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Born entrepreneur capitalizes on opportunities
PADMA NAGAPPAN, Special to the Daily Transcript
For someone who got bitten by the entrepreneurial bug at the tender age of 7 -- as a Kool-Aid salesman who zeroed in on the lucrative market of thirsty construction workers in suburban Chicago -- it’s not surprising that the first thing Erik Groset did soon after he graduated was start a new business.
Groset, 26, co-founded Digital Group Audio (DGA), with the aim of perfecting portable sound, when he graduated from California State University, San Marcos with a degree in business.
The company’s first product is Livespeakr, an ultra-portable, multifunctional speaker system made for smart phones, with unique rechargeable lithium-ion batteries that last 10 hours.
Though DGA was launched during the recession two years ago, the audio product has racked up 25,000 units in sales for 2009, a good portion of it through Amazon.com as well as other e-tailers, with minimal marketing. The company is also the No. 1 seller on Amazon.com for portable media player accessories.
“I knew the iPhone was coming out. The only docking station available worked in portrait mode, so we wanted to develop something that worked in both portrait and landscape modes,” said Groset, explaining the idea behind DGA.
The system can be used with a variety of devices, including the iPhone, iPod, Droid, Nexus One and Palm Pre.
The innovative smart phone accessory was responsible for Groset being inducted into the Young Inventors International Hall of Fame.
Groset and his co-founder and friend, Robin DeFay, were hawking the speaker system at the Consumer Electronics Show in Las Vegas when a buyer from Urban Outfitters saw their demonstration and liked it.
The clothing retailer, which also offers unique items, became DGA’s first big client.
Groset and DeFay developed the product internally but contracted out the manufacturing to a Chinese supplier.
“We tried approaching manufacturers directly and quickly realized it wasn’t going to work, so we looked for project managers with experience in Asia. We found someone who said he’d take us to China, but I didn’t have a passport. He told me I could get it in one day by going to the Los Angeles passport office. We stayed in China for six weeks,” he said.
That first trip taught Groset how things worked in China and he got to see how the product was put together and tested.
He had no trepidations about launching a new business during tough times. Instead, he felt strongly that if it could survive the recession, the company could make it through anything.
Groset plans to expand internationally, likely in Europe. He also will explore distribution channels, since he found certain challenges in placing his product in brick and mortar stores.
In September he also plans to launch a second audio product, ZipBuds, which is under wraps for the moment. The product will do away with the frustration of untangling earbud wires.
All he will say about it: “It’s going to change the way you listen to music on the go.”
Nagappan is a San Diego-based freelance business writer.