Car geek's startup puts sexy into hybrids
JuicedHybrid founder Paul Goldman (above, in a BMW Z8) likes to race when he's not working on his aftermarket accessories business. Photo: Laurie Goldman/JuicedHybrid via Bloomberg
When Paul Goldman bought a Toyota Prius in 2008, he loved its efficiency but hated its aesthetics. So the Californian marketing consultant and amateur car racer juiced it up, drawing on his teen experience in his Lithuanian grandfather's auto salvage yard outside Boston, where he would use scrap cars for parts and install them for customers.
For his second-generation Prius, "I got new, bigger wheels and tires and put a body kit on that changed the exterior appearance entirely to make it look more elegant and tough," says Goldman.
"But it was very challenging to find stuff."
Goldman's souped-up hybrid got lots of compliments, and his neighbors in Silicon Valley started asking where they could find this "new model" Prius.
That's when Goldman sensed business potential, albeit in a niche-of-a-niche market. He founded JuicedHybrid in 2009, an internet retailer of aftermarket accessories for dozens of hybrid and electric cars.
Now, with some 3,500 products in its online catalogue and more than a dozen new hybrids rolling out over the next two years, Goldman and his nine-person team are scrambling to keep up.
The start-up is following a long tradition of small companies dominating the $28.6 billion aftermarket parts and accessories business, says Peter MacGillivray, vice president of communications and events at SEMA, the specialty automotive industry's trade group.
The trend started with the entrepreneur who designed luggage racks for the Model T Ford.
"Regardless of what powers your vehicle, there are enthusiasts who want to modify and personalize it," he says. "Often those hard-core enthusiasts are the ones who come up with ideas for new products and move into the industry."
With gas at $1 a litre, electric cars and hybrids were the fastest-growing segment in the US auto market in the first quarter, according to a recent Bloomberg News story, and sales were up 49 percent to 117,182 vehicles in the first quarter, from 78,527 a year earlier.
Hybrids represent less than 1 per cent of all light vehicles operating in the US with market penetration strongest in California, Oregon and Washington, according to Polk, an auto industry researcher.
Goldman, 50, is a serial entrepreneur whose previous company, a logistics business he started in 1990 after learning warehouse automation and systems integration at Pitney Bowes, was acquired in 2000.
Over the past decade, he has headed a pair of e-mail marketing companies and worked as a consultant for companies that include Sony, Intel, Sun Microsystems, and Genentech.
"The background I have gained in supply-chain management and the Internet in highly competitive environments has helped me tremendously with [JuicedHybrid]," Goldman says.
Events outside his control - specifically, the Toyota auto recall and Japanese tsunami - nearly put JuicedHybrid out of business when it had just passed the starting line. The company had $300,000 in first-year sales and $1 million in 2010. But 2011 sales, at $3 million, didn't grow as expected.
"Our business is driven by new car sales and since Prius has the largest hybrid market share, the drop in their sales affected our sales substantially," Goldman says.
Brad Berman, former editor of hybridcars.com and a clean-car consultant and blogger in Berkeley, California, sees the drop as a blip - he's adamant that the auto industry is committed to cranking out more efficient vehicles. "Even if consumers weren't demanding it, there are mandates for it and new fuel standards that are taking us in that direction," he says.
The Toyota downturn forced JuicedHybrid to triple its product line, from 1,000 to 3,000 items, adding parts and accessories for other hybrids, including the Ford Fusion and Honda (Insight. Goldman's most crucial investment along the way, he says: search engine optimisation, now the biggest traffic-driver to the site.
Along with raising capital and hiring four to six additional employees, Goldman hopes to open a brick-and-mortar shop by year-end.
It would carry the company's top 50 sellers in a garage attached to Juiced's 10,000-square-foot warehouse.
"We didn't have the resources to do that last year, but we might think about it later this year. There are so many hybrid owners nearby; it might be a good move for us to have a storefront right in the heart of Silicon Valley," Goldman says.
"When I drive to work and look to the right and left, I see people driving hybrids. There are people all around here who are so committed to the environment and doing the right thing."