Printing companies have found it increasingly difficult to press ahead in recent years.
First, digital media reduced the need to put ink on paper. Then the recession of 2008 made clients cut back even more.
It was make-or-break time for four-year-old Mi5 Print and Digital Communications. The company needed to significantly increase revenue to cover a multimillion dollar investment in new technology at a time when the competition was putting downward pressure on printing prices.
With revenue and workloads falling dramatically, many established printers were just hanging on to existing orders and trimming staff. But Mi5 decided to expand.
"While everyone else was playing it safe, we saw an opportunity to attract new clients by offering innovative products and hiring experienced people who were being let go by the competition," says Steve Tahk, vice-president and general manager of Mi5, based in Markham, Ont.
Mr. Tahk's background is in ink technology, and the company's chief executive officer, Derek McGeachie, is an expert in printing technology. They reasoned the best way to make Mi5 stand out from the competition was to develop a proprietary brighter form of ink, which they called PRO-Brite. Even though it's made from more expensive raw materials, the ink can produce high-gloss images on lower-cost, uncoated papers.
Making such a bet on innovation is a risky play, but it can pay big dividends for an innovative, small company in a mature market, experts say.
Companies in dying industries tend to focus on extracting as much as they can out of existing assets. "There doesn't tend to be much focus on investment in new technology or looking for new opportunities," says Stewart Thornhill, a professor of business strategy and director of the Entrepreneurship Institute of the Ivey Business School at the University of Western Ontario.
That's where an entrepreneur who asks, "How can we wow them?" and develops something innovative can persuade clients to switch from their established suppliers, Dr. Thornhill says.
Technology has transformed printing from an industry with a few large players to a fragmented market where small shops can produce high quality work, often with a quicker turnaround and more flexibility than the established giants.
In any mature industry, entrepreneurial firms looking for growth should seek out disruptive technologies that offer products or services that are fundamentally different than those of their competitors, advises Douglas Cumming, professor of finance and entrepreneurship at York University's Schulich School of Business in Toronto.
"A good source of intelligence is products or services that customers say they really wish they could get," he says.
Even when companies have similar technologies in development, established ones may be slower to get them to market for fear of undercutting their regular product lines. "A prime example is the decline of Eastman Kodak as it kept its commitment to emulsion film, while other companies invested in developing digital imaging," Dr. Cumming says.
Mi5 had done its homework about what customers on tight budgets wanted, Mr. Takh says. "They wanted printing that would pop off the page. At the same time they wanted to pay as little as possible."
"We worked to create inks with cleaner pigments and a process where we could lay down thicker layers," he explains. "It's like paint: If you can lay down more you can create a deeper, richer colour."
The company "spent a significant amount of money" on research and development, he says.
Attracting new clients was a matter of show and tell, Mr. Takh says. "We spent a lot of time cold calling with sample books, showing clients there was a visible difference in what we could offer. We even invited them to try us out for free on a sample run of an existing job to show them the difference the ink could make."
To make those sales calls they hired experienced printers who were being let go by competitors. "Having people with 10 to 20 years of experience in running a printing plant helped, because they could answer questions immediately rather than having salespeople or estimators who are order takers but don't have ready answers to technical questions," he says
And they developed a fast turnaround time, making it possible to deliver orders the same day. "Our capacity in all areas has grown, our finishing department doubled in size and our print division almost tripled. And on the large-format side we added new machines with high quality in mind," Mr. Takh says.
The strategy has paid off in phenomenal growth for Mi5. From a company with 30 employees in 2008, it's now got a full-time team of more than 100. This year it ranks 31th on the profitguide.com ranking of Canada's fastest growing companies, with revenue expanding at least 20 per cent a year since the recession.