Client: DAP World, Inc. Date: May 11, 2009 Publication: San Fernando Valley Business Journal Circulation: 5,168 Need Quiet? He’s All Ears By Mark Madler - 5/11/2009 San Fernando Valley Business Journal Staff When the name Hearos came to Doug Pick he had just finished having lunch at his father’s house. The moment was like an epiphany but only stronger for the 41-year-old Pick who once dreamed of a career in the music industry but instead found business success with selling inch-long pieces of colored foam favored by light sleepers, musicians and anyone else wanting to protect their hearing. In what could only be described as a fortuitous timing, the trademark for the Hearos name become available just as Pick chose it for his product line. “I’ve made my luck but I’ve been lucky, too,” said Pick, sitting in his home office in Sherman Oaks that serves as the modest headquarters of his company DAP World. Pick owns no manufacturing plants to make the earplugs; employs no workers to put the earplugs into their packaging; no trucks to get his earplugs to top retailers like Wal-Mart and Target. The only full-time employee is himself with a part-timer helping as an assistant. Yet this bare bones operation brought in $5.5 million in sales last year with a projection of a similar figure for 2009. A price of $5 for some packages of earplugs ensures strong sales at a time when other products never leave the shelf. The Sleep Pretty in Pink line directed at women has been the company’s best seller in volume, with 7 million pairs sold since their debut in 2005. Pick has developed other lines for sub-niches within a limited market – earplugs for swimmers and older adults, and those advertised for a Hispanic audience. A key to Pick’s success has been his hands-on approach and calling on retailers personally to distribute the earplugs, said Eric Spitzer, vice president of merchandise for Guitar Center, a long-time seller of the earplugs. New Horizons relationship “He is relentless,” added Doug Cone, the business development manager at New Horizons, a non profit in North Hills. “He is at it all the time; he never stops going.” It could be said that Pick’s success has relied heavily on the relations with New Horizons, whose client base of adults with development disabilities package and ship the DAP World brands. Outsourcing the packaging certainly saves in costs and overhead. There is no worker’s compensation, medical benefits and other issues associated with employees for Pick to deal with. New Horizons started doing the packaging in 1997 but Pick continued to handle the shipping himself to maintain control over meeting schedules for when retailers wanted to receive the product. Cone recalled that it took some time for him to convince Pick that New Horizon could also handle the shipping as the agency does fulfillment for other companies. Giving all the work to New Horizons made more sense as more national chains carried the Hearos line and needed their shipments on time. “It was at a point he could not reach that level without outsourcing,” Cone said. The agency was so appreciative of the work Pick provides 220 clients that he received their Partner in Independence Award, the first customer to receive the honor. Career in records A graduate of USC and a participant in the school’s entrepreneur program, Pick began his business career in children’s marketing at A&M Records, having been hired by label cofounder Jerry Moss. After 2-1/2 year, he left the label to manage a hip hop artist, an experience that turned sour when the promised music never materialized. Pick compared his short stint as a manager to being an adult babysitter. Having been introduced to wearing earplugs for sleeping by his brother, Pick asked a question that entrepreneurs have always asked – is there a better way to market and sell this product. A viability study on selling earplugs resulted in high scores in that it was a consumer product meeting a demand that would never go away; would not have large conglomerates as competition; had low barriers to entry; and no recognized rival brand. Pick’s knowledge about the ear and the science of hearing was self taught. Made by Aero The earplugs are made by Aearo, a division of 3M, from polyurethane foam; a sophisticated sponge the user rolls into a tight cylinder to slip inside the ear canal. The foam cannot expand too quickly inside the ear else it irritates the ear canal. The skin of plugs is smooth and soft to feel comfortable. Packaging design was also self-taught. Pick sat for hours in drug stores looking at how packaging was designed and displayed and how consumers interacted with it. “I would look at what these companies were doing in terms of packaging to make their brands stand out,” Pick said. Those lessons were then used on Hearos and later the other DAP lines. With just seconds to catch the eye of a shopper, the right use of color, words and images were needed to drive the brand name and tell the intended purpose. “It was a very bright, cartoon-type packaging,” said Guitar Center’s Spitzer. “It was very aggressive against the wall.” Hearos have been advertised on MTV, been sold at merchandising stands on Korn and Limp Bizkit tours, and are part of a new campaign on the USC campus encouraging students to videotape their snoring roommates to win a laptop. Next month comes the Hearos Noise Patrol, an iPhone app measuring decibel readings to tell the user when hearing damage starts. There is, of course, a link to purchase Hearos earplugs. All this success did not come overnight for Pick. The Hearos line was the sole focus for more than 10 years. Pick did the packaging himself out of an apartment in Studio City. After that building was deemed unsafe following the Northridge earthquake, he lived with his mother in Sherman Oaks where the garage became the warehouse for DAP World. Pick made missteps along the way. For one, he thought that he would sell millions of the earplugs out of the gate not realizing there was a building up process to get to that number. Other products Pick developed and he was sure would be big sellers – large razor handles, blinders to cut don the glare on computer monitors, a device that alerted (male) users to put the toilet seat down – never reached the level of the earplugs. Reaching that level with what Pick admits is a mundane product came from innovation, customer support and service and the ease that retailers can receive a shipment. It is a point of pride with Pick that he’s never had a backorder and that the price of Hearos is the same as it was in 1993. “It is my goal that when I think of my customers I think of what I can do to make their day easier,” Pick said. SPOTLIGHT DAP World Year Founded: 1992 Revenues in 2006: $3.1 million Revenues in 2008: $5.5 million Employees in 2006: 1 Employees in 2009: 1, plus 1 part time Earplugs: Doug Pick runs his company out of his Sherman Oaks home.
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