How did Ross Video Experience 21 Consecutive Years of Growth?

By Bruce Firestone | Business Coaching

Nov 13
[This article originally appeared in Ottawa Business Journal in March 2012, http://www.obj.ca/bruce-firestone]

The sky is falling, the sky is… Many
observers of Ottawa’s
tech scene seem to think it’s the end of Silicon Valley North but try telling
that to David Ross, 90% owner of Ross Video. The other 10% is owned by family
and an ESOP (Employee Stock Ownership Plan).

“Tech unemployment in Ottawa is something like 2.2%,”
athletic-looking, 40-something, father of two teenage girls Mr. Ross says. “So,
it’s hard to hire in Ottawa—it takes longer. But we are building one of the
best companies in the world, so they want to come here. I mean we grew revenues
by 47% last year and invest 23% of sales in R&D, where else can you go where
they do that?” David is a Waterloo-trained computer engineer.

Ross Video has a 100,000-square foot plant
in Iroquois, Ontario where they manufacture many of the company’s products. The
real estate is owned by them as well. Their HQ on Auriga Drive in the south end of Ottawa is rented accommodation as is their newly acquired Kanata location—they
bought the old Norpak company and are using its premises for an overall
workforce that has now grown to 406 employees. They had just 25 in 1991. They
use Norpak technology to embed information into broadcast streams, so they know
what people are watching. Nielsen uses their system to produce its TV ratings.

Last year they hired 100 people and plan to
add the same number this year (they signed up 50 new people in February alone).
They do all their manufacturing in-house and currently have about 160 engineers
on staff.

David won’t disclose sales but given that
many of their products are expensive devices like robotic cameras, it’s safe to
say they are north of $100 million. That division, now called Ross Robotics is
based in Belgium; they recently
bought a company there which together with one they purchased in Melbourne, Australia
(which does video routing—like an old telephone switch only for video) gives
the business a broad international reach. Another company purchased in the Netherlands in
2009 forms the foundation for Ross Europe. David wants to be more like Apple
than Wal-Mart—sell high end gear with a great brand for top end prices to a
diverse group of customers in many geographic markets instead of everyday low
prices…

If you watched the Grammys this year or the
Academy Awards, all the titles you see on screen are produced by Ross Video
products, software and services. ABC recently bought 3,000 of their video and
audio cards to move video between their buildings via fibre. Ross Video has
mastered the art and science of analogue to digital to fibre transmission. A
lot of ex-JDSU engineers work there. All this is to say that despite some
competition from Japan
(mainly Sony) and some from Brits as well, Ross Video gear finds its way into pretty
much every nook and cranny of the broadcast industry.

Companies like JVC (and 29 others) act as
resellers for Ross Video—they plug Ross Video gear (like some of their smaller
video switches) into their systems while slapping their own label on it.

In just three days at the 2011 National
Association of Broadcasters show in Las
Vegas, Ross Video sold 63 Carbonite switchers for $40k
each. That’s like a car dealer selling 63 cars on a long weekend. They showed
it as a prototype, discussed delivery dates then shipped early. They’ve now
sold over 1,000 of these switchers.

Their video servers are like home PVRs on
steroids and are for professional use by broadcasters and stadiums. They are also
widely used by major acts like the Police, Bruce Springsteen and Rush. They are
on the ISS (International Space Station) too where their equipment converts
video from analogue to digital, so it can be broadcast terrestrially. More down
to Earth, they make automated production control systems that allow one person
with a mouse to produce a live newscast that used to take a room of people to
do. 200 TV stations have gone to air with it including Diane Sawyer on ABC and
Good Morning America as well.

Mr. Ross is majority owner, President and
CEO, Chairman of the Board. He was even CTO but had to give that up in 2011.
Ross Video was started by his Dad, John, in 1974 with $3,500 which he raised by
selling his plane. They have never taken a dime of Angel or VC money. There
haven’t been any layoffs at the company either which has experienced 21
consecutive years of growth.

David does not want to be like RIM which
basically has one product—the Blackberry. “It’s too easy to knock off,” he
says. “Look we sell high complexity, low volume stuff with a lot of customer
support and service. It’s not something that the Chinese do, at least not yet,
so we’re safe for now. With our robotic cameras you can get shots that were
never possible before, you can capture the whole production to an accuracy of
one in a million. Try that with a human-held camera!” he adds with a boyish
enthusiasm for all things Buck Rogers’ish.

Next up is So You Think You Can Dance and
there are other fields to conquer—they are not yet doing any work with CNN but,
closer to home, they are redoing Scotiabank
Place’s infrastructure so that the Senators will
be able to drive their new digital high def screen to the max. “You haven’t
seen anything yet, Sens fans,” David says.

Probably his biggest challenge came when
they went from 50 employees and one building to more than one location. “Hey,
when you are a small company with one plant, the CEO can control pretty much
everything by wandering around. But when you get to two buildings and 80
people, it’s horrible. Quality went down the sewer.”

So one day, in about 20 minutes, an angry
David wrote down the opposite of everything they were doing which became the
basis for their code of ethics and conduct. It is the basis for their corporate
culture and, after that, things improved. Why I ask?

“That code allowed people to self correct.
Instead of needing to hear from me or their manager, all they had to do was
refer to the code. Is this consistent with our code or not? If not, don’t do
it. Our organization completely changed—it became a learning one with high
quality standards and products again.”

Professor Bruce M. Firestone is entrepreneurship
ambassador for the University
of Ottawa’s Telfer School
of Management; founder of the Ottawa Senators; executive director of
Exploriem.org and a broker at Century 21 Explorer Realty. Follow him on Twitter
@ProfBruce

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