Making Sense of Russound’s vNet Sale
4/25/2012 12:26 PM
by Jeremy J. Glowacki
From a distance, the on-again, off-again saga of Russound’s ownership of Colorado vNet reminds me of some sort of Kardashian reality show storyline.
After first purchasing the assets of the bankrupt lighting control company back in 2009, Russound decided to shut down the operation a couple years later, only to overturn that decision after feedback from dealers and reps convinced it to keep the brand alive.
Today’s news that the now former VP of sales and marketing Mike Anderson had purchased vNet from Russound is just the latest twist in the story.
I spoke with both Anderson, who joked that he was “terrified” after completing the purchase, and Russound CEO Charlie Porritt, who indicated that the sale offer had come as a surprise of sorts, but that the price and timing were right.
Russound seemed more than willing to return to focusing on its core competency in audio and away from lighting control, where it never appeared comfortable. Colorado vNet’s dealer-direct sales model was also at odds with Russound’s go-to-market strategy of selling through distribution.
“I don’t ever believe that Russound will ever get back into the lighting business by itself,” Porritt said, pointing out that one of the things that hurt vNet originally was “systemic failure” of its lighting products. Even though Russound eventually “resolved that problem,” making a brand-new power supply for it. “The product that is shipping today is good,” he said.
Russound also introduced a Colorado vNet-branded six-stream audio streamer power by Autonomic Controls. “There were some good, positive momentum things, but some of the things in how it was evolving and changing in the market it was going after, made it a little tough to manage both brands,” Porritt said. “One of things that will be an asset for Colorado vNet going forward is that Mike will have just a singular view and singular focus on what are we doing and where are we going?”
Anderson concurred that during his time working with both brands that Russound, not surprisingly, always overshadowed vNet, within the company. Yet he saw great, unrealized potential in the brand.
“A year ago, when I came over here, I’m going ‘Wow, this isn’t getting as much attention as it should.” It seemed like a pretty cool product, and just kind of over time, it grew and as I focused more on the Russound stuff and moved from the product management to VP of sales role here, our independent reps didn’t really focus on vNet at all, because they make their money selling Russound, I understand.”
I asked him who approached whom, initially in the vNet and Anderson confirmed that he took the initiative completely.
“It was me coming to them, seeing some opportunities that we weren’t able to address for various reasons, so I approached them and made the offer,” Anderson said.
Anderson added that he’d been fortunate to have “sold a few companies” in the past and was able to self-finance the purchase of vNet.
When asked about the timing of the purchase, Anderson revealed that, “there was an opportunity…I started seeing things that we could do. There’s a technology change coming at vNet and maybe that was the catalyst.”
Anderson said he plans to consolidate some of the vNet staff from Colorado and others from Russound headquarters in New Hampshire to a new headquarters in Florida, once that deal is complete.
The brand will be officially relaunched in June.