‘[Magenta Researchhas] targeted all ourresources for signagesolutions. We’re nottrying to compete witheverybody and makea million differentproducts.’—Keith Mortensen,Founder/CEOKM: Of the six people who camehere with me, all but one, whorecently retired, are still here. Idon’t think anybody’s ever quit. Ourselection process is rigorous, and it’sresulted in a tight-knit group. We’rea lean organization; there’s not onesecretary in our whole company. Everybodyworks very hard and, whenthe company is successful, all theemployees benefit, as well.S&C: What’s different aboutMagenta, from a technologicalperspective?KM: When we approach productdevelopment, we take a scientificapproach rather than a typical engineeringapproach; it’s different.For example, we probably spend sixman-months mathematically modelingthe transfer function losses of cablebefore we do anything in the way ofputting together a schematic, tinkeringin a lab or picking up the solderingiron. We identify the math problemfirst, which makes it easier todevelop an engineering plan to solvethe well-defined problem. The scientificapproach comes first, and then theengineering approach takes over.Our priorities are a little bit different.We don’t have a huge productcatalog, trying to solve every problemin the world. We focus all our expertiseand resources on solving specificproblems, selling unique products andmaking them the best in class.S&C: What is your trade showstrategy?KM: We attend the InfoComm andDigital Signage Expo shows domestically,along with international eventssuch as InfoComm Asia, IntegratedSystems Europe, PALME and others.Our show strategy is also a little bitdifferent. Because our focus is not onthe presentation market, we tend togo to a number of smaller shows thatbetter target our market with laserprecision: signage. We find those aremore productive.S&C: To what extent is Magentaan international company? Howquickly is the distribution mapexpanding?BM: International is certainly apriority for us. Between 2003 and2006, our growth was really fueleddomestically. International exposurewas there, but wasn’t a strong focalpoint. That was primarily due tothe fact that US signage opportunitiesoutweighed those of Europeand the rest of the world. The trendhadn’t really moved outside of NorthAmerica. That didn’t change in a bigway until 2007. Over the past twoyears, we’ve recognized a shift insignage growth outside the US anddeveloped a strategy to penetrate theinternational market.For us, being prepared is a majorconsideration. So, 2008, in the currentfiscal year, is when we really executedon a strategy to increase ourinternational presence. We broughtin an experienced sales directorand one of his prime responsibilitieswas to create an organization tosupport export in the same way wesupport our domestic channel. We‘We all recognizethere’s going to be aslowdown this year,but we’ve reviewedour numbers andstill expect to havehealthy growth.’—Bob Michaels,Vice Presidenthave a very strong support networkthroughout the United States anddidn’t want to develop the internationalchannel without being properlyorganized to perform on the samelevel as we do in the US.We identified and selected partnersthat will work with us to grow thebusiness. We weren’t looking for adistribution channel that would justput our name on their line cards,hope the phone rang and send us afew orders. That’s not our model.We established our guidelines forall international channel partners andactively recruited, selecting from anumber of potential partners. Sincethe beginning of 2008, we’ve addednew distributors in 10 key countriesand territories, and we’ll have morenews in the next few months, whichwill be announced as relationshipsare established.We take essentially the same deliberateapproach to this as we do inproduct development.S&C: How expansive will yourinternational outreach be?BM: Ultimately, we will cast a verywide net and, to some extent, ourpotential customers around the worldwill dictate the expansion to us. Weare recognized for strong technicalproduct, the ability to support it, and tosolve application issues and problems.Many places around the world certainlywill want to take advantage of that.But our immediate program targetshigh-growth areas: places where wecan make the most impact, gain marketshare and have healthy prices.32 <strong>Sound</strong> & <strong>Communications</strong>www.soundandcommunications.com
S&C: Why was 2007 when digitalsignage broke out of the NorthAmerican box?BM: For us, we kind of “caught up”with the growth here and seized theopportunity to expand into the internationalmarketplace. Our inquiryrate significantly increased duringthat period, as well, in terms of thosecoming directly to us, to our website,or potential distributors expressinginterest in representing Magenta’sproducts. It was just the right time.S&C: How do you explain MagentaResearch’s success in commercialAV?KM: There are several elements.We’ve targeted all our resources forsignage solutions. We’re not trying tocompete with everybody and make amillion different products. We’re notbranching off into breakfast cereals,car jacks and everything else. Westay very focused. We also benefitfrom the premium placed on reliability.We focus heavily on that in all ourproducts. If you have 10,000 displaysaround the country and 10,000 Cat5video receivers at each display, youcan’t afford to get a phone call atyour corporate headquarters fromsomebody saying, “The display overour popcorn stand is down. Fly somebodyout here.” You can’t have that.Reliability, reliability, reliability.All our products have a 100,000-hourMTBF…more than double the industrynorm. Our environmentals are upto 55°C operating capabilities, whichis significantly higher than mostcommercial electronic products. Andit’s borne out in our extremely lowfield failure and return rates. Wedon’t have a specific repair department;it’s not necessary.BM: Other companies are heavilyfocused on addressing the full-scaleneeds of the presentation market; forus, we stick to our mission…to ourfocus on signage. So, why is MagentaResearch successful? We focus exclusivelyon our core competency ofsignal management and distribution.We have an emphasis on high-leveltalent in all areas of the company.And, finally, we take a scientific approachto everything we do.S&C: Do you anticipate rapiddigital signage market evolution?KM: Absolutely. If you look at digitalsignage when it first emerged, itwas most successful in larger venues—throughoutsupermarkets, forexample. Now, it’s filtering down tobecome simpler and simpler, smallerand smaller. Even in a non-chainstore, someone will get some simplesoftware, put up one screen and makea little sign in the lobby, welcomingpeople. Consider an application like adentist’s office, for example. So, largescalesignage is still exploding andsmall-scale signage is, as well.As far as where Magenta is going,if you look at our entire MultiViewproduct line for distribution in analog,you’ll see everything replicatedin digital format and being rolled outover the next 18 months. nFull Discount Wholesale is thepremier supplier of Professional Audio,Video, A/V and Lighting equipmentto resellers and contractors.Extensive InventoryLow Cost ShippingNo Minimum OrderHundreds of the Top BrandsFriendly, Experienced Sales ProsExceptional Customer ServiceBlind Drop Ship Capability800.828.0509