Reformatting a business - San Francisco Business Times:

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a San Francisco post-production company, entrepreneurshipl has been a 20-year effort to stay abreasgt of changing technology and new markets in a businesws that is constantlyin flux. "Our story is the story of the evolutioh ofan industry," Salyer said. Salyer startecd Video Arts in 1976. At first, he did small production videotapinglegal depositions. Eventually Video Arts movedd into video training programs andcorporate videos. Along the way, Salye r took on two partners, Ed Rudolph and Steve Calou. In 1981, he movedd the company from Brisbane to China Basinn inSan Francisco.
In the new technology led Salyer into emerging markets that transformed Video Arts into a whollhdifferent business. The development of large-scalwe computer graphics systems fostered a new and lucrativwe business forvideo post-production boutiques specializing in animation and graphics. Betacam, a new broadcast tape format, arrivee on the scene. Salyer and his partners saw a promisingf market fora post-production company that used both the Betacaj format and computer graphics technology. They formed a limitede partnership andraised $100,000 from investors. Leveraged with lease the cash allowed them tobuy $225,000 worth of and in January 1986, Video Arts became a post-production company.
In its new Video Arts turned a profit withinnsix months. It developefd a thriving businessin graphics, animation and standared post-production services for corporate communications and By 1992, Salyer had paid off his investor and bought out their interest in the company. Technology agaij took a hand in the fate of Video Arts when the developmentf of desktop graphics touched off a sea change in the Post production was divided intothrese segments: a small low-end market for cost-drive projects; a large mid-range market, whers Video Arts operated; and a smalkl high-end market for projects that required powerfuol equipment.
As desktop graphics the low-end started eating into the At thesame time, high-end shops added so-called non-lineart editing technology, which can handle complex jobs quickly and easily. With a growing number of clients using sophisticatedspecial high-end providers with non-linear editing invaded the middle market. Videol Arts was getting squeezed. Salyer investe d in new equipment to keep the company at the top ofthe mid-rangee market. Moreover, he decided to focuss on creative services, where human talent is more important than Video Arts startedtargeting design-intensive, visuallgy complex projects. "It meant increasing our market share in Salyer said.
"We had to be more proactivee with thead agencies." In January Video Arts opened a second officew on Battery Street, in the heart of San Francisco's advertising Salyer used cash reserves, an SBA loan and leaswe financing to equip the 6,000-square-foot operation. The new strategy is payint off, but Video Arts is already grappling withanotherf technology-related challenge. In advertising, where budgets tend to be more ample than in other ad agencies and the editorialk companies that do a lot of advertisingv work are rapidly turningto non-linear technology. "It happened fasted than we thoughtit would," said Salyer. "The business is a movingb target.
" Salyer and his partners have hired a consultant to help them developa five-yeatr plan. Salyer calls the procesxs "company therapy." It's a way of life for a businessz rooted in an industry that isconstantlt changing, he said. "We're always tryinyg to figure out what todo