCP).
Tom Stewart, executive director of the National Center for the Middle Market, gave his keynote address on the DNA of Middle Market Growth.
“The middle market is one of the fastest growing segments in our region,” said Megan E. Kim, senior vice president, membership development and marketing at the GCP. “At the GCP, our role is to connect these businesses to the resources offered by GCP and our larger network of local, regional and state partners to help them grow and thrive here in Northeast Ohio.”
Firms in the middle market are generally estimated to have revenues between $10 million and $500 million.
The forum also featured breakout panels of business investors and efficiency experts. Ohio Lt. Gov. Jon Husted gave a second keynote on how his office is working to make doing business easier, more efficient and more profitable for middle-market companies.
Moderating the innovation discussion was Lute Harmon Sr., one of the founders of Cleveland Magazine and chairman of the magazine’s publishing firm, Great Lakes Publishing.
“And I found out, which every one of you in this room knows, that not only do you have to start a business, you’ve got to keep it going,” Harmon said. “And that’s what innovation is all about — it’s about continuing to think of those things that keep us growing.”
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Like Carson, Prince & Izant started in one industry and innovated its way into others, although over a longer timeframe. The company was established in 1927 and, today, has plants and offices in Chicago, Indianapolis, Ireland, Shanghai and Taiwan.
Brandenburg said Prince & Izant still brazes — joining metals together in a process similar to, but different than, welding.
Prince & Izant also has gone high-tech, expanding into the medical, aerospace and electronics industries. For example, the company innovated a powdered titanium product that forms a complete seal around prosthetic limbs and human skin, eliminating the risk of infection for amputees.
Brandenburg said 99 percent of the time customers and their needs drive innovation. Prince & Izant rarely innovates on speculation. That’s why frontline salespeople, who are in constant communication with customers, are encouraged to think like innovators.
In fact, Prince & Izant wants all of its employees to think creatively. It formed an innovation team consisting of workers from every department, including shipping and receiving, accounting, finance, manufacturing, engineering and sales. The team has come up with enough successful ideas to convince the rest of the company to buy in, but failures are part of the process.
“The important part for us is knowing when to cut it and take our lumps, even when we have money invested in it,” Brandenburg said.
At Platform Beer, Carson also nurtures creativity in employees, including salespeople, who have introduced several successful ideas for retail sales through discussions with customers.
An audience member said innovation is great but how does a private company like Prince & Izant compete with conglomerates selling similar products?
Brandenburg replied that when Prince & Izant innovates, it aims to create the best products, not necessarily the least expensive. That means recruiting experts to the staff when necessary.
“When we release a product to the market, it can’t be a me-too, it can’t be a compete-on-price, because we’re competing with giants,” Brandenburg said. “We have to bring something different, and a better product, and a more user-friendly product.”
Carson said he always looks to differentiate Platform Beer from competitors. So when the number of craft beer makers mushroomed and the number of beer distributors decreased during the past few years, he bought his own beer trucks. Today, Platform Beer is the only brewery that self-distributes throughout Ohio, he said.
Carson said his company employs four full-time data analysts who determine which brews are performing well.
“What’s going on in our tasting rooms? What’s popular?” Carson said. “Our brewers can try different things, but we’re not going to scale it up until we’ve proven that it’s a popular item.”
In his presentation, Husted said Ohio is finding innovative ways to build up Ohio’s workforce. The state is funding career tech centers at high schools, preparing students for positions that need filling. Ohio also helps provide training for those who have lost jobs and is planning a program that will reimburse companies that train workers.
Husted also is leading InnovateOhio, which will allow 27 state agencies to share data and information on a single electronic platform to better serve citizens and businesses. Husted said that through InnovateOhio, state government will address problems like infant mortality and drug addiction and evaluate what’s working and what’s not.
“If we do that in state government, we will create a better environment for you to operate and for all of you to prosper,” Husted told business leaders.