large TVs, a couch and an industrial kitchen. The space is designed for employees to reserve it for personal parties if they want. And lastly, from ‘social/customer impact’ side, we focused on developing elements that would allow us to host customers and show them the process of making the covers. We have large windows from the second floor office out over the production floor. All-in- all, the decision to build was motivated more by other factors than by growth. We could have gone to multiple shifts in our last building and saved tons of money in the short term. But we believe this new building communicates to employees and customers, our desire to build a company that matches our products in terms of quality and durability. But your growth is impressive nonetheless and growth has to start somewhere, right? How did it all come together for Diamondback Truck Covers? That’s true. We’re growing steadily at, I’d say, more than 23 percent every year since the recession. It all started when Matt and I were engineering students at Penn State University back in 2002. We conceived everything as part of an assignment. The original product, around which the company was built, was a truck cover that would seal and lock the bed of a pickup truck, while also providing the ability to haul on top. In May 2003, DiamondBack was incorporated and we began redesigning and refining our product.
Starting out, the company pursued a business model used by almost every other manufacturer in the industry. This model included developing large warehouse distributor customers who would sell to truck accessory dealers, who then in turn would sell and service the retail customer at locations around the US and Canada. From 2003-2007, the company grew quickly using this model, however the financial margins afforded by the model did not produce any profit. Over this time, outside investment was needed to grow and the company brought in money from friends and family – as well as investments from the Ben Franklin Technology Partners, the Garber Fund from PSU, and occasionally traditional bank financing. In 2008, the company had secured a direct relationship with General Motors to provide the locking truck cover for the HUMMER pickup truck. Additionally, the company had just obtained national distribution through multiple distributors and had strong sales with commercial fleet vehicles. Then the financial crisis of 2008-2009 hit the industry. During the recession, truck sales fell by over 50 percent in three years and the industry suffered near catastroph- ic change. DiamondBack watched as all the pillars of its current business model cracked and eventually fell apart.
As we realized that declining truck sales would decrease our unit sales growth potential, we pivoted away from the industry
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DECEMBER 2017 • SPOTLIGHT ON BUSINESS MAGAZINE
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