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36

What Got Us Here Won't Get Us There
 

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For four years running, from 1999 through 2002, Aquascape landed on the Inc. 500 list of the fastest growing privately held companies in America. Yet on December 31, the core business that achieved that feat with will be dead. Why would we kill what was a successful and prosperous business in favor of another model that is completely untested, you ask? Simple. We decided to stop trying to be all things to all people and figure out for the first time what we truly want to be when we grow up.

In order to achieve this new vision, we have been working tirelessly to remake Acquascape from the leading direct-to-contractor business to the superior distribution and market development company we want to be. From now on, instead of selling directly to contractors, we will sell our professional line only to distributors who will take responsibility for selling to contractors. Beginning January 1, we will see how our gamble pays off as we refer all callers interested in our professional product line to our extensive distribution network. To even contemplate turning over our customers, the lifeblood of any business, to our network -- a network that didn't even exist one year ago -- seemed preposterous when we first began considering this.

And yet, today, after one year of a full-scale assault, we have increased our distribution access points from 71 to right around 500. What this means is simple. We're putting our customer base in the hands of a distribution network that until now we had supported with a wink-wink. Now, for the first time, we've put our money and our customers where our mouth is. Before we made this strategic decision, I couldn't have said that because I was hedging my bet. On one hand I would claim that I supported distribution because I realized the importance of local access points for our products. On the other hand we would ship products directly to any contractor in any market anywhere -- regardless of the contractor's proximity to one of our distributors. Needless to say, this didn't exactly build goodwill with our distributors. By playing both sides, we came to realize over time that we were doing neither our contractor customers nor our distribution partners any good. Hence the decision to pick a horse and ride it. And the distribution model looked a lot more promising to all of us than the direct-to-contractor model we'd built this business on in the past.

Here's the crux of my argument: By trying to be all things to all people, it's easy to end up being nothing to nobody. So we've made our choice, and a superior distribution and market development company it is. With that, another age-old business dilemma is decided. We have chosen to exchange high margin direct sales for lower margin, higher volume distribution sales. That's the game plan to get us to our goal of $100 million in sales by 2010. The market's there. Water features are still hot with consumers. During the transitional year of 2007, we sold more products -- albeit at a lower margin -- than any previous year. And now we have a network of fully vested distributors to partner with. Needless to say, if this transition fails, so do we. The question is, did we make the right choice? We'll find out soon enough. In the meantime, it's been anything but boring around here, which is the way I like it!

Last updated: Dec 18, 2007




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