Case study: kliptech turns recycled paper in products and profits | Business

KlipTech Turns Recycled Paper into Products and Profits

Joel Klippert became an entrepreneur at the urging of his wife, LeeAnn Klippert, who believed in his unusual idea of turning recycled paper into a superstrong surface for skateboard ramps. For months he had tried, without success, to find a manufacturer willing to work with him in developing a durable composite ramp surface made from recycled and eco-friendly materials. Even his closest friends were skeptical. However, because Klippert and his wife were convinced that there was a viable market for this kind of sustainable product, they moved ahead to form KlipTech in 2000.

For the next two years, Klippert wrote and fine-tuned a business plan as he had manufacturing experts test various materials and production processes for transforming his invention from an idea to a reality. Despite unenthusiastic responses from most of the bankers he approached for possible financing, Klippert introduced his new skateboard ramp surface product in 2002. Later that same year, he pioneered yet another green product by introducing kitchen and bathroom countertops made from a composite of recycled materials.

Despite ever-higher sales of these products, Klippert still faced the challenge of enhancing the aesthetic appearance of his paper-based composite countertops for home use. At the time, such composite products were produced only in dark colors because of the resins used in the manufacturing process. Klippert recognized that a broader range of colors would make the countertops more appealing to more consumers. Working with a partner, he created an innovative countertop composite made with both recycled paper and bamboo and capable of being dyed in either light or dark colors. This new type of countertop attracted the attention of mainstream buyers, not just green-minded buyers, and gave KlipTech the edge it needed to compete more effectively with some of the biggest names in the industry.

KlipTech continues to build revenues and profits by introducing new products made from recycled paper. More recently, it launched EcoClad, a line of composites used for exterior siding on commercial buildings and residences. Not only is EcoClad attractive and durable, it also helps buildings qualify as green under the U.S. Green Building Council’s standards, confirming its environmentally-sound qualities.

Today, KlipTech is a profitable business with multiple product lines, a global customer base, two manufacturing plants in the United States, and a reputation for dedication to sustainability. The company also has plans to expand production in foreign countries and introduce its products in Asia, the Middle East, and the United Kingdom.

What lessons has Joel Klippert learned in the years since becoming a successful entrepreneur? First, he found out first hand that an entrepreneur must have the confidence, patience, and perseverance to take the practical steps necessary to turn a good idea into an actual product that can meet customers’ needs. It took many months of experimentation to perfect the skateboard ramp surface that gave KlipTech its start in the business world, but Klippert never gave up.

Second, the product must be unique so the company can, in effect, make its own market rather than go head-to-head with major competitors in an established market. When Klippert introduced his first skateboard ramp surface, no one else was making such products from recycled paper. The same was true for KlipTech’s first kitchen counter surface, as well as its later products. KlipTech’s innovations resulted in unique products that really fit the needs of its customers.

Third, Klippert learned that a nimble startup has an important advantage over large competitors. “The great part about being a small business is you’re like a speed boat on the water,” he explains. This means KlipTech can respond very quickly, “on the fly,” to emerging trends in the business environment. “Innovation is the key to the future and we will be working day after day to bring this to our current and future customers.” says Klippert. In contrast, big rivals need more time to make and implement decisions about adapting to the same changes in the business environment.

Klippert also advises entrepreneurs to do their homework early on legal issues and financing possibilities, so they have experts and resources in place before problems arise. From experience, he knows that small business owners must understand finance and plan to pay vendors and employees before paying themselves. He’s always thinking about how to improve one of his products or listening to customers talk about a new product they’d like to see. Succeeding in the global economy is far from easy, but Klippert remains enthusiastic about the opportunities he faces every day as the co-founder and co-owner of a successful business.*

Questions

1. Joel Klippert says he pays himself last, after he pays his vendors and employees. Explain this decision in terms of the principle of business profit. Do you agree with his payment priorities?
2. When compared to larger manufacturing firms in the building products industry, what advantages have helped KlipTech become successful?
3. How have the competitive, global, technological, and economic environments helped KlipTech to become a successful business? Which of the above environments might pose the most challenges in the next few years, and why?