MFG Austin Ep. 9 with Bryan Kranik, CEO of Buildasign

Today our guest is Brian Kranik of Build A Sign —a darling company that was founded here in Austin, Texas but acquired in 2018 by Cimpress, the parent company to Vistaprint. Brian took over as CEO in 2017 and has guided the company through the acquisition and COVID to merge stronger on the other side.

As you mentioned, Build A Sign was founded in 2005 in Austin, Texas. And it’s just been a tremendous entrepreneurial success story. The company was actually bootstrapped and never had to take any funding or anything. And it was cashflow positive from almost the beginning. And just after a tremendous run of growth in Austin, as you mentioned, was acquired by Cimpress which is the parent company of Vistaprint and several other mass customization brands. So now it’s been three and a half years and it’s been a great run since. We’re somewhat unique in that we have everything sort of end-to-end from a business perspective in Austin. So, we market, we sell and produce, all right here in Austin. Which is some somewhat unique but also very exciting. It’s a great way to really see everything end to end for our employees. We have about 500 employees right now. And we occupy three facilities, essentially. Two production facilities, both near the Domain, one off Stone Hollow and one off Metric. And then we have an office site as well right across the street off Stone Hollow.

Yeah. I can’t say enough about the Cimpress relationship and partnership. They have sort of a unique approach to acquisitions. They look for companies that are very similar to Vistaprint. They specialize in mass customization, go direct to the customer, and mostly sell through online. And they acquire brands very similar to that. Essentially, the acquirees get to leverage all the synergies that come along with that. For example, we all share the same shipping contract. We all use a lot of the same printers. We all buy a lot of the same ink and common raw materials. And really you get the sort of buying power of this over $3 billion corporation and really the global leader in mass customization. But simultaneously, they run the acquisitions very decentralized. And they’ve learned over time that’s the optimal model. Because they really don’t want to stifle any of the entrepreneurial spirit. And so it’s been great. The company is just a lot stronger than it was. We shared tons of best practices across the brands, help each other. In fact, we actually are all part of a network. It’s called the Mass Customization Platform, where other sister companies within Cimpress can actually sell the products that Build A Sign produces. And so Vistaprint can go sell canvas, for example, home decor items, etc. that we produce right here in Austin, Texas. And then vice versa, on products that Vistaprint produces. So it’s really an interesting, compelling model and has really helped us serve our customers a lot better.

Yeah, I think it’s fair to say that at the time the company launched, there probably wasn’t a superior player in the online space for signage. Probably the best avenue to buy signage was more of a traditional offline channel. Which we always say more of either mom and pop type local store, or something like Fast Signs, etc. Right? The problem there is that you can only scale so much in terms of capacity and to really drive down the cost of what you’re doing. And two, is for companies that have multiple locations across the country, you can oftentimes run into some inconsistencies. If somebody’s working with somebody in New York on a certain brand color versus someone in Texas because they’re all coming from different printers in different locations. So we were the first to market options where someone could basically serve their customers across the country. And then we were able to do it at significantly cheaper costs than the offline options. I haven’t checked recently, but I would say we’re at least half the price of any offline option. That’s where things really took off. I think we have a lot of smart folks that really continue to optimize and figure out different avenues for growth. About eight years into the company’s existence, we got into the whole home decor space. We do tons of canvas prints, we do apparel, etc. and just have figured out ways to continue to kind of scale that model that really all started with signage.

Oh yeah, still bumper stickers. We are all about freedom of speech and you know, its sometimes entertaining, especially election time, to see what comes off that printer. There are definitely lots of different views out there, but we like them all.

Yeah, it’s a good point, right? We actually did a study a while ago and it was somewhat inconclusive, but we were trying to prove the point that candidates who bought signage through Build A Sign won their elections more often than those who didn’t. It was kind of inconclusive at the end of the day. But we like to think we’re doing good things there.

Yeah, essentially what you’re describing is kind of the basis of the foundation of the company. What we call it is web to print. And you’re exactly right. You hit click and you hit buy on one of our websites. And that order literally funnels directly to the printers. That’s kind of the foundational piece of software Candidly, there’s a lot of folks who do something similar nowadays, I think. So yeah, so it’s definitely an advantage but the software itself is probably not as large of an advantage as it was years ago. But what we believe is it’s not just the software. It’s also how that works in tandem with the production process and efficiency. So now you have a bunch of orders that are oftentimes partnered with other orders. I ordered a banner and a sign and I ordered multiple canvases—one is a 16 x 20 and four are 8x 8, etc. And I live in California versus I live in Texas, etc. So you have all these variables that are essentially hitting the production floor at once. And essentially if you just say okay, whatever the most recent order is is the one I’m going to produce, what you’re going to quickly find is there’s a lot of inefficiencies out there in your production process. So what we’ve really tried to do and really to stay ahead is figure out how we essentially maximize throughput in the most efficient manners as possible. And it differs by process. You know, we do a lot of different products. And sometimes, everything needs to be optimized around shipping, for example, because that’s the highest cost for the product. Other times it’s around labor. Other times it’s around actual space and width. I think the software itself is kind of the foundational element, but it gets a lot deeper once those orders actually hit the production floor.

Yeah, so the holiday is big for us. Roughly about 40% of our home decor revenue is done essentially between Black Friday and then the last ship date to get in home before the holiday. I think it’s December 21st this year. So yeah, it gets busy definitely and there’s a lot of planning that goes throughout the year. I also think it’s kind of a unique element that Build A Sign has maybe relative to other companies, back to the sense of this end-to-end business because it’s a constant kind of balancing act of driving demand, but not overwhelming production so we miss any customer deadline. And so it’s almost like this ping pong ball that goes back and forth where every single hour, multiple times a day, we’re having checkpoints between the marketing team and the production team to essentially make sure that we never overwhelm production. But if they need more volume, because most of our marketing is all done digitally, we can dial things up. And so it’s really kind of a neat process that we’ve honed over the years and it’s definitely been something that I think joining Cimpress that the other companies have been really impressed by. We just call it that interlock between marketing and, and production. And clearly a big piece of that is the fact that we’re all right here in Austin, Texas. I think that’s a cool thing.

Yeah. I’d say supply chain’s probably my number one priority right now. It’s been a crazy, call it six to nine months. Essentially earlier this year when, as I’m sure everybody knows when, when the world started to kind of reopen, the supply chain and production facilities probably weren’t ready for it. So probably over the past six months or so, I think every single raw material that we use (and trust me, there’s thousands) has probably seen some type of price increase. A little more devastating actually is stock outs. We have somewhat of an elaborate supply chain and the numerous raw materials we use. And so oftentimes things kind of sneak up on us quickly. We’ve been dealing with, some price or cost increases and stock outs. What we have been doing aggressively over the past six months or so, is ensuring we have secondary and tertiary suppliers for everything we do. We always kind of had it for the major raw materials, but this has basically pushed us to essentially increase that coverage as quickly as possible. Obviously, that’s in an effort to avoid stockouts. But also, if in turn a supplier increases price, we have options there to shift mix to somebody else.

The other thing we’ve done for the holidays specifically is we’ve taken out several thousand square feet of warehouse space to make sure that we’re basically covering every scenario possible. We essentially have enough safety stock to take us through the entire holiday season right now. So we want to make sure we’re prepared for the unexpected, which, my guess is there’s going to be lots of unexpected things this holiday season. So it’s a big deal. We’re dealing with it and are hopefully well prepared.

First we almost double the size of the production the holidays. And we primarily do that through temporary production or seasonal workers who then, if obviously in good standing, have the option to stay on full-time at the end of the holiday season. It’s always a challenge. And on top of that we grow. We’ve been growing every single holiday season, so the numbers get bigger. And the amount of planning and effort gets larger. I feel like every year things get a little tougher. Obviously, it’s a very competitive market within Austin especially for production talent. But one of the things we really try to do at Build A Sign is differentiate based on our culture. We really spent a lot of time on the employee experience, career pathing, etc. And from day one, we want everyone to really feel like they’re part of a team and just not a number. We greet you with a swag bag. We share multiple benefits that we give to every single employee. Weekly free lunches, we subsidize or we basically provide everyone with a credit to our internal market that we have on staff.

Once a quarter, we do a hundred percent, all hands, offsite for the entire company. And we do some really neat stuff. A beach party every year, a family day, the holiday party. So we try to make things really fun and interesting. Career path wise, we really try to practice a promote from within. I think 13 out of 14 of our supervisors right now essentially started on the front lines. Two out of three of our most senior directors in the production space started on the front lines. We create many opportunities cross-functionally. There’s been tons of folks that moved even outside of production to our customer service, to our art review team. We actually just had a production employee join our software dev team. They finished their degree at night, and it’s been great. And as you know, Ed, we’ve put 30 over 35 folks through the ARMA supervisor training course over six or eight weeks. We really try to invest in our folks and make them feel like part of the team. So yeah, it always gets tougher, but we feel like we’ve got to be even more on our game for making a great employee experience.

Yeah, it’s a good question. Maybe the best way to answer that is through some examples, I guess. First, I’ll share that a few years ago, we found ourselves very, very reliant on the manufacturers whenever we had an equipment issue. At the end of the day, no matter what level of service you pay, you’re not going to get somebody there exactly when you need them. When a machine’s down, it’s definitely costing us throughput. And so what we decided was let’s go take our best operators and most mechanically inclined folks on the floor and let’s really invest in them and create our own internal tech team. I think we have about 15 to 20, depending on the seasonal period, of folks and we put them through tons of training. Some of them onsite. We had the manufacturers come and train them, on the basics on brake fixes, etc. and calibrations to the equipment. Some we actually flew to the manufacturers themselves. I think it’s a good intersection of people investing in people, but also investing in automation.

The other thing I’d share is we have entire software dev team that all they’re focused on is improving the operational backend process. Essentially, they have an entire backlog submitted by production. And it’s really interesting when you start to see some of the ideas that bubble up. Tremendous things that folks from my level, or even a lot of the supervisors on the production floor, would never even think about. But once they get implemented, you’re like, wow, look how much cost savings we have, or how much better life is for everybody. And its subtle things, right? We used to have a scheduling board for the jobs that went through for Canvas. Back to what I was saying earlier. It was very critical. You had to know what jobs to send through when that was all done with paper and note cards and little pockets and all this kind of stuff. And someone said, “Hey, what if we digitize this whole thing and we could put it on a touchscreen and move things around?” We launched that about six months ago and we’re now on 110-inch touchscreen and everything’s digitized. And that all came from an idea and then the software dev team’s work in that. And there’s countless things like that. Just even moving a button on a production on a QA screen from one side to the other. It may not seem big, but when you’re doing it 300 times a day that stuff adds up. Or changing the way we nest. Somebody figured out about six months ago that, hey, it looks like we’re kind of wasting about an inch on our canvas roles for every single canvas that goes through. You know, I’ve seen that role go through a million times and it never occurred to me. And you’re like, “Yeah. Why can’t we get rid of that?” Then you multiply the fact that we’re doing millions of these things a year and the cost savings and improved efficiency throughput. So once again, I think it’s a good example of investing in people and making things more efficient, but also improving production and automation.

Well, I can tell you something that we’re seeing real time. First, one thing the pandemic did was accelerate the adoption of e-commerce—this offline to online. Suddenly everybody got a lot more comfortable ordering their groceries or obviously you can see the Amazon numbers from last year and you know, I think the pandemic definitely accelerated that adoption. One of the other things that we’re seeing which once again I think is related to the pandemic is tons of small businesses starting up. Folks that probably sole proprietors that had a hobby or an interest and whether during the pandemic they’re at home and sitting around, or trying to figure out a way to make some extra money, or just pursue a passion. I think when you see numbers out of folks like Shopify and e-commerce platforms, they are through the roof. So just overall, an explosion of smaller businesses typically many being e-commerce based. And then what that means is a lot of these small businesses need to build a brand. Where that then comes in turn to our business is something like packaging. We’re seeing packaging explode. One thing Amazon has shown is there, there’s power in branding your packages. As you know, you see a bunch of brown boxes on your front step, but then you see that Amazon tape and then oftentimes they’re promoting something on the side of the box, etc. So now you’ve got a lot these small businesses doing the same. One of the exciting areas that we’re keeping a close tab on is packaging, for example. And we’re seeing that explode. Once again, I think a lot of this stuff, when you start thinking about building a brand, comes back to marketing and mass customization and printing and all the things we do. So, lots of exciting things going on.

Hopefully, continuing to grow even stronger than we are today. One of the things that really excites me about one of my earlier comments around being part of Cimpress is we were all very excited when the acquisition happened because we have tons of customers that are buying a lot of products, printed, custom printed products, mass custom products, etc. from competitors. And they come to us for signage or certain items. And then they said “Hey, I love you guys. I’d love to buy things from you. But you currently don’t offer business cards even, and all these paper related products, promotional products, etc.” One of the big focuses we have is really adding products to our websites to basically sell to our current customer base and hopefully future ones. It’s just that being part of Cimpress enables us to move so much faster because in the past, if we’re producing that product, as you know, it takes a lot of time and thought and investment to go figure that out. Now, we can go sell products that are being produced by Vistaprint right now and cross-sell those to our customers. So we just see huge opportunity for the future for us to continue to produce our own products, add our own products that are very adjacent to the categories we’re in, but also really make a splash into new categories as well. So everybody’s just very, very excited about the future.