The untimely end of VIA International, a group of integrators from around the country who tried to establish a national custom integration business, was the talk of CEDIA 2015. We asked some industry luminaries how they felt about it.

TI 1115 Reaction StarkeyPaul Starkey, Co-Founder of VITAL MGMT and BRAVAS Group:
This was a great disappointment. No one wants to see this happen. First and foremost because so many great people were negatively affected, and certainly trusting customers suffered significant losses.

These aren’t the first companies to go out [of business] in our industry, but at $70 million-plus this was very sobering news.

One might first think [that roll-ups are dead for CI], but the real purposes of effective roll-ups are to provide an offensive strategy; to become stronger together; and to accomplish things that can’t be optimized at the small local level. It is not simply about cost consolidation: you must keep your customer base, and expand it, it must become a better place to work, it has to be based on already successful/profitable businesses capable of funding their joint future. And, then the culture must work.

There is always a need to get back to Profit, People and Process and a willingness to be part of something larger and special.

Defensive strategies often fail; too focused on cost and not customers, and generally create centralized organizations that don’t work well in the CI business.

We think [VIA’s closing] amplifies the need for companies to get profitable, really profitable, first. It also calls for standards in how our businesses are run. Just because we are in the custom business, we assume the business has to be custom. This zaps productivity and real efficiency. Our venture [BRAVAS Group, VITAL MGMT] is focused on doing the pre-acquisition, pre-merger work first. It does not require roll-up and is not based on a software conversion. Our rule is solid process first. Interestingly enough, we had more genuine new interest at CEDIA this year than ever before.

What implications could VIA’s closing have for our industry? Hopefully none. But it could sensitize clients to making deposits, it could send messages to financing sources that our businesses are high risks, it could mean having to insure deposits. And, it might keep many owners from dreaming about ways to monetize years of hard work through selling their business.

I think the real message for all of us is become stronger, understand the sources of our income better, and don’t be afraid to grow. The consequences of not growing can be fatal, too.

TI 1115 Reaction GlikesRichard Glikes, President, Azione Unlimited:
When I was vice president of Bryn Mawr Stereo, we grew from three stores to 18 stores. In the case of three markets, we bought out existing dealers. It was difficult but we had three things going for us that VIA did not. First of all we had a software platform, Tyler, that worked extremely well. We could implement it and train employees rapidly. The second thing we had going for us was our process was defined and ingrained. The third was that we had contiguous markets which overlapped from a marketing umbrella standpoint. I would be remiss if I did not include “culture” as well. Everyone knew the culture or they went elsewhere.

There have been three attempted roll-ups that have failed; Cello, Signature, and now VIA. It’s very difficult to pull off and candidly I’d like to have Azione Unlimited to be the first to succeed. This is part of our five-year plan.

Finally, I respect and like every one of the VIA principals. They are strong leaders, very smart businessmen, and all-around great guys. It is a shame what happened. I’m sure the phoenix will rise again in each of them.

TI 1115 Reaction HanaBob Hana, Managing Director, Home Technology Specialists of America (HTSA):
Situations like this with VIA Home and in the past with so many others in our industry, both on the dealer side but also the manufacturer vendor side, are never a good thing. People’s lives, families and personal well-being are disrupted and in this case, people who worked many years in our industry now find themselves looking for employment. So I think first and foremost about this from a “people perspective,” as many are personal friends of mine. I hope all are well and end up in a good place, and any way in which I or HTSA can help, we will be there.

TI 1115 Reaction BrunoVin Bruno, CEO, CEDIA:
VIA International was an inspired idea for our industry. I wouldn’t begin to speculate on the closing, but like many, we are concerned about the employees affected. CEDIA’s job board is a good place to start and if there is anyone looking for good people, I would encourage them to send us their openings. We send out new openings every Monday in our weekly newsletter.

Dave Workman, CEO/President, ProSource:
The failure of VIA illustrates one thing, and that is the difficulty in trying to roll up businesses together, which is obviously what the goal was there. When you incur the additional TI 1115 Reaction Workmanoverhead that was taken on in trying to standardize their operations, I think that it was found that they didn’t create the amount of offsetting efficiencies that were necessary to keep the thing going. As a result, their expenditures with trying to standardize the operations across many outlets basically took them out of the business. I don’t know that it was a matter of how much sales they were doing. Rather, I think it was a cost issue that got them into trouble.