Special Report (Enterprise) MANAGEMENT -- ROAD WARRIORS
MOBILE OFFICES: WHEELS OF FORTUNE?
MOV's high-tech minivan sounds like a good idea. But so far, sales are slow
In what seems like another era entirely, Charles E. Lippert recalls setting up an office in the back of a mini-motor-home in the early 1970s. At that time, he owned a chain of drugstores in Michigan towns. His secretary, "Smokey," drove from one outlet to another while he tended to paperwork at a desk in the back.
But it wasn't until 1993 that Lippert found somebody who had taken the same quirky idea and really run with it. A chance meeting with an affable dreamer and inventor by the name of George Landry put the entrepreneur into the business of selling Landry's mobile office vehicle (MO-V).
It sure sounds like a product for our times--a hip idea for today's on-the-move knowledge worker in search of a truly virtual, truly mobile office. It's a $35,000 minivan loaded with ergonomic furniture and high-tech gadgetry linked to the outside world by cellular communications. Lippert, 55, foresees a sizable market for offices-on-wheels--as more companies coax employees out of office towers and onto the road. "This product is a substitute for real estate," says Lippert, chairman of Mobile Office Vehicle Inc. (MOV) in Zeeland, Mich. "Many people can work much more effectively out of a mobile office than in a fixed office or the front seat of their car. There's enormous potential."
"NO-BRAINER." Like many an entrepreneur with a hot idea, however, Lippert is facing a classic dilemma: How do you turn potential into reality? It's not enough for an idea to be good. Entrepreneurs have to sell it to others. So far, Lippert is having a bit of trouble with that. After selling 25 mobile offices in 1994, his first full year of operation, he sold 75 in 1995--far short of his goal of 1,000. And there's no chance he'll meet his earlier hopes of selling 5,000 to 10,000 vans in 1996. So privately owned MOV is still in the red, on revenues of about $2 million. Because he has kept overhead low, however, Lippert can keep MOV going for years.
What's the hitch? "The paradigm shift has been slow to occur," Lippert says in flawless 1990s patois. "To me, the product is a no-brainer. But I cannot understand for the life of me why it's been so difficult for people to accept."
Although Lippert's faith in the product is as strong as Bill Gates's belief in Windows 95, he hardly fits the image of a risk-taking entrepreneurial visionary. Son of an appliance-store owner, he's a conservative Midwesterner--more like someone who might become a small-town pharmacist because it seemed to promise a comfortable life.
That's exactly what Lippert did after graduating from Ferris State University in Big Rapids, Mich., in 1963. For five years, he compounded liquids and made ointments--until buying his first drugstore, in Lowell, Mich., on his 28th birthday in 1968. Using money borrowed from relatives and cashing in his own stock-market investments, he began to build what would become a 13-store pharmacy chain over the next 17 years. It was during this time that Lippert began using a 25-foot motor home with a bolted-down desk and a chair held in place by a bungee cord to make the rounds of his stores.
After selling out to Rite Aid Corp. in 1984, Lippert bought out of bankruptcy a $4 million company that made tabletops. He met Landry, the inventor of the MO-V, in early 1993. Landry's notion of the product was generated by his own epiphany: He was a tool-machine salesman in the 1980s when he slammed on his car brakes to avoid hitting a child. An open can of Diet Pepsi spilled over his documents. "I said: `There's got to be a better way to work more efficiently when you are out on the road,"' he recalls.
The inventor and the entrepreneur collided when Landry was hoping to buy a used saw from Lippert to cut the desks for his mobile office. "The moment I saw the prototype, I recognized the latent potential of it," says Lippert. "I said: `Wow, this is neat. This is going to be something."'
DEAD BATTERY. He leased the patent from Landry, hired him as his first employee, and sank $1 million into research and development before creating a network of partners to launch the product. If it hasn't speeded the move toward the virtual workplace, the MO-V is a product of a virtual company. Lippert buys the gutted cargo vans--usually Chevy Astros--for $17,000 a pop from General Motors Corp. and then sends them off to subcontractors who convert them into MO-Vs, using office equipment made by 10 other suppliers. With just six employees, Lippert needs to sell a mere 10 vans a month to break even.
The first one was sold in 1994 to Jeffrey S. Brown, a New Hampshire agent manager for U.S. Cellular Corp. Now self-employed, Brown has put 30,500 miles on the van. "It changed the way I work," he says. "I can invite clients in, sit down with them, fax their orders to the office, and be done with it." His biggest beef: The battery went dead when he forgot to turn off his fax one night. MOV has since added a backup.
Finding more buyers has proved a lot harder. "We thought there were 6 million Jeff Browns, but it turns out there aren't," says Dayna Beal, vice-president for operations. "We discovered we have to create the market."
DRIVING MR. DOLE? How does a small-business owner with limited resources do that? For one thing, Lippert is trying to tighten the marketing focus to emphasize insurance adjusters, real estate brokers, and sales reps who are already on the road. St. Paul Fire & Marine Insurance Co. recently bought four of the vans for its personal-insurance reps. "We are trying to untether them from an office," says Richard F. Dryden, a St. Paul manager. "Once they leave their home in the morning, they can stay in the field all day. They won't have to run to the office to access our claims system."
Lippert is also teaming up with other companies that are trying to get a piece of the virtual workplace. When McCaw Cellular Communications Inc. launched a more efficient cellular network for high-speed transmission of data, the company paid to retrofit two vans with its cellular equipment and sent them to the world's largest computer conference to show off its new technology--and MOV's product. MOV also joined Canon Inc. on a 12-city virtual-office van tour to help Canon promote its mobile electronics. The company did the same with AT&T Global Business Solutions.
Also, Lippert has used his contacts to persuade Senator Bob Dole (R-Kan.) to use an MO-V for his Presidential campaign. "We think that will bring us some publicity," says Lippert. "It's just a matter of people trying to figure out how it can be used." It's also a matter of Lippert convincing them it's a good idea.BY JOHN A. BYRNE IN ZEELAND, MICH.