A Better Coil

Maine Scientific, of Richmond, Maine, also makes a product with a narrow audience, but their customers are generally at the other end of the age spectrum. The firm’s primary product is a specialized electronic coil used in hearing aids.

The manufacturer has always exported, doing about 40 to 50 percent of sales in exports the first year. In 2003, 91.5 percent of its sales were through exports.

John M. Knizeski, III, and his father started the business in 1993 when they realized they could make an existing product better.

“There’s really nothing new under the sun, we just make it better,” the company president said.

Knizeski and his father were selling for hearing aid companies in Scandinavia and Barbados and, once they had perfected their coil and launched Maine Scientific, tapped into existing contacts to sell their product.

In 2002, Maine Scientific moved to a former shoe factory in Richmond, increased employment from 19 to 30 people, and expanded manufacturing operations to two shifts.

The company has always exported its product, Knizeski said, because foreign markets were just an easier sell. The European hearing aid manufacturers automatically include the coil in their products, while American companies have more options for how they make their hearing aids.

Maine Scientific is also producing coils for surgical imaging equipment, and that represents the business’s largest growth area. While the company is strictly marketing to domestic clients for now, it will expand into foreign markets down the road.

With such a small pool of possible customers, how has Knizeski managed to expand his business?

A willingness to take risks has made all the difference in his company’s success, he said. “You find yourself climbing out on a limb a lot,” he said. “Sometimes those risks, you don’t see anything from them.”

For example, he said, they came up with what they thought would be an improved coil so that it could be handled robotically for assembly. Very late in the process, while these components were in production, they discovered a design flaw. “It turned out to be an unreliable component,” he said. They discovered that they could find the flaw by hand-inspecting each piece, and launched a very expensive testing and sorting procedure.

“It brought our yields down to 50 percent,” he said.

One way Maine Scientific has expanded its product line without taking on all the risk and expense is by entering a partnership with a customer to create a new product that meets the customer’s needs. Customers would express an interest in a device, but they didn’t want to pay for the research and development.

“We had to bear the brunt of the development costs,” Knizeski said. While Maine Scientific retained proprietary rights, it has been able to negotiate with the customer to help cover 20 or 25 percent of the costs. Because Maine Scientific maintains the rights, the company has been able to sell the same part to others.

Maine Scientific puts its mouth where it’s money is. When there’s a problem with production or quality, the employees don’t just go ahead and ship to meet deadline. “When you’ve got a problem, you have to be honest,” Knizeski said. “We know that we have some customers that really, really depend on our product. We do an inspection on everything mechanically and electronically. If we notice a problem, we’re on the phone.”

If that meant incurring the cost of shipping incrementally rather than all at once so that the customer can have the coil they need and keep their production on schedule, that’s what they’ve done. It’s all about trust, he said.