David Ross Drives His Tech Firm Forward

At an NAB Show press conference last month, Ross Video CEO David Ross clearly relished reviewing what was new and improved at his broadcast technology company, transitioning from one product to the next with the running refrain: “That alone would be pretty amazing — but Ross Video is bigger than that and we do more.”

Ross’s exuberance is not unfounded. The Iroquois, Ont.-based vendor has been rapidly expanding through acquisitions and internal development over the past several years. No longer just a supplier of top-line production switchers, it offers a panoply of tools for facilitating and enhancing TV production, particularly live news.

The latest and perhaps boldest move has been into camera robotics. It announced at NAB its acquisition of Cambotics, a leading manufacturer in that space. The deal brought with it Cambotics founders and developers Bob Scotto and Miles Spellman, and it comes less than a year after Ross’s purchased of FX-Motion with its unique Furio system for mounting cameras on tracks.

As head of a private company, Ross doesn’t have to open his books. But he insists things are going well, claiming growth by “almost by a factor of 10” during his 15-year watch.

At the press conference, he said revenue grew 47% over the past year and was up 59% year-over-year in the first quarter. “We’re by far the fastest-growing company in this industry with not a single down year in 21 years.”

Other measures: The manufacturing capacity has tripled in the past year, and the payroll is up from fewer then 100 in 1997 to 450 today.

Ross Video was founded in 1974 by David’s father, John, and David worked for the company while a student at the University of Waterloo and joined it fulltime in 1991.

When John decided to retire in 1997, he couldn’t just hand the company to his son. Canadian law required the new owner to pay “a defendable fair market value” plus all corresponding taxes. But the younger Ross “had no money. I was just an employee like anybody else.”

So he bought the company from his father by paying him over time out of the post-tax profits. Ross says he is “particularly proud of the fact that the company was able to buy itself,” while also pouring money into new products and acquiring other companies.  Running a tech company, he says, requires “enormous amounts of cash to invest in all areas — sales, R&D, manufacturing, inventory and to finance the extra receivables because customers don’t tend to pay for a month or two.”

Ross is also clearly proud that he has been able to manage the growth without bringing in outside investors or partners. He retains 90% of the company. Employees have owned the balance since 2010.

“I don’t take any money out of the company,” he says. “I get paid a normal salary. We just completely reinvest everything back into the company.”

The investment is guided by assessing the needs of customers, Ross says. “The first question we ask when designing a product is how are you going to use this? What do you need? This gives us an entrepreneurial outlook that tells us early on whether something will work or not.”

At NAB, Ross Video announced more than a dozen new or substantially-redesigned products, ranging from enhancements to its Carbonite series of production switchers to Quickturn and Inception, innovative options to Ross’s automated news production system, OverDrive.

Inception offers the ability to assemble and transmit news content across platforms, while maintaining human editorial control. It was designed in response to customers’ frustration with the labor-intensive process of manually metatagging, parsing and repurposing news stories for the Web and social media — tasks too often relegated to IT employees with no journalistic chops.

The XPression graphics solutions are already seen on most of the top award shows, including the Oscars and Emmys. But Ross sees TV stations as a much bigger market, especially if XPression’s virtual set capabilities are coupled with the Furio camera robotics.

Ross believes the main reason newscasts feature the same talking-head formats in use since the 1940s is because of “the monster amount of effort needed to calibrate virtual sets. That process was painful and costly and possibly unreliable.” Ross realized he could offer a much better solution by marrying robotics and graphics. “No other company in the world has both,” he says.

Ross’s pitch to stations: For about the same price as conventional robotic cameras or graphics, you’re getting the acrobatic Furio and virtual reality features “at pretty much no extra cost. For the same money as a talking head newscast, they can change at any moment to a non-traditional look.”

Ross Video’s penchant for promoting its products in combination seems to contradict many competitors’ emphasis on how well their technology “plays with others” — that is, operates seamlessly with competing products.

Ross likens this to the ideological contest between Apple and Microsoft. Where Apple offers a closed system to ensure compatibility, Microsoft promises greater flexibility on a range of hardware, which can generate conflicts and glitches.

“We’re trying to be both Microsoft and Apple,” says Ross. “If you want to use somebody else’s robotics or graphics, we’ll do our best to make that work. But when you combine our switchers, servers and Overdrive, they do things with our graphics systems like nothing else anyone has ever done.”

Ross considers the U.S. station business “extremely important. Without a doubt it’s one of our core markets” and accounts for much of the company’s 47% growth in 2011.

But the international market is also vital. “One of our key goals is to grow in a balanced fashion,” adds Ross. “We need to be strong in many different areas so that we’re hard to kill.”

Ross has shown a willingness over the years to make small strategic acquisitions. Before FX-Motion and Cambotics, there were Media Refinery (graphics), Norpak (data insertion) and Codan Broadcast Products (routers).

But what about large acquisitions? Such an opportunity presented itself last week when Harris Corp. announced plans to jettison its massive broadcasting business. Ross Video would seem a possible purchaser. No thanks, says the CEO.

“We have a policy of not buying companies more than 10% of our size. If you attempt a merger like Hewlitt-Packard and Compaq, you end up with a culture clash that’s almost impossible to fix. And at Ross we have an extremely strong culture of how we do things and why.”

Fair enough. But would Ross consider buying parts of Harris? “Possibly. I don’t know whether they’re planning on breaking it up or what they consider to be core. I’ll wait for the phone call.”

Ross currently fields “between one and three calls every week” from companies who want to be bought. “That’s been going on for a shockingly long period of time. Mind you, we’ve only bought five companies in three years, so we’re picky.”

Except during actual dealmaking, Ross says that high finance takes up only a fraction of his time. Most of it is devoted to overseeing the smooth interaction of his various divisions. To keep his hand in product design, he retains the title of “Director of Product Management” for Ross’s production switchers. But direct customer interaction remains his favorite part of the job.

Ross’s business philosophy and much of his personality is reflected in the company’s nine-point Code of Ethics. Rule No. 1 is the company mantra: We will always act in our customer’s best interest.

Rule No. 9 is extravagant yet specific: If there’s no one to authorize the required action in times of company or customer crisis — do what you know in your heart is right. (You may rent helicopters if necessary.)

But it’s Rule No. 3 that captures everyone’s attention: We will not ship crap. Indelicate perhaps, but reassuring to customers burned once too often by incomplete technical solutions.

“There’s nothing better than showing a customer that not only can we solve their problem but we can exceed their expectations in many ways. That big smile, that passionate handshake and then the customers coming back afterwards, that’s why we’re here.”