Cover Story
(January 2005)Cover Story
(January 2005)Smart Industries is about to celebrate its 20th anniversary as a manufacturer. As Gordon and Jeff look at it: time flies when you're having fun.
Gordon Smart had found his calling in real estate in the early '60s about the time Dr. Martin Luther King delivered his "I have a dream" speech at the Lincoln Memorial to commemorate the centennial of the Emancipation Proclamation, touch tone phones were introduced, stamps cost five cents, "The Feminine Mystique" by Betty Friedan marked the beginning of the feminist movement, transistor radios were the highest of high technology for consumers, Dr. Michael DeBakey used an artificial heart to take over the functions of the heart during surgery, and President John Kennedy was assassinated in Texas and New York's Idlewild airport was renamed in his memory.
From left: President Jeff Smart,
CEO Gordon Smart,
and Vice President Mike Smith.
While Gordon enjoyed his career, as the turbulent '60s turned into the '70s, he was losing his enthusiasm for real estate. He began hearing the buzz about a new phenomenon, a "TV" game called Pong. He was curious about it, and then intrigued, and finally he bought one and placed it in the Thunderbird Bowling Lanes. He looked at it like this: "It didn't cost much and wasn't much of a risk." The bowling center already had some games but at the time it wasn't unusual to "share" locations.
While Gordon was captivated with the new video game fad, he still held fast to his real estate job, never considering that the coin-op industry would be his future. For a time he worked both real estate and operating equipment.
When the responsibilities of two careers finally got to be too much, he had to choose: real estate or games. Of course, we know what he chose, but what led him to make that decision? He was already disillusioned with real estate primarily because a huge manufacturer left the area, resulting in countless properties sporting "for sale" signs in its wake. Gordon said, "I had lost my enthusiasm; it just wasn't fun anymore."
He may have lost his enthusiasm for real estate, but he found it again in the coin machine industry. He passionately secured more and more locations and continued to buy games, operating as Smart Enterprises.
Before long, Gordon had games in street locations and Adventureland amusement park and was sending out fleets of trucks outfitted with games to set up arcades at state fairs, not only in the United States but also in Canada.
Gordon's son Jeff was very young when Gordon became a coin machine operator, but as soon as he could say "quarter" he was enlisted to help out around the shop. Although Jeff explains that he was ALWAYS in the coin machine business, he noted that he began at the bottom doing all the grunt work a kid could do in the early days. But as most coin machine second and third generations know, it's working your way up that sets a solid foundation. Jeff finally joined his father full time right out of college where he earned his business degree.
Jeff hit the road running-literally-when he began traveling all over with the mobile arcades. "I really enjoyed traveling to the different state fairs, setting up the arcades, and then taking them down and moving to the next one. It was an experience I wouldn't trade for anything. You learn a lot when you get a look at life in different parts of the country," Jeff said.
Smart Enterprises was forging ahead in the industry and as Gordon said, "No one told me I couldn't do it all! I didn't know I shouldn't try."
Into manufacturing
The real estate career a distant past, and operating a highly successful multi faceted coin machine business, Gordon and Jeff began looking ahead at manufacturing games for the coin-op industry. It was 1985, a time when many in the coin-op business were calling it quits. The world was in turmoil at home and on foreign soil: Rock Hudson announced he had AIDs when most didn't know what it was, Indira Ghandi was murdered by two bodyguards, Gorbechav became the Soviet Union leader, TWA Flight 847 was hijacked by terrorists, the United States for the first time since 1914 owed more money to foreigners than it was owed, and President Reagan unveiled a new tax program.
It was also a tumultuous time in the coin-op industry. Video games were taking a beating and operators were stunned when their revenues began plummeting. Industry history would refer to this time as the video game bust. While the focus was on the video game crash, the European crane came into the United States and quietly began to fill a need. "We purchased some of these cranes and set up a route to operate them. When we realized the potential and saw improvements we'd like to see added, we decided to put some of our lightweight manufacturing experience to work," Jeff said.
He was referring to Smart's practice of keeping its state fair and carnival crews working during the off-season by manufacturing products such as handwriting analysis machines, foosball tables, and similar items. It was Smart's experience in manufacturing and operating, knowing first-hand what operators needed, that proved invaluable in the new crane manufacturing venture.
Before launching itself into the manufacturing arena, Smart opted to sell its other amusement holdings, from its routes and game rooms to the state fair arcade business. "If we were going to make a commitment to manufacturing, it would be 100 percent," Gordon said, reflecting back to when he made the choice whether to put 100 percent into real estate or the amusement business.
Smart never looked back; the company's focus was on manufacturing unsurpassed quality cranes. Smart began with a significant improvement that would become a staple on cranes in years to come: a joystick. Gordon is immensely proud of this invention but sheepishly admits that he never applied for a patent. "We were just too green at the time," Gordon noted.
Smart took its first machines to what is referred to as the Gibtown show, a trade exposition for carnivals, fairs, midways, and amusement parks. "We were really amazed at the response to our Bear Claw cranes. We sold our cranes the first year through Lou Singer of Central Distributing and by the second year we were selling through mainstream distribution channels as we've done ever since," Gordon said.
Gordon gave a moving tribute to the late Lou Singer, who helped Smart get noticed by distribution, which is often very difficult for newcomers into the industry. Gordon explained that Lou was Smart's national distributor and everything was sold through him for the first year. "Lou set everything up for us and I'll always admire and thank him for that," Gordon said.
The products
Smart's products reflect the knowledge that came with operating machines. Jeff and Gordon relived their own operating experiences such as dealing with poor quality equipment and endless fights over service and parts. "There were some horror stories," Jeff admitted. "That's precisely why we put so much emphasis on quality and service. In fact, we wanted to be known for quality products and straightforward service. We put all we had learned and all we went through into manufacturing superior games and then we concentrated on offering excellent service, turnaround time, and replacement parts. We remembered when a machine broke down on our route or while we were operating an arcade at a state fair. We needed parts right away. That's why we knew firsthand the value of overnight service."
Jeff added, "We had walked a mile in the operators' shoes and knew that getting information, troubleshooting, and being able to get parts to be up and running in as short a time frame as possible was priority."
After the tremendous success with its American-made cranes, Smart began studying ways to save operators money, which led to the self-sustaining redemption machines. The company began working on the Redemption Center in 1992 to offer operators a unique way to tap into the redemption business without having to hire more people. Gordon explained, "Take bowling centers, for example. It is a lucrative market but does not always lend itself to having the labor required to operate a redemption counter. Enter the Redemption Center. Customers can win tickets on the games, go to the Redemption Center, feed in the tickets, and get a coveted prize."
Stepping back a few years before the Redemption Center, Smart introduced the Ticket Center, designed to alleviate the congestion and labor at redemption counters in locations like family entertainment centers (FECs). Instead of having attendants count and destroy thousands of tickets a day, the Ticket Center counted them and then split them down the middle and presented the customer with a printout noting the number of tickets.
They could then take the printout to the counter and simply choose their prize without waiting in the long lines. The machine protected owners against duplication and theft. Jeff noted, "In the beginning when tickets were becoming popular, there was a lot of pilfering. Since many of the employees in FECs were young and earning minimum wage, they would find ways to reuse tickets. When the owner's wife had to stand for endless hours at the redemption counter during busy times, it wouldn't be long before they'd be purchasing a Ticket Center. Locations were losing money this way and some didn't even realize it."
Now back to the Redemption Center machine described as a jukebox for prizes. "The locations 'program' their machines with the prizes that suit the players just like jukebox operators stock their machines with songs suitable for various locations," Jeff explained.
Gordon added, "It sounds easy but operators often need some guidance in choosing prizes. Distributors will get us on the phone and we'll have long conversations about this aspect of the machine, even recommending merchandise suppliers we've come to rely on. There's nothing worse than having a great machine with the wrong prizes."
Newest on the self-reliant merchandiser for Smart is the Prize Center, a vending-type machine that holds various size capsules.
On the crane side, Smart has several new models including the Giant crane for locations that want a distinctive centerpiece crane. It's eight-by-eight feet and holds prizes up to 36 inches. Jeff says that it's a big crane but so are the revenues!
Also a first for Smart is the Toy Chest line, two imported cranes the company describes as its economical line. The Toy Chest line comes in both 24-inch and 31-inch and was designed for locations such as convenience stores or others where a more economical crane is needed. "Although these are inexpensive, they still come with our three-year warranty," Jeff said.
Smart is known for customizing cranes and Jeff and Gordon explain that they can offer more than most because Smart is much more than an assembly plant. In fact, Smart is a whole lot more than that. Smart does all of its own woodwork, metal work, plastics, harnesses, and has a full staff of artists for decals and custom designs. "We build a lot of designs that we don't market because they are custom designs for certain customers," Jeff added.
Gordon quips, "We are a do-it-yourself joint!"
Another tremendous success for Smart is the line of Hollywood photo booths. You name it, Smart probably has it. There are four different models offering unique backgrounds, outrageous characters, a number of poses, and the classic black and white strips of photos reminiscent of a bygone era.
There's even an E-mail photo booth that allows the customer to send a 30-second movie to friends and family.
The latest in the Hollywood photo booth line is one that offers an eight-by-10 photo and it comes in four variations.
We asked Jeff and Gordon what makes their photo booths so desirable. "A photo booth is a long-term investment so when operators buy one they want a sense of reliability that the company will be around 10 years from now. We offer warranties and our vending cost is much lower than you'll see in others," Jeff said.
Gordon added, "What makes our products so sought-after is that we sell parts and we still service the first games we manufactured. We never drop parts or service on our products. Operators not only feel comfortable knowing we will be here, but they are also impressed with our service. They don't just look at price, they look at the longevity of the company.
"Operators are a smarter breed now and they want their machines to last a lot longer than a couple of years. We've been known for overbuilding our products and that's what operators need. I think the future of our industry will be with niche companies like Smart that can service their customers," Gordon said.
"In the future manufacturers will have to be more economical with pricing, they will have to be able to listen to their customer base, and understand their needs. Then they will have to design around those needs. Like we said in the beginning and we adhere to it still: provide great products, sure, but you have to follow every sale with outstanding service," Jeff added.
Outstanding games, exceptional service, and an understanding of the industry. You have just described Smart Industries.
From left: Electrical Engineer Tech Chuck Scribner,
Research & Development Project Manager Brian Harmon,
Assistant Tech Support Manager James Chitty,
and Tech Support Manager Tony Pane.
Draftsman Steve Jones
From left, (back row): Controller Tom Lisk,
Production Planner Steve Wimer,
Inventory Controller Mischa Hoffman,
and Art Director Matt O'Gara;
(front row): Assistant Controller Robin Selby,
Administrative Assistant Barb Dutton,
Receptionist Mary Eich, and Inventory Coordinator Allean DuShane.
Smart employees perform final testing on a group of the new economical Toy Chest cranes
A large order of 3-in-1 Photo Booths is ready
to be shipped all across the country.
Assembly Supervisor Donnie Reinig sets up parts on Smart's computer-aided router.
James Chitty helps
Assembly Supervisor Russell Evans
with Smart Industries products.
A row of Prize Time cranes ready for final testing.
Assembly Supervisor Jim Sankey
prepares a decal
to be applied to a Ticket Center machine.