There are plenty of garage start-ups, especially in the high-tech business, and people still refer to cottage industries. But Dyson might have been the first ever shed start-up. It is certainly the most successful.
Engineer James Dyson set up the company that bears his name after becoming frustrated by that all-too-familiar domestic experience of running a vacuum cleaner across the same patch of carpet over and over again as it spits out what it collects. He retreated to his back garden shed, where he disassembled the product, studied how it worked and eventually built more than 5000 prototypes of a better, more efficient model.
He touted his creation to the major manufacturers, none of which were interested, so he decided to make it himself.
That was in 1993. Within two years, Dyson became the best-selling vacuum cleaner brand in the UK. Since then, more than 20 million Dyson vacuum cleaners have been sold worldwide; they are now sold in 42 countries and are market leaders in the US, western Europe and Australia.
The original Dyson prototype is still on display in the company’s sleek showroom in swanky Chelsea, in south-west London, where CEO Martin McCourt explains how Dyson hoovered up (if he will pardon the expression) the competition.
“Ours is the only vacuum cleaner that does not lose suction as you use it from room to room,” he says. “That’s really about innovation.”
The heart and soul of Dyson, as well as its design nerve centre, remains in its original home base in Malmesbury, in the English county of Wiltshire. There, 350 engineers and scientists toil in a constant search for new and better technology, along with 850 other employees.
“We are first and foremost a technology company, rather than a manufacturing or selling company,” Mr McCourt emphasises.
Intelligent design is at the heart of Dyson’s corporate strategy. One-third of the company’s workforce is involved in research, design and development (RDD), in such specialties as fluid, mechanical, electrical, EMC, thermal, chemical, acoustic and software engineering. The company spent £50m on RDD last year and £180m in the past decade.
Dyson’s vacuum cleaners are designed and engineered in Malmesbury, and made in Malaysia, where 100,000 are churned out every week. Digital motors are made in Singapore. Dyson’s handful of factories in Malaysia and its Singapore facilities employ more than 3000 people in total; another 150 located in Malaysia are product testers and quality control experts.
“It is a simple set-up with logistics flowing throughout,” Mr McCourt says of the way the company is structured internationally.
Machines undergo extensive testing before they go into production, involving more than 100 tests on 126 test stations and 25 individual performance rigs. Dyson engineers spend 30,000 hours a month testing machines. An acoustic team spends all day, every day analysing noise and vibration levels in a semi-anechoic chamber. Other test facilities include microbiology, filtration, pick-up, numerous mechanical test rigs and a multi-axis industrial robot. Testing is carried out in Malaysia and Malmesbury.
Although the brand name Hoover has become a synonym for vacuum cleaner in the UK, it might be more appropriate now to speak of ‘Dyson-ing’ a room, because Dyson now dominates the market. By 1995, it was the UK’s best-selling vacuum cleaner and by 1997, the company was selling more vacuum cleaners than Hoover and Electrolux combined. Today, it is the number-one selling vacuum cleaner brand by both volume and value, and every third consumer in the UK has a Dyson vacuum cleaner.
By 1996, Mr Dyson wanted to grow the company overseas. Enter Mr McCourt, who was charged with leading the international expansion. He started with the US, where Dyson gobbled up market share as quickly as it had in its home market. Within two years Dyson had overtaken Hoover to become the top vacuum cleaner brand in the US, with more than 20% market share. “Our position is still building in the US but we are very happy with what we have achieved so far,” says Mr McCourt.
Dyson has an office in Chicago employing 170 people (mostly in sales), which imports products from Malaysia and distributes them to retailers across the country.
Success is coming quickly in Japan as well: just one year after arriving in the country, Dyson has claimed 8.6% value share of the vacuum cleaner market and is the number-one selling brand in Tokyo. In February, Dyson entered its latest market, Canada.
In 2004, the company produced 2.6 million vacuum cleaners, up four million on the previous year and compared with only 30,000 in 1993. It employs 1600 people globally and 65% of its business now comes from outside the UK.
Like the Dyson machines, there is no foreseeable let-up in the company’s power to suck up market share. “Although we have a leading position in several big markets, there are still millions of people that purchase vacuum cleaners that don’t have Dysons,” says Mr McCourt. “We want to drive Dyson’s reputation around the world on the back of our excellent technology. There is still a lot of fun left to have.”