Joysticks lead young entrepreneur to business victory

March 03, 1994|By Joel Obermayer | Joel Obermayer,Sun Staff Writer

In February of last year, a buyer for the Target department store chain called Todd S. Hays frantically looking for video game controllers.

The buyer had an ad coming out touting a sale on Sega Enterprise's controllers, but Sega had run out. He needed 28,000 replacements, and he needed them shipped the next day.

"I called the warehouse and told them don't ship to anyone else today," said Mr. Hays, 27, president of Hunt Valley-based video game accessory company STD Electronics (USA) Inc. He cobbled together a shipment of 23,000 and 10,000 more a week later, and bailed the buyer out.

This year, the same buyer came back and ordered 110,000 controllers. "Now he always makes a place for me," Mr. Hays said.

It is that kind of attention to customers that has allowed STD to grow in the three years since Mr. Hays founded it into one of the largest suppliers of video game accessories in the country.

The company, a U.S. subsidiary of Hong Kong company STD Holdings Ltd., has seen its sales soar to more than $20 million in its current fiscal year from $6.6 million in its last fiscal year, which ended in March 1993. The company also has tripled its work force in the past year, to 18 employees.

The company sells such accessories as joysticks, multibutton controller pads and all-weather cases for video game products including Sega Genesis and Nintendo Co.'s Super Nintendo and Game Boy.

STD's products are on the shelves of nearly every chain nationwide that carries video games, including Wal-Mart, Target and Toys R Us.

Mr. Hays combines the business savvy of a seasoned executive with the enthusiasm of a recent college graduate. He said he has gained wide-open access to all of those stores, using the same philosophy that helped him with Target: "Protect the retailer and make him look good and he'll introduce you to others."

Making sales wasn't always so simple, however.

Mr. Hays grew up in an entrepreneurial family. From the age of 13, he sold snow cones every summer with his brother from a series of family-owned outdoor stands in the Baltimore area. Every fall, they converted those stands to sell wreaths and other Christmas items.

Five months after graduating from Pennsylvania State University in 1987, he ended up working for an import-export business called Acemore International Ltd. in Harrisburg, Pa. The company had several projects in Southeast Asia, but the only one that made money was a sideline business importing wireless joysticks to be sold as upgrades for Nintendo and Sega systems.

Mr. Hays said he made contacts with buyers at many of the major retailers, selling them joysticks. "But the problem was our products were so bad I could never see them twice," he said.

When the company fell apart in 1991, Mr. Hays had already decided to stick with the video game business and financed a trip to London to a trade show there. At the show, over a beer at the Hard Rock Cafe, he persuaded an executive with Hong Kong-based STD Holdings Ltd. to give him a chance to start an U.S. distribution company for its video game accessories.

Mr. Hays still had his contacts, and this time he had better products.

John Frankovich, a senior buyer for catalog retailer Best Products Co. Inc., said STD "just came out of nowhere" to become his main supplier of video game accessories.

He said Mr. Hays' first visit to the company's Richmond, Va., headquarters was an unlikely sale. "We rarely take appointments off the street, but this time we took one," he said. "[Todd] had a quality presentation and an attitude of, 'Let's make it happen.' And it did."

Ed Erickson, an electronics buyer for Target Stores in Minneapolis, said Mr. Hays' youth made him hesitate but that his resistance went down after he heard a sales pitch. Mr. Hays "always knows what your objective is and gives you confidence that he's going to deliver," Mr. Erickson said.

After gobbling up market share and knocking off competitors in the field, Mr. Hays is turning his sights on a larger market -- computer game accessories. He said his company's growth in the video game segment is slowing and that the computer game market is potentially three times as big.

This week, he hired a new vice president of marketing so that he could "put the video game area on autopilot."

As he moves into new markets, his customer-based philosophy will follow. "The way you anticipate in computers is the same way we always have in video games -- you talk to retailers, you listen . . . and you figure out how to meet their needs."

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