I went to Best Buy the other day to look for a screen shield for our GPS Receiver. The Best Buy sales person showed me the ZAGG invisible Shield specifically made for the particular GPA model I owned. I also learned that ZAGG makes two kinds of screen shields: the soft ones, and the hard ones. The soft ones can be removed by customers themselves, while the hard ones can only be removed by professionals for about $10. ZAGG has carts in many shopping malls, where I can get help to remove the hard screen shields. ZAGG has screen shields for just about every popular gadget in the market: iPhone, Blackberries, GPS receivers, etc. The screen shields are not cheap, selling around $10-$30 per package.
Intuitively I thought it was a great business. Looking at the Best Buy shelf, it’s apparent that ZAGG dominated this particular market niche. How expensive could it be to produce a piece of plastic to protect screens? I guess it’s a very lucrative business with high margins.
When I got home, I did a little bit research on ZAGG.
The first invisibleSHIELD design came about early 2005. And in July 2007, ZAGG went public on the NASDAQ. It went from initial product design to IPO in two and half years.
ZAGG is no dot com. It had real, explosive growth because it has the right product at the right time at the right market:
- Right time: iPOD was having explosive growth during this time. invisibleSHIELD rode the iPOD wave.
- Right product: ZAGG’s invisible Shield was based on a clear, thin, and very durable military film originally made to protect US military helicopter blades from high-speed damage. Virtually invisible, indestructible, and thin — these are desired features from customer perspective.
- Right market: consumers were hungary for an effective solution to protect their gadgets. They’re tired of the bulky protective cases.
ZAGG’s management team also secured the intellectual property for the technology behind invisibleSHIELD early on, which helped them build a defensible position.
In the high tech industry, I have seen my shares of vaporware and cash burning start-ups. I think ZAGG sets a great example for entrepreneurs — build the right product at the right time for the right market, and build a defensible position.
Do you know any ZAGG-like businesses? I’d love to hear from your.