Interview with Blake Hobson, Co-owner, Image Industries

Illinois-based family company Image Industries has been in the business of stud-welding since 1976. Second-generation siblings Blake and Stacia Hobson are now pushing their father’s business to the next level with continuous innovation and expansion. Adopting a customer-centric approach and embarking on projects well outside their comfort zone has taken the company to new heights. Co-owner Blake Hobson spoke to Tharawat Magazine about knowing when it’s time to change and overcoming entrepreneurial fear.

How did the family business come about?

My father always had an entrepreneurial spirit. He started Image Industries in 1976 with $5,000. With his talent for sales, he became a manufacturers’ representative for competitors of his old employer. He did very well: his commission checks were fairly sizeable so the manufacturers he was representing decided to hire their own sales reps instead. He just said: “That’s okay. I can become a distributor instead.”

So he started buying product – from the same people who just fired him – and selling it on. When he ran into supply troubles – a lack of available product – he decided to buy his first piece of equipment and make the product himself!

It’s kind of backwards; most companies have a product, decide to sell it, figure out how to market it and get a sales force to sell it to customers. He did it the other way round. He started out as a sales guy but because people kept putting obstacles in his path, he had to find ways around them.

My sister Stacia joined my father in the business right after graduating. I, on the other hand, was always destined to be a corporate guy. I worked for Intel as a semiconductor engineer and after my MBA I joined Ford Motor Company in a product development role. I was a suit-and-tie guy, climbing up the corporate ladder. I did that for five years before I became very frustrated with the internal politics of the company.

INNOVATION: Welding the Future – Image Industries and their Path to Innovation
Image courtesy of Image Industries

How did you come to join the family business?

I started in sales. My first six months were a disaster but after a period of adjustment, I started to have some success. We were growing and had taken on a couple of good customers. The problem was we didn’t have the capabilities to land the larger customers. We were just a little family business.

We were already manufacturingspan> weld fasteners so we decided to start manufacturing the welding equipment to install the weld fasteners. At that time, we were probably manufacturing 50% of our products and buying in the rest. Today we manufacture 98% of what we sell. We went from having operations over 5,000 square feet to over 70,000.

After a couple of years, we hired a salesperson so I could leave salesan> and move into a product development role. That’s when my engineering side kicked in. I looked at how we could develop superior welding equipment that offered more functionality to customers. My experience at Intel helped me think innovatively.

We developed the first digital stud welder. We exhibited it at the 1998 Detroit American Welding Society show and since then we’ve steadily expanded the product line and tripled our revenues.

INNOVATION: Welding the Future – Image Industries and their Path to Innovation
Image courtesy of Image Industries

How did you gain confidence in your leadership abilities?

My father> has a very strong personality and that embedded a very strong culture in the business. But we needed to have procedures and structures in place so we could respond to the demands of larger companies. Because I came in from Ford Motor Company and Intel I had all this ‘big structure’ corporate thinking; but here we were at this little company, where everything is done by the seat-of-your-pants. I would say one of our biggest challenges in growing the business was to move it from this ‘personality’ culture towards a more ISO 9002 standards-based one.

Did working together as brother and sister fall into place easily?

It’s nice. We sit down and talk about corporate goals. I know Stacia is going to help achieve them and she knows how I’m going to help achieve them. Stacia handles production</span>, purchasing, scheduling and shipping. I take care of marketing, engineering, and product development – I take care of tomorrow, she takes care of today. For the most part, we’re not in each other’s hair. It’s worked out fairly well and I’m very grateful.

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When did you feel you needed to change in order to scale?

Gillette sells its razors for next to nothing because they know you’re going to buy the replaceable blades forever. It was the same with our fasteners; the equipment that welds the fasteners in place are our razors and the fasteners are our consumables. Five percent of our revenue comes from equipment and 95% comes from fasteners.

From a manufacturingn> perspective, our fasteners are very simple. They use very simple bills of materials and we sell high volume. Our welders, on the other hand, are very complicated. It’s like we run two different businesses all in the same house.

When we got our first tier-one customer their demands seemed very high. That’s when we had to start investing in new types of equipment to help us grow. At the same time, our “>father was stepping back from the >business. A lot of entrepreneurs are uncomfortable leaving somebody else to tend their company, but he had enough foresight and confidence to do it. I’m sure there are days he got butterflies in his stomach, but nevertheless, he stepped back. That allowed us to move on and get ISO certification and so on.

How long did it take to implement all these innovative ideas and what sacrifices did you make?

It’s something we’re still working on. One of the biggest sacrifices we’ve made is that we decided not to take any money out of the business. Many entrepreneursspan> prefer to live comfortably but as a result, the business can’t grow because it constantly needs an infusion of capital. My sister and I have not taken a pay rise in at least 10 years, maybe more. I’m not complaining; we live well, but we’re pouring the majority of the money back into the business, and this fuels our focus on innovation.

INNOVATION: Welding the Future – Image Industries and their Path to Innovation
Image courtesy of Image Industries

How do you know which part of the company needs innovation?

We focus on solving problems for our customers as they arise. I ask them “What do you want to change?” and they give us a problem to solve.

Last time that happened I spent 18 months doodling on a pad to solve such a problem. The new fastener solution we came up with was wonderful but it was going to take significant capital to develop because it required a whole new piece of equipment to make it. So, I kept it on the back burner.

A little further down the line one of our customers invited us to present 10 new ideas and we put this one forward. They almost fell out of their chairs! In partnership with that customer, we developed the new product and invested around $2 million in it. $2 million is a big deal for us.

We haven’t launched the product yet but we’re ripe. We have this customer that really wants it. They anticipate their annual demand, between them and their tier-one suppliers, at 20 million pieces a year. We think it could equate to 25-50% in growth over the next five years, so we’re very excited about it.

This kind of innovation only happens because we show up. We go and see our customers and tell them we’re willing to invest this kind of money and effort to develop new solutions.

How do you prepare for growth?

We don’t like to be reactive. We’ve put in place a growth plan and are ramping things up gradually with our customer.

But a large part of growth is all about things you haven’t done before. You just have to figure it out. And that’s where the entrepreneurial fear creeps in. I won’t get there if I discourage myself so somehow I’ve got to figure out how to do it. I will be using Google quite a bit to help solve my problems!

I wrestle with fear every day. I don’t pretend I’m confident; it’s not like that at all. Every day I wonder if we’ve made the right decision. Are we doing the right thing? There’s a lot of self-doubt in any sort of huge endeavour like this.

INNOVATION: Welding the Future – Image Industries and their Path to Innovation
Image courtesy of Image Industries

Will the company culture have to adjust as a result of innovation and growth?

I sincerely hope we’re a different company 10 years from now. Change is constant and you should always be adapting. I tend to be driven by numbers and facts but corporate culture isn’t like that. My sister works hard on company culture and organises celebrations; she’s good at making people feel recognised.

Is the next generation interested in what you’re doing?

No. My sister has no children and I have two boys. Neither of my sons is interested in the business. One is interested in shoes and one plays football in college so he wants to go into sports. Fortunately, I’m only 53 so I’ve probably got at least another 10 years left to work on some sort exit strategy. It will depend heavily on the success of the project we’re about to launch. That could change things significantly.

What kind of a person do you have to be to effect change?

Change is going to happen. You have to recognise that change is good. Look at the disruptions that have happened in market places to date: Tesla in automotive; Apple in cell phones. If companies aren’t willing to adapt to change, they are in trouble. A lot of people hate change and that holds them back.

Most of our opportunities have come about by solving customers’ pain. A customer has a problem. How can I solve it? Think about it; we only really buy things to solve problems. Problems and customer pains are opportunities. It might be a change in a vendor or a change in a process, but it opens up an opportunity for those who can spot it.

You also have to learn how to calculate your costs. it’s going to be wrong, but it’s better than nothing. How much are my products going to cost, how much is it going to cost to develop this and how much do I think I’ll realise? If it looks good, believe in yourself. Believe in your numbers, embrace the change, seize the opportunity and go forward. That’s the best advice I can give, and yes, it’s scary. Having a little confidence in yourself and your own abilities keeps you moving forward.

Tharawat Magazine, Issue 30, 2016