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Company man in an unlikely place
Far from being a corporate drone, Doug Gibbs develops companies and their products
Gibbs Group LLC isn't your average business in the Yuba-Sutter area. It's not a retailer or a wholesaler. It has nothing directly to do with farming or forestry or construction or automobile repair. The essence of its business, strictly speaking, is not in manufacturing things like plywood or mobile homes.
It's the kind of business one would think of as inhabiting some sleek office building in a place like Santa Clara or Irvine or an expansive college town like Boulder, Colo., or Austin, Texas.
Doug Gibbs, partner in Gibbs Group, described his business: "We specialize in starting and running small companies and getting them over the crucial first four years of business. We get the machine working and functioning well, then hand it over to the client."
Gibbs Group deals in ideas and business relationships. Along with launching companies, it helps develop products for companies — and when there's no one else to make something and sell it, it becomes the manufacturer and seller itself.
You wouldn't know this from the company's modest, nondescript building on Shasta Street on the edge of downtown Yuba City. Under a shingled roof, with "Gibbs Group, LLC" painted on the glass door in front, the premises could easily pass for a small-town insurance firm or law office.
But step inside and you see the fruits of its labor, which are the things that fill the shelves and racks of Costco, AutoZone, Ace Hardware, Petsmart, Lowe's and other places selling the "stuff" of the American retail experience. In the Gibbs Group office, you can peruse retail displays of a line of hand tools and of Orange County Choppers gear for pets — but the household tools and OCC items aren't for sale; they're for showing off the firm's work. There's also a Patagonia jacket on a mannequin and various products in cardboard and cellophane retail packaging.
Gibbs Group developed its Generation Tools line, which includes everything from adjustable wrenches and carpenter's levels to trowels and pipe shears, after one of its salesmen heard retailers lamenting that there was no unified tool line that they could offer — tape measures had a different color scheme than bolt cutters which didn't color-coordinate with garden spades. Gibbs realized there was a niche to fill and decided to develop a matching line of tools.
How did a company that had never made tools manage to develop, manufacture and sell its own line of products? Some of the tools were of their own design, such as the LumiKNIFE. Other pieces were licensed from the patent holders. Still other tools were high-volume, nonpatented items — such as rakes — that they procured from existing suppliers but which were manufactured to Gibbs Group's specifications, such as color and weight, put under its quality-control standards, and sold under the brand. Add in Gibbs Group's connections with manufacturers and business experience in marketing and supply — and Generation Tools was born.
One of the licensed Generation Tools items is the SquareONE, a palm-held triangle that comprises a tape measure, level, square and writing surface. An inventor in Napa came up with the design, Gibbs turned his idea into a real product, and now the inventor gets royalties for it.
The LumiKNIFE, a hobby knife with a spotlight, was designed by Gibbs himself. Gibbs recalled recently that he was "sick of X-ACTO knives rolling off the table and the blades falling out," so he set out to "build a better mousetrap." He said he came up with the LumiKNIFE design, for which Gibbs owns the patent, during an 18-hour flight to Shanghai.
Generation Tools, which currently has 112 items under the brand, is the only company that Gibbs Group runs as its own and has not sold off. However, it's just one part of Gibbs Group's action.
Last year, Gibbs Group won the contract to develop a line of pet gear for Orange County Choppers.
Among the products that Gibbs developed for OCC are chew toys, collars, dog clothing — including a leather biker jacket — and dog bowls. Each piece had to be painstakingly designed by Gibbs Group, then approved by Orange County Choppers.
The signature chew toy is a 12-inch-tall likeness, complete with tattoos and droopy gray mustache, of Paul Teutul Sr. ("Paul Sr."), the patriarch of Orange County Choppers made a celebrity by the TLC cable channel's "American Choppers" reality series.
In developing the Paul Sr. chew toy, Gibbs Group had to come up with sketches of the item on a computer, then have a modeler execute it in 3-D. The first prototype of his likeness, according to Paul Sr., looked too fat and thus was rejected. The second prototype, in perhaps a bit of overcorrection, was nixed by Paul Sr. as too skinny. The third prototype was close, but not quite svelte enough. Finally, the fourth time was a charm, getting Paul Sr.'s approval.
Each chew-toy prototype, made by a modeling firm in China, cost Gibbs Group "thousands of dollars." And that's just one item of the 50 products the company designed for Orange County Choppers.
Connections and a good reputation are key in business, and Gibbs Group benefited from both when it was chosen to collaborate with sports apparel company Patagonia Inc. Gibbs knew both its owner, Yvon Chouinard, and the CEO at the time, Michael Crooke, and Gibbs feels his firm's reputation in the apparel field put its name in the mix when Patagonia was seeking a partner in developing a stitchless seam design.
With Gibbs and the Ventura-based Patagonia working together, they came up with a revolutionary alternative to traditional sewing: using a laser to affix clothing seams instead of thread. The process was used on Patagonia's waterproof soft-shell jackets, which won the Gear of the Year award from Outside magazine in 2003.
Also on display in the Gibbs Group office are Pavlov's Cat, a scratch post/food dispenser contraption for cats; the PEK Wine Steward, a wine preservation apparatus that uses argon gas as a sealant; and the Table Tote, a collapsible mini-table on which one can use a laptop computer and carry anywhere. Gibbs Group either developed the products or helped inventors turn their ideas into a retail reality.
Gibbs says he's handed off 50 companies and developed 500 consumer products and his firm holds 13 patents.
His ventures start with an idea — his or someone else's — be it, for example, the LumiKNIFE, the SquareONE or the ZooJet, a hand-held device that disintegrates and deodorizes dog waste.
"How can you make a living from your idea — that's the key. You think, 'If only someone did this ...'" and find a salable product, he said.
Gibbs said he asks wholesale buyers, "What do you need to buy?" rather than "How many do you want to buy?" This philosophy was behind, for instance, the creation of the Generation Tools line.
In conversation, the 52-year-old Gibbs throws out ideas and business knowledge left and right.
"We cracked the code," he said, referring to the process of starting up companies and bringing products to market. He said that when most companies discover the "secret" of success, they keep it to themselves. But Gibbs Group will share it with would-be entrepreneurs and inventors with an idea — for a fee.
"We learned how to optimize. We figured out how to reduce investment and speed market entry," said Gibbs. "It's the key whether it's for General Motors or a business that makes tacos."
Starting a company and selling widgets requires more than just hiring someone to stamp them out on an assembly line.
With a startup, there are legal, patent, financing, insurance, pricing, marketing, supply and sales issues, said Gibbs. "How do you learn small business? Where do you go? There's your grandfather, school, college ... and hard knocks, of course, but if you strike out too many times — you're homeless. We found a process that mitigates risk."
Gibbs wrote up four categories on a whiteboard: Idea; Financing; Product design and marketing; and Retail presence.
He explained that you can spend too much time or money on any one of the four parts, and in the end the business is only as good as the weakest link. You may have a great idea for a product, but no way to turn it into reality. You can have a lot of investment, but it won't do you any good unless you have a good finished product. You can have a good product and great marketing — but poor retail presence due to inadequate distribution. You could have retail presence but a poor product or inadequate marketing.
The consummate entrepreneur said he learned the code through hard-fought experience and that Gibbs Group is a pioneer in RTM (Rapid Time to Market) methods.
"Our claim to fame is retail penetration and the speed in which we get ideas and products to market," he said.
In the end, it's all about getting products into stores, explained Gibbs, which is done by participating in trade shows, working with wholesale buyers, and building a supply chain.
Gibbs thinks the days of massive corporations like GM and coddled lifetime employment are over. He believes the future is with small, agile, flexible companies like his, which can make decisions quickly, change directions on a dime, and have more efficient economies.
Gibbs said his firm won the Orange County Choppers contract over a large conglomerate because Gibbs Group was able to do the same things, or better, for a lower cost because Gibbs Group is lean and unencumbered by bureaucracy.
"He's very energetic. His mind is clicking constantly. He's a really smart guy and he's very creative," said Linda Plummer, whose a-d agency has done branding work for Gibbs, in particular designing the logo and packaging for Generation Tools. Plummer is the creative director of the a-d agency, a marketing firm which is a sister company of the Appeal-Democrat.
Gibbs is from Asbury Park, N.J., the hometown of Bruce Springsteen — one of Gibbs' brothers was a classmate of the rock legend — and earned a bachelor's degree in mechanical engineering from Syracuse University. After graduation, he moved to California and worked for 10 years at Hewlett-Packard in product research and development. In 1988, he became director of engineering for Yakima Products, a maker of luggage and sports-equipment carriers for vehicles then based in Arcata.
In 1990, Gibbs went into business for himself, partnering with his brother Andy and relocating to Yuba City to establish SportRack Systems. SportRack designs and manufactures OEM sport roof-racks and luggage carriers for cars, including those of General Motors, Chrysler, Mercedes and Toyota. It received the Supplier of the Year award from GM in 1999.
Why did the Brothers Gibbs come to Yuba City to set up the business? Doug was in Arcata; Andy was in Silicon Valley. They wanted somewhere "in between," with easy access to an airport and major cities, a good quality of life and low cost of living, and also proximity to the outdoors. Ultimately, they were sold on Yuba City by John Whiteman, Yuba City's director of economic development at the time, whom Andy had met at a job fair in Santa Clara.
The brothers sold SportRack, which has more than $400 million in revenue annually, to Masco Corp. in 1992.
In 1999, Doug joined Gibbs Group, which Andy had founded years earlier but which had gone dormant. Andy subsequently left the revitalized Gibbs Group to start his own software development firm in Sacramento.
Gibbs Group usually carries about six employees, including engineers, designers and project managers, but it can vary from four to 20, depending on how many projects are going on and what personnel they need to carry them out. Gibbs Group also has an office in China set up as a joint venture.
As it is a privately-held company, Gibbs declined to disclose the firm's revenue figures.
Doug Gibbs' wife, Cyndi, is a managing partner in the business with a majority stake and is involved on a daily basis. They have three children, the youngest a sophomore at River Valley High School. Doug will be teaching a course in global entrepreneurship at Yuba College this fall. He also serves on the boards of Sutter Community Bank and the Yuba City Downtown Business Association.
Gibbs has put down roots in Yuba-Sutter and tries to utilize local resources whenever possible. He's used the a-d agency and other local graphics designers for logos and packaging for products. Although the Generation Tools items are mostly made in China, the Generation Tools plumb guide as well as the ZooJet are manufactured in Yuba City.
Perhaps Gibbs Group's biggest local success is No-Toil Industries. In the mid-1990s, No-Toil founder Bob Jensen approached Gibbs for help in developing a biodegradable oil to avoid the mess and environmental problem created by the cleaning of filters for motocross bikes.
Gibbs and Jensen developed a nonpetroleum-based, biodegradable oil; a nontoxic, solvent-free cleaner; and biodegradable filter that revolutionized the motocross world. No-Toil, based on Harter Road in Yuba City, has extended its products to cover all engines that use foam filters, including those in cars, to become a recognized name with distribution around the world.
"(Gibbs) helped get our product patented and helped us with marketing and got us up and running," said Scott Oakes, president of No-Toil. "He's a good businessman. He's one of those guys who knows what he's doing ... smart, educated, great personality, and he's got that drive that not all people have to get the products out there."
Ever on the lookout for another deal and another product to develop, Gibbs is currently working on a flat-proof tire design for off-road use. He said it may be his biggest project yet.
Contact Appeal reporter Mike Hatamiya at 741-2400 or email@example.com