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 standard model of distribution to a more direct approach to sales. This was a business model that Matt and I – as well as key employees – preferred to pursue for the long term.
44
SPOTLIGHT ON BUSINESS MAGAZINE • AUGUST 2017
Made with FlippingBook - Online Brochure Maker