|From left, Joey Leonard, Jordan Quivey and Christian Saunders founded OSI Hardware in 2008 after leaving Goleta-based Network Hardware Resale. Like Network Hardware, OSI sells used networking equipment made by Cisco and other big-name brands. (Alex Drysdale photo)
Santa Barbara, California – Published 8/24/2012
Pacific Coast Business Times
Pacific Coast Business Times: Pacific Coast Business Times: The Networkers: OSI founders ditched big-company life for own startup
By Marlize van Romburgh, Staff Writer
In just four years, OSI Hardware has gone from starting up in a garage to buying its own building in downtown Santa Barbara.
OSI sells used networking equipment made by Cisco and other big-name brands. The gar, often used in heavy-duty applications such as data centers and big office buildings, lasts a long time and can have long lead times to purchase new, making for a thriving used market. With backing from an U.S. Small Business Administration loan, the company recently purchased the former Hayward Lumber building at 606 Olive St. for $2.5 million.
In 2008, OSI co-founders Jordan Quivey, Christian Saunders and Joey Leonard left Goleta-based Network Hardware Resale, a large reseller of high-end networking gear that helped grow the entire market as it grew and introduced more clients to benefits of buying used.
“We figured we could do it better and have fun and make good money doing it,” Quivey told the Business Times. “We put together a website and started calling all your household brand-name companies, many of whom we’re doing business with today.”
The departure from Network Hardware led to a lawsuit that was eventually settled. The OSI founders started out working from Leonard’s garage and left when they ran out of room. The company has grown from four employees to 20 and now has offices in San Mateo, Dallas, Irvine, Phoenix and Atlanta.
“Our growth has always been meeting customer demands. We’ve always been on the good side of growth – never, ‘Let’s build it, then let’s find the clients.’ It’s always been good problems, like we have too much trash because we have too many orders.”
After the garage, the company made a couple of other stops before settling on the former Hayward’s property. With the SBA loan, it turned out to be cheaper to buy than to rent. Austin Herlihy and Steve Brown of Radius Commercial Real Estate & Investments represented OSI, and Michael Chenoweth and Bob Tuler, also of Radius, represented the seller.
“It’s already a complete green building, from the landscaping outside to the fly ash cement inside. It’s an amazing building,” Quivey said. “It’s got the look and feel that we want.”
The look and feel is important, because lifestyle and culture are the driving reasons that OSI founders started their own business. OSI could save money by locating elsewhere in South Santa Barbara County, but it wants its employees to be able to bike to work and visit the beach or downtown Santa Barbara restaurants during their lunch breaks. The founders sit with the rest of the crew in an open office space and encourage a free-flowing, positive workplace. “Everything we do is pretty simple. We don’t have a lot of rules. Most of us wear flip-flops,” Leonard said.
The company’s founders believe good internal relationships lead to better external relationships, and that those relationships with customers are what drives the company’s sales. “We do that little extra bit better on service. We try a little harder, we listen a little harder,” Leonard said. “The people we sell to are tech guys. They’re all busy, so we try to save them time. We try to make it as easy as possible for them to buy from us.”
One of the co-founders, Saunders, had previous experience running a business. Growing up, his father was relentlessly entrepreneurial started dozens of different businesses. One of them was a furniture store, and when Saunders was 18 and his father died, he took it over. He grew the store from two employees and one location to two locations and 16 employees before selling it and going back to school.
While selling high-tech networking gear has little in common with retail furniture sales, Saunders, who now serves as OSI’s chief financial officer, said he found the common thread among all businesses is that they succeed on the strength of their employees.
“It all comes down to the people you hire,” Saunders said. “Our employees really help us steer the ship.”
OSI has high expectations – the company aims to add $1 million in revenue for every new employee. But it also gives every employee in the company a monthly bonus that’s based on the entire company’s performance. It encourages its employees to work hard, have fun and enjoy living in a lovely locale. And OSI explicitly doesn’t plan on becoming huge.
“I think it’s all about sustainable growth. We don’t want to go out and hire a bunch of sales people and watch them flounder,” Saunders said. “We only bring on a few at a time, and we coach and mentor them and have the whole family embrace them.”