Episode 29: How Custom Solutions Leads to Long Term Customers for Marlin Technologies
Adam Honig: I’m going to introduce you and say that you’re the Director of Sales and Marketing of Marlin Technologies, is that still the right title to use?
Lloyd Brown: As of this morning anyway.
Adam Honig: All right, good. Well, I haven’t checked in with anybody at the home office, so just wanted to know.
Lloyd Brown: But I have silence notifications, so you never know.
Adam Honig: Exactly!
Hello, and welcome to “Make It. Move It. Sell It.” on this podcast. I talk with company leaders about how they’re modernizing the business of making, moving, and selling products, and of course, having fun along the way.
I’m your host, Adam Honig, the CEO of Spiro.ai. We make amazing AI software for companies in the supply chain, but we’re not talking about that today.
Instead, we’re talking to Lloyd Brown, Director of Sales and Marketing of Marlin Technologies, which, if you ask me, is probably the best maker of custom-designed electronic control systems for nearly any severe-duty application. Welcome to the podcast, Lloyd!
Lloyd Brown: Thanks for having me, Adam. Now, after that intro, I’m going to have to find a way to send you a free drink or something.
Adam Honig: Wow! Well, what I really need is a free OEM control solution. Tell me a little bit about that. When I think about OEM controls, I’m thinking about things that control machinery or…
Lloyd Brown: That’s exactly it. Marlin has been around for a long time since electronics were invented. We make custom electronics for what we generally refer to as “off-highway vehicles.” So, that means construction vehicles, agricultural machinery, and large turf care things—not like the lawnmower that any of us might have in our garage, but something that cuts a fairway, cuts a city park, or things like that.
All those types of machines need electronics to control them. They’re going to be turning motors and hydraulics on and off with actuations. Now that things are becoming electrified, there’s a lot more electrification. We are doing the electronic controls for those types of machines.
Adam Honig: Why not the highway? This is just like anything that goes too fast; you’re not suited for it.
Lloyd Brown: We can go really, really fast, but in an off-highway manner. How’s that for a response?
On highway is a different kettle of fish. So that’s what’s going to be sold to Ford, GM, Mercedes, and BMW. And that comes with a whole different set of requirements.
That’s a different bucket. We’re more off-highway, which is regulated somewhat differently and has much more of a focus on severe duty. When we talk about severe-duty environments, we’re talking about harsh environments. So, very hot, very cold, very dirty, very dusty, often wet—just really challenging things for electronics to perform in.
Adam Honig: I was talking to the guy whose company makes mining equipment. I’m not sure exactly what they’re called, but like a little device that you drive into the mine and it kind of drills stuff and pulls it out. So that’s the type of application that you guys focus on.
Lloyd Brown: We would do things like that. We don’t do a huge amount in mining, but any of those kinds of vehicles would be the right kind of thing. So if you have a dump truck of any size, our electronics might be the switch that the operator is touching or interacting with to raise the bucket or the truck itself, and then we are turning on the hydraulics or however that’s going to be actuated.
Adam Honig: The important part of the dump truck is actually doing the dumping in this particular case.
Lloyd Brown: Doing the dumping. Yes, not the boring driving.
Adam Honig: Yeah. It’s so funny. My daughter really wants to ride on a dump truck. She’s in middle school. She’s not a little girl anymore, but she’s always had this thing for that. I don’t know. There’s something about the movement, or just one of those things.
Lloyd Brown: Some fathers have to buy a pony. You have to buy a dump truck.
Adam Honig: I guess so. If I go down to the sanitation department and give the guy a couple of bucks, can I make that happen? I don’t know. I haven’t tried it yet.
Lloyd Brown: Outstanding.
Adam Honig: When you think about your business and the types of applications that you do, what’s the most unusual type of vehicle or device that you’ve seen your customers use your technology in?
Lloyd Brown: We’ve had a pretty wide range. There are agricultural implements that I was unfamiliar with until I started working at Marlin. So, there’s some weird stuff there. We don’t do a lot of image marketing on our electronics that go on to things like manure spreaders and things like that. But we do that.
But we were also recently approached by a company making a very innovative, extremely high-speed race car that needed a control solution for some things. It wasn’t really in the driving part or some auxiliary systems, and we all came to the same conclusion, whether it was me or engineers or whatever, and we said, “We’ll do this project for free.” If we just need one of their prototypes for about a year, that would be fine.
Adam Honig: Wow! That’s amazing! Do you guys do any work in cranes?
Lloyd Brown: We do quite a bit in the construction industry. The big, exotic vehicles are always interesting. So, cranes are great. That’s actually a really good application, but people aren’t making large quantities of cranes. If you go to a Manitowoc or Link-Belt or whatever, they’re measuring their throughput in dozens, and electronics certainly are not free, but they’re not super expensive either. So we tend to skew more toward things like skid steers and telehandlers and things like that, where there’s a little bit more volume.
Adam Honig: No, that’s right. We had a guest on the podcast who makes the crane that lowers the ball at New Year’s Eve in New York City.
Lloyd Brown: That’s very cool.
Adam Honig: Yeah. Super cool, but they make one of them. So, that’s not going to be a good sale. So we have to go to other people.
Lloyd Brown: Well, you got to charge a lot for that kind of crane.
Adam Honig: Yeah, exactly.
Tell me a little bit about acquiring new customers in this space? What are the challenges in that world?
Lloyd Brown: Yeah. Fortunately, we’ve been in these spaces for quite some time, for several decades. The current ownership family has had the company for about 25 years. So that’s great. We have a good set of customers in those spaces, and very often engineers leave from one construction company to a different construction company.
We do get quite a bit of word of mouth, but as we define our maybe top 6, 8, 10 market sectors, or segments, we basically go through just general marketing research to figure out who else is making similar products, who’s in those markets, and who we want to approach.
So I wouldn’t say that it is a super organized account-based marketing approach, but it’s in that direction. If we’ve got 10 construction companies and we want to add another 5, we can come up with a list of 25 to try to get to that 5.
Adam Honig: Is it a very competitive space where there’s a lot of competition?
Lloyd Brown: It is. I mean, it’s a big space. There are some large manufacturers who make similar things, but when you really peel the onion away a little bit, each manufacturer is a little bit different. But we’re competing against some large companies, some global, and people with more zeros after their sales figures than ours. But with that said, because of our size and because we’re a small company, we are able to deliver a very high level of service and custom engineering. If you visit our website, you’ll see some stock products, and that’s great. We’re building out that line of stock products. So those are “off-the shelf” products.
With that said, the vast majority of our business is custom. So in other words, somebody might start with a stock product; they might have a stock controller or a keypad, or what have you, and they say, “Well, yeah, that’s close, but that’s not exactly what I need.” And then our electrical engineering guys will get involved and design a custom circuit board, and we’ll get into our own manufacturing to make that.
Adam Honig: It sounds like once you make a custom solution for somebody and it’s working well and they’re happy with it, that really kind of cements them in because they’d have to go and kind of reinvent that. Is that the case?
Lloyd Brown: It’s fairly sticky. Yeah. I mean, it’s not impossible to change. That, of course, informs how we acquire new customers, right? So, if our solutions are sticky, so are the other guys. So, we’ve got to build the right relationships so that people have the right confidence to make that kind of change.
But yeah, it’s fairly unusual, midstream, mid-production, for someone to make a change. In other words, I’m tired of Company A’s product. I’m going to go to Company B. That doesn’t happen too often. But we’re here in late 2023; the last 3 years of supply chain, pandemic, and posts have been a real handful in electronics. That has resulted in more opportunities coming our way from companies that cannot source what they were trying to source from some of our competitors.
Adam Honig: That’s interesting. They were coming to you because they couldn’t get supplies from other people. It opens up the door.
I was talking with one of our customers in the fabric business, and that was exactly for them, but they’ve seen a bit of erosion with that kind of customer base too, so they started just going back to buying from people that they were buying from before the pandemic. Have you seen that kind of challenge?
Lloyd Brown: I wouldn’t say that per se. What we see more of is all the supply chain disruptions that have happened in the last few years—the kind of disruptions that we’d see things on television of—acres and acres of Ford’s brand new F-150s that were 99% complete, but they couldn’t ship because it was an electronic something or other that they couldn’t get.
Even luxury cars, all of a sudden this year, are not available with heated seats because they can’t get the circuit board, the chip, the semiconductor, or whatever. Those are the kinds of things that we see supply chain constraints on, and that’s true for us. It’s true for our competitors. So, it becomes a little bit of a free for all. Those are not the kinds of semiconductors that are being addressed, like in the Chip Act and things like that. That’s more on the really high-level processing. Our products are going into industrial machines.
The semiconductors are really, really good at what they do, but they’re fairly simple. They’re generally fairly inexpensive. Dealing with that kind of supply constraint has been a handful. We have not seen companies come to us or maybe go back to where they were 5 years ago. Not really. It’s more of an opportunity that is being presented because they’re just unable to get the finished product from their suppliers.
Adam Honig: What about on your own supply side? Have you seen lead times going longer for delivery for your business, or how has that been working?
Lloyd Brown: Yeah, it’s been crazy. Over the last several years, the supply chain base for electronic components has changed. These are the tiny little components that go on circuit boards. In the end, at Marlin, we manufacture circuit boards. We’re buying all these little transistors and other things that are going to go on boards.
We typically work with normal times, pre-COVID; lead times range anywhere from 12 to 52 weeks. We are having to buy raw materials in advance of firm orders from our customers. So forecasting becomes quite important. During those last few years, sometimes those lead times can go out to be a year, two years, or even longer.
We went through periods of time where we had orders that had been in place for 18 months, and we’re supposed to receive 10,000 units of something from a supplier 2 weeks from now. Then they say, “Yeah, we’ve pushed that out for 8 months, and we’ll talk to you in 8 months.” or “We see things that are; we’re no longer going to make that version; we’re going to end-of-life that version, but we have a new one for you.” “Great! Let’s show me the new one.” Of course, it’s never exactly the same. It’s just different.
Adam Honig: And it’s probably not the same price as well.
Lloyd Brown: That is a challenging question, but even more impactful is that that new one isn’t available for a year and a half. Meanwhile, people still want to make skid steers, combines, and things like that.
Adam Honig: No, they got to keep their business going. Sure.
Lloyd Brown: Our supply chain team has done a phenomenal job of going shopping. We’ve had to hit the third-party or broker market with some frequency, and that has caused a lot of disruption and pain, but we’ve made our way through it. And I think we have overall done a fairly solid job of keeping our customers running, which is one of the things that we do.
Adam Honig: Yeah. No, that’s awesome. Now, I know you said you were a recovering chemical engineer. I’m just curious. Do you feel like that gives you a different perspective on the technical side of the business? I know you’ve been in sales for your career, but…
Lloyd Brown: Mostly. Yeah. Having an engineering background is helpful. And I have been around technical stuff most of my career. So, it’s helpful to understand the applications a bit more. Leading sales and marketing, it’s better for me not to be an electrical engineer because there’s no risk of me being dragged into the technology because that’s not… so that kind of helps keep me in my lane a little bit.
Adam Honig: What’s your advice for people who are in college and thinking about getting into the manufacturing space? Do you feel like even in sales, it’s good to have that engineering background? Or how do you think about that?
Lloyd Brown: Yeah, I think it is. I don’t think it’s a requirement, but in the technical industry, when you’re making a technical product, the more technical you are, the easier you can relate. Even if the technology you’re familiar with is somewhat different, at least you kind of get the DNA of what the customers are thinking. What kind of questions come next, and maybe some of the vocabulary gets a little bit better? So that’s helpful.
It’s not a requirement. We’re growing and are right now trying to hire another field sales engineer, but that person doesn’t need to be an engineer. It’s helpful if they are, but they don’t have to be.
Adam Honig: Right. I know I studied philosophy at college. My dad was very disappointed. He wanted me to be in engineering, but I was like, no, no, I want to be in the world of ideas, but later, kind of being in the technical software space, I’ve often thought, “Wow! I wonder if that would have been a good choice, Dad. “I don’t know…
Lloyd Brown: Seems like it’s worked out, okay.
Adam Honig: Well, no complaints, right?
Let’s shift gears for a second. I want to hear a little bit about the production side of the business. I’ve been talking with a lot of people, and sort of the trend that we’ve been hearing is about more and more production coming back to the United States, but you guys have always manufactured in the US, right?
Lloyd Brown: Yeah, we never left. As I said, we’re a small company. We have one factory. It’s in the city of Horicon, Wisconsin, which is more famous for its marsh and duck hunting, which is a seasonal thing right now, but Horicon is a small community with several thousand people, equidistant between Milwaukee, Madison, and Green Bay. That’s where we’ve always been. It’s a great place to be. We have real, terrific people to draw on to work in the factory. We have had a fairly long 10 years, which is not unusual. There are two people on our team who have celebrated 35 years in the company. That’s pretty cool.
It’s a great place. We’ve been happy to manufacture here. We’re not looking at giant volumes. If you find the biggest of the big OEMs, I wouldn’t name them because it’s not like I wouldn’t talk to them, but that’s not always the best fit because they’re going to go for a different set of characteristics from their supplier than what we offer.
We’re generally offering really excellent engineered solutions. A lot of times it’s custom, a lot of innovation, and it can be a pretty modest volume still makes the cut for us. With that value added, we’re able to really be happy manufacturing in the US because it shaves some of our lead times, and our time to market is a little bit shorter, I should say.
The other part that’s great is that we have a modest-size engineering team. We’ve probably got 15 to 20 percent of our company’s employees who are engineers doing engineering work. They’re designing it one day, maybe in our innovation center, which is closer to Milwaukee because we have better access to talent pools that way.
But then the next day they’re driving 40 minutes up the road to Horicon, and they’re on the floor while their stuff’s being run, and they’re really seeing how it goes. So, it’s a really nice balance, and that would be harder to do if we were overseas.
Adam Honig: Yeah. No, that makes a lot of sense. A lot of people have been on the podcast talking about some of the challenges with hiring as sort of a trade-off, especially for whatever reason, manufacturing doesn’t seem to be like the top destination for a lot of people. How do you guys try to overcome that?
Lloyd Brown: We have a great employee experience; I guess that is the best way to put it. We have a really good, transparent relationship between the owner and everybody in the company. So, he’s just awesome in terms of the fact that you can ask him anything; he’ll answer straight up, and there’s no baloney in his answer whatsoever.
So, that’s really cool. The employees are treated really, really well. In a small company, we all know their names. There’s one lunchroom, and that’s generally where you have lunch. It’s very personal, so it’s a good experience. There are times when we’re super busy and the shop floor is working a great deal.
They’ve worked a lot this year, as we’ve been growing quite fast. We do struggle with hiring like everyone else does, but I will say that in the last 6 months, we’ve done better, and I think one of the ways we’ve done better is by competing with a fairly finite number of other manufacturers in our geography.
Some of them do pay more than we do. But the quality of employment experience isn’t the same either. So there’s a little more flexibility. It’s just a cool place to be, and sometimes the take-home pay isn’t the whole story. For a small company, we have really good benefits; we just treat people really well.
Adam Honig: I’m hearing something that kind of resonates with me: that the family that’s owning the business is very involved and very hands-on. That probably gives people a sense of connectedness, and that’s really helpful.
Lloyd Brown: Yeah. Exactly. In 2022, it went from one generation to the next. Father sold the company to his son, who’s John Lichtenberg. He’s my boss and he’s just awesome.
Adam Honig: Did he give him a good deal when he sold the business or Steve, it was like, I don’t know, it’s not quite high enough, we got to…
Lloyd Brown: I’ve only been here a few years, so I’m still working on getting all the way in Adam to ask that question, but I think it’s pretty okay.
John’s been in the business for like 12 years as a commercial leader, but he really has a finance background. He’s in a great spot to run the company, and he’s got the right relationships in place internally and externally. So, it’s pretty cool.
Adam Honig: Right on. LLloyd, I really appreciate your coming on the podcast. This has been awesome.
Lloyd Brown: Thanks for having me, Adam. It’s a pleasure to be here.
Adam Honig: Yeah, no, it’s so great. I mean, now, I’m going to be looking at all of these different pieces of equipment that I see around, like dump trucks and lawnmowers, and thinking, “Huh, I wonder if any of LLloyd’s products are in there.”
Lloyd Brown: I know a guy. Yeah, right!
Adam Honig: Exactly. I tell my daughter, she’s going to be super impressed.
But just as a reminder for our listeners, you can find every episode of the Make It, Move It, Sell It podcast at spiro.ai/podcast. And if you thought LLloyd and I had a good conversation, feel free to give us a good rating or maybe subscribe. I don’t know, LLloyd, would you recommend, people do that?
Lloyd Brown: Wholeheartedly, of course.
Adam Honig: Excellent. Of course, when you do that, you help other people find the podcast, so we really appreciate it.
Thanks everybody for tuning in, and we look forward to speaking to you at the next episode.