It’s likely to be a big autumn for Pioneering Technologies Corp. For the past five years, the Mississauga, Ont.-based manufacturer has been producing fire-safety products, including a gadget called Safe-T-element that automatically turns off an unattended stove-top—a leading cause of kitchen fires. “Hundreds of thousands are hurt and thousands die each year in these fires, and [appliance] manufacturers are not providing solutions,” says CEO Kevin Callahan.
Until now, the firm has sold primarily to public-housing agencies and apartment-building managers, whose electricians retrofit electric ranges with the device. Now, the company is introducing an easy-to-install version of its technology for the public to buy directly. It has partnered with a wholesaler and is finalizing merchandising deals with such retailers as Best Buy and Amazon.
Entering the cutthroat retail marketplace is a risky venture, one that many Canadian retailers would experiment with domestically before expanding abroad. Not Pioneering; its consumer launch will be North America-wide. In essence, it’s attempting to crack the biggest consumer market in the world, with a product most people don’t yet know they need.
But Pioneering does have a base from which to start: a solid roster of B2B customers in the U.S. Adding a consumer stream is simply the next logical step, and the company will lean heavily on what it learned in its original push stateside. Pioneering’s story of networking, endorsement-seeking and smart partnerships with key U.S. influencers provides lessons in how to position an entrepreneurial company for growth outside Canada’s borders.
Callahan knew from the start that Pioneering’s product had huge potential. Reza Shah, a former NASA engineer, developed the original technology in 2000 after an accidental kitchen fire almost destroyed his house. Callahan, who previously had worked for a large ad agency and then a venture capital firm, came across Shah’s patent and bought his firm in 2003. As with most R&D-based startups in Canada, Pioneering set its sights on the U.S. early on; the domestic market simply wasn’t large enough to defray the costs of prototyping and early development.
Shortly after buying the firm, Callahan started pitching the product line to what he thought was the most logical—and lucrative—client base: appliance manufacturers. No luck; those he approached refused to license the technology, fearing that a safety promise of any sort would invite lawsuits.
Callahan knew that no one was selling quite what his company had to offer in North America. He also knew there was demand for it, as growing ranks of baby boomers fretted over whether their aging parents were forgetting to turn off the stove. That’s when he decided to focus his sales efforts on the landlords of multi-unit residential buildings. It worked: property owners proved to be very keen on reducing the risk of kitchen fires. Pioneering started making some big sales domestically with both public- and private-sector landlords, including Toronto Community Housing.
All the while, Callahan was working to secure similar clients in the U.S., which proved to be a difficult task. American landlords wanted proof that Pioneering’s wares actually worked. And so began a multi-year process of soliciting the approval of influencers and seeking out the right decision-makers in a slew of different jurisdictions.
Callahan started by submitting his products to two U.S. standards organizations for vetting. Then, he began travelling south—a lot. He attended fire-safety trade shows and networked with industry associations and their lobbyists, attempting to decode the complex U.S. regulatory environment.
The shuttle diplomacy allowed Callahan to reach a range of important allies. He pitched the product to fire departments and solicited endorsements from such people as Jim Crawford, project manager for Vision 20/20, a U.S. fire-prevention campaign. Crawford is now a firm supporter of Pioneering’s wares: “I think this product [Safe-T-element] has among the highest potential to mitigate fire damage in the U.S.,” he says. Such influential boosters have given Pioneering a credibility boost, and resulted in key word-of-mouth endorsements among the highly networked world of U.S. fire-prevention advocates. “We certainly have spoken to a lot of people about [Pioneering],” says Crawford.
Callahan also tried to bend the ear of federal, state and local politicians who had influence in the government agencies involved in housing construction and management, including the Department of Housing and Urban Development and the Federal Emergency Management Administration. “It’s all about champions,” says Callahan.
It may seem intimidating to approach such massive U.S. government branches, but Callahan has learned some useful ways of navigating the bureaucracy. For one, he realized the importance of brushing up on local cultures, because there is enormous regional diversity in how American agencies buy and operate. He also found that the best way to understand the complex regulatory scene was simply to ask bureaucrats a lot of questions. (See “Seduce Uncle Sam” at right for more tips.)
Callahan’s comprehensive approach paid off. He managed to get Pioneering’s products listed in catalogues of approved equipment circulated by federal agencies to general contractors. Those listings, in turn, generated orders from subsidized-housing providers, private property-management firms and energy retrofitters.
Through lobbying and networking, Callahan has discovered something surprising: most U.S. buyers are not protectionist at all. In fact, those he has dealt with have been fully open to dealing with a small Canadian company. In fact, “they embrace it,” he says. “The U.S. is far more open to giving entrepreneurs a chance. In Canada? Not so much.”
Having established a strong B2B distribution channel, Pioneering decided last year to develop a retail version of the Safe-T-element, and has adapted the device so that homeowners can install it without the help of an electrician.
Now, consumers have to be educated about the technology’s benefits. Pioneering is currently crafting its first formal marketing campaign. “Since we are a small company and our budgets are tight, we need to be creative and resourceful with how we market our products,” explains Pioneering’s COO, Dan MacDonald.
One tactic: the company plans to use the surge of media coverage generated by October’s Fire Prevention Week to get the word out through emissaries, including a celebrity chef and other still-secret high-profile names. As always, education will be central to Pioneering’s effort to create a new market. As MacDonald stresses, before you can sell a solution, “you have to create awareness of the problem.”