Inc. revisits a former Anatomy of a Start-up company to find that inexperience led to a slower start.
Inexperience has its drawbacks. For Robert P. Bennett, founder of MicroFridge Inc.("The Small Chill," February 1990, [Article link]), it meant difficulty in raising capital to develop his intriguing device: a compact unit combining a refrigerator, a freezer, and a microwave oven. It also meant grossly miscalculating how fast sales would come. "Lots of things contributed to a slower start," concedes Bennett, "including my optimism." Other factors he noted were the economic downturn, hotels' insistence on doing test programs before they bought in volume, and his decision to use wholesale distributors.
Still, Bennett and his staff of nine managed to sell $4 million worth of MicroFridges last year. With 16,000 units now in college dorms, motel rooms, government installations, and senior housing, Bennett is confident the product is more than a fad.
Last fall MicroFridge restructured its sales strategy, cutting back its wholesale distributors in favor of independent sales reps and direct-to-customer salespeople (who get much lower commissions). Perhaps most important, the company finally managed to land some much-needed cash: $600,000 from a venture capitalist who had turned it down once before.
-- Leslie Brokaw
A manufacturer of combination refrigerator-freezer-microwave units for college dormitories and hotels, in Sharon, Mass.
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* Inexperience of founder
* Is there customer interest in the product?
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RESULTS TO DATE FY Projected 1990 Actual 1990 Net sales $15 million $4 million