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Lynnwood company adapts in flash to change

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By Juergen Kneifel
Just how quickly and efficiently a business adapts to change can make all the difference in seizing new business opportunity.
Entrepreneurs are often the ones willing to look beyond the horizon and take on risk as they adapt to a dynamic, ever-changing environment.
Ryan Stutzman is such an entrepreneur. His company, FlashDrivePros.com, was started in a Lynnwood garage and has recently gone global. I wrote about the startup in this column two years ago. The company now operates a small repair shop in Seattle and has expanded to serve customers with locations in Europe and Asia.
What started out as a business that recovered data from broken and defective flash drives has blossomed into a retail enterprise with services that include moving to secured data storage using cloud technology.
"We're constantly experimenting with new products and services. In addition to data recovery service, we also sell our own data recovery software, backup software, and high-speed flash drives. One opportunity on the horizon for FDP is cloud storage services. We're currently developing a cloud storage platform that includes the security and accessibility benefits of traditional flash drives," Stutzman said.
Perhaps flash drives won't be around forever, and so the need to find value for customers is what will keep a business relevant. In marketing, we refer to this as the unique selling proposition.
Change can also have catastrophic impacts on a business. When FlashDrivePros.com started out, nearly all of the business was coming through their established online presence, and well over 90 percent of the work came through Google AdWords, a paid service to establish a high priority position for customer searches.
In February 2011, the company experienced a 50 percent drop in sales as Google implemented a new algorithm that caused the FlashDrivePros website to get lost in the crowd. The company's customer acquisition strategy was far too reliant on this primary source.
Today, things are more balanced. "We're always working on becoming less reliant on search engines. Search engines currently account for about half of our new customers. The rest come from word of mouth and a growing number of contracts we have with other data recovery labs and computer repair shops around the country," Stutzman said.
In any business enterprise, you're only able to grow as you diversify your customer base. The original business model of the company served exclusively as business-to-customer. Expanding its market presence to include business-to-business sales allowed FlashDrivePros to grow its volume and establish stable workflows.
Equally important for a business experiencing rapid change in the market is to keep the competition in check. There is always a danger in saturating the market, which will drive down the prices and also make it far more costly for a business to acquire new customers.
"There are definitely a lot of companies doing data recovery and the overall data recovery market is fairly saturated. However, very few data recovery companies have the tools and experience to recovery data from solid state memory. So right now I'm happy to say we actually own a large majority of the market for solid-state data recovery," Stutzman said.
It's important to consider change as a fundamental strategic priority when you are an entrepreneur.
"Finding better, faster, cheaper solutions to customers' problems is really the catalyst behind everything we do at FlashDrivePros. This is what being an entrepreneur is all about."
He added, "Profitability and growth are necessary and encouraging, but for me they are simply indicators that we're doing the right things. Building products and services that are so great that several people per week will actually call or email you to say thanks is great motivation to keep trying to make even better products and services. So that's what we do."
Stutzman provided a peek at the future of secured data storage.
Starting in September, data recovery clients will have the option of having their files uploaded and delivered via their own cloud storage account that includes server-side encryption and an option to synchronize their data with a traditional flash drive.
A demo version of the service is available at cloud.angelsync.com (username: demo, password: demo).
While the rapid change in technology may create obsolescence for some products or services, I personally still find comfort in carrying my memory stick. Remembering that not so long ago, I was inserting a floppy disk into my old computer.

Juergen Kneifel is a senior associate faculty member in the Everett Community College business program. Please send your comments to entrepreneurship@everettcc.edu.

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