CES '08: Small Businesses Try to Rise Above the Fray

It's never easy being the little guy, but for small-company exhibitors willing to take their lumps, it is possible to stand out from the throngs at the Consumer Electronics Association's International CES show. Some 140,000 people are swarming the 1.8 million square feet of floor space at CES this week, sampling the high-tech contraptions and electronic playthings of more than 2,700 exhibitors—many of them household names, such as BMW, Hewlett-Packard , Philips Electronics , Research In Motion and Sony .

Plus, with the show taking place in Las Vegas, a small manufacturer striving for attention will have to compete with more than just the bigger gadget makers.

Jay Leboff, the owner of HotSeat Chassis, a Connecticut-based maker of flight and racing simulators, learned as much two years ago. As he manned a booth at the Sands Expo and Convention Center—one of CES's numerous venues—he had to cope with the added distraction of the Adult Entertainment Expo and many of its 30,000 visitors, just one flight downstairs.

Hotseat Chasis counts Lockheed Martin among the buyers of its flight simulators.

"You got these really scary-looking women walking around," says Leboff. (The 2008 CES also overlaps with the adult-film convention.)

HotSeat, a company with about $1 million in annual revenue, is back this year to display its simulators in a 20 x 20 booth, trying to catch the attention of retailers. HotSeat will spend about $15,000 on the show to cover transportation, set-up and booth rental. The company will pay another $8,000 to appear at "CES Unveiled," a conference press event.

It's critical for smaller firms to use the news media to draw attention themselves ahead of the show itself, Leboff says. HotSeat places print ads and cranks up PR efforts in the weeks leading up to the show. Otherwise, companies can get lost in the deluge of small firms displaying their wares on the show floors.

"There are a lot of 'me-too' products there," Leboff says. "You'll see plasma screens ad nauseum. They have a wide variety of products, but they also have an intense concentration of similar companies making similar products."

HotSeat's efforts have paid off: Since taking its first racing simulator to CES in 2005, the company has landed customers ranging from Civil Air Patrol units and Stephen Spielberg's DreamWorks production company to Lockheed Martin . 

Chief Executive Officer Geoff Lyon of CoolIT Systems, a manufacturer of computer cooling technology, has found that sometimes the product is the promotion.

"Your product has to be there and has to tell its story," Lyon says. "CES is only a venue. It all falls on the product."

One of Alberta-based CoolIT's products, a USB-powered beverage-chiller, helps CoolIT draw booth visitors who might not otherwise drop in to look over liquid cooling systems for high-performance computers.

January's show marks CoolIT's third CES, and Lyon partly credits the convention with building his company's buzz—first with retail outlets that service the gaming community, and from there with manufacturers like Dell , which now uses a CoolIT product to chill one of the super-fast computers it makes for gamers.

CoolIT Systems' beverage chiller gets its power from PCs' USB ports.

Lyon believes in aggressive public relations. In 2005, just prior to the 2006 CES, Microsoft was battered by reports that its recently released Xbox 360 was prone to overheating. "So we bought one, chopped it up and liquid-cooled it," Lyon says.

CoolIT put out a news release entitled "CoolIT Systems Showcases the World's First Liquid-Cooled Xbox 360," boasting that it would show off the rigged-up box at CES. The company's Web website, which normally got 25 hits a day, received 780,000 the day after the press release. And CoolIT's 10 x 20 booth at CES was overwhelmed.

"We were crushed. It was fantastic. Euphoric even," says Lyon, who put CoolIT's current annual sales at "millions of dollars."

But like many exhibitors, Lyon had to pay his dues and learn the ropes.

When Lyon first went to CES 9 years ago—with a different startup—he and his partners weren't aware that rules in effect at the Las Vegas Convention Center at the time forbade exhibitors from bringing in anything that required more than two people to carry. Larger items cost more than $50 a pound to bring to the show floor, Lyon says, and his team was short on cash.

"So there would be situations where two of us would be carrying a 36-inch TV in, breaking our backs, carrying it over football-field distances," says Lyon.

Unable to pay to have their bigger materials brought in, Lyon's team built an impromptu booth out of plumbing pipe they bought at the local Home Depot.

Some logistics problems aren't related at all to the show itself, but can still be painful and costly.

Vuzix, of Rochester, NY, has annual sales of more than $10 million a year and makes video eyewear for the gaming, commercial, medical and military markets. To demonstrate the immersive visuals of its gaming line, Vuzix last year set up a live Internet connection from its booth to Warcraft, an online fantasy game. 

Vuzix's eyewear has customers among the military, commercial and medical industries, in addition to gamers.

But the demo fell through when Blizzard Entertainment, which hosts Warcraft, shut down its servers for maintenance, leaving Vuzix's salespeople in a bind on the show floor. 

But Vuzix marches on. In January, the company is looking to expand relationships with distributors and resellers. The company is also debuting a product designed for sufferers of macular degeneration; the eyewear digitally magnifies items to allow users to handle everyday tasks such as reading. Vuzix also plans to launch a new gaming system this year.

Those new products are likely to draw a crowd, but exhibitors have to press the flesh if they're going to parse the tire-kickers from the possible business partners.

"Every visitor to our booth is important to us, but lots of people want to just play with the toys," says Vuzix President Paul Travers. "Finding those distribution partners, those resellers—that's the harder part."

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