Peter Vrettas was in the heart of the Nevada desert when some high-profile clients came looking for him.
The small group of Wal-Mart executives waded through throngs of visitors inside the Las Vegas Convention Center at the annual COMDEX show — widely considered the center of the computer industry for three days each fall — for one simple reason: They needed help and they needed it fast.
“I remember they said, ‘We’ve never heard of you, but we’ve told several people what we’re trying to do and all of them recommended you,’” recalls Vrettas, CEO of Beachwood-based EDR Corp. “Within days, we were discussing the terms of the project.”
Wal-Mart planned to install cutting edge interactive kiosks in each of its 2,000 stores that would allow customers to listen to music and watch movie trailers before buying videotapes and compact discs. They also wanted to use the stores’ display televisions to run advertising and broadcast live programming beamed in via satellite.
The problem was that Wal-Mart had purchased only the concept, leaving development of the crucial system software to an outside firm, which was behind schedule and seemingly in over its head.
Even before a final agreement was hammered out, Vrettas put his programmers to work, ironing out the kinks in the software. He moved a crew of employees to a vacant warehouse in Austin, Texas, where they unpacked the Dell computers that would serve as the backbone of the electronic kiosks, loaded them with software and shipped them directly to each Wal-Mart store.
“I think we finished the agreement just as we were delivering,” recalls Vrettas. “It was one of those deals where there had to be a certain amount of faith. We just basically said, ‘We’ll make this work.’”
By the time country music star Garth Brooks used Wal-Mart’s satellite feed for a live in-store concert to promote his new album 12 months later, in November 1998, the project was a historical footnote. EDR completed its part of the job in 90 days.
And Vrettas sheepishly admits that not even sheer curiosity could prompt him to stop by a local Wal-Mart store to check out the event.
“I knew it was going to be a madhouse, and I can’t say he is a performer I really wanted to see,” he concedes with a smile. “It was highly successful, though.”
That’s one way to put it. Another way is to say the event helped Brooks sell 500,000 compact discs within 24 hours of the concert broadcast. Vrettas, however, downplays any sort of namedropping, whether it is his work with Jay Leno, who has hosted national company meetings staged by EDR, or the fact that Bruce Springsteen and Bob Dylan have dropped by EDR’s Beachwood headquarters while in Cleveland to borrow the company’s spacious music studio.
These are the types of details that Vrettas rattles off with little fanfare.
Instead, he prefers to talk about the decisions that helped EDR claw its way to the top of the corporate media industry in less than 10 years. Vrettas entered the 1990s with a small audio/visual production house and a goal to become a national company. As he leaves the last decade of the century, he owns a company that has reached that summit and is poised to be an industry innovator well into the next decade.
Vrettas credits EDR’s rise to prominence — and mere survival during the recession-era early 1990s — to the capital intensive and somewhat risky decision to divide the company into four divisions with separate but connected areas of expertise. Thinking big, though, did not come without risk. There was always the very real possibility that the decision would put EDR out of business if the company failed to grow fast enough to cover the cost of expansion.
But one only needs to look at Vrettas’ list of high-profile clients, and the company’s 1998 revenue of $20 million, to see that his gamble was a good one.
It is early afternoon in mid-October and Vrettas is visibly tired. He apologizes, explaining he just returned from Las Vegas — the home of his EDR Technologies division — on a redeye flight and hasn’t quite adjusted to the time change.
Clad in a golf shirt, khaki pants and running shoes, Vrettas leads the way to his office on the third floor of EDR’s spacious Beachwood headquarters and drops into a very large, very comfortable looking green chair. A lithograph of the Beatles “Sgt. Peppers Lonely Hearts Club Band” hangs on the wall next to him, perhaps as a tribute to others who dared to stretch the boundaries of their own industry.
“I hate talking about history, because it’s history,” Vrettas offers as a disclaimer before launching into his Cliff’s Notes version of EDR’s past. “But I understand that people always want to know where you came from, and I think it helps them understand.”
Vrettas’ reluctance to dwell on the past may stem from the fact that EDR, as it exists today, bears little resemblance to the company founded in 1968 by a group of writers. Today, EDR comprises four distinct divisions that can easily provide a visitor with the somewhat surreal experience of passing a composer, an electrical engineer and the host of a popular cable television show during a routine walk down the hall.
Vrettas concedes that this diverse mixture of talents may paint a picture of utter chaos to the uninitiated, but explains that this array of expertise is, in fact, the very thing that has made EDR an industry leader.
“The reality is, when you look at all four groups, and you look at all the different kinds of things we do, there’s a tendency to think, ‘Oh my God, you guys are all over the place,’” he says. “There is a singular focus, though. We specialize in developing content and the delivery system for high-end electronic images. … There is sense to the madness. The reality is the IT business is complex and the media business is complex.”
The other reality is that EDR is quite accomplished at developing and delivering high-quality digital media, ranging from large-scale national company meetings to cable television shows to interactive retail kiosks, while offering the equipment and technical support to make it work. Vrettas wants EDR to be known as the go-to place in the industry that is flexible enough to deal with any bumps in the road that may arise.
“I know one project we were designing that halfway through, the company said, ‘We don’t want to do a single meeting, we want to switch to locations across the country,’” he says. “We said fine, and the next day, we were doing that. Most other companies would have to negotiate an exit and pay a fortune for that project. For us, we skipped a heartbeat and went off in the other direction.”
Business wasn’t always this complex. Thirty-two years ago, Shaker Heights-based Education Dimensions Inc. — the earliest incarnation of present-day EDR — was founded with an exclusive focus on producing school textbooks and filmstrips. Vrettas arrived in 1973, toting a strong background in corporate training programs, a yet-untapped market for the young company to consider.
He was invited to spearhead the corporate training arm of the company, ultimately landing prime clients including Ernst & Young, Sherwin-Williams and Coca-Cola U.S.A.
Three years later, Vrettas was named company president and a minority shareholder, while chairman and majority shareholder Peter Kontos moved to Atlanta. Kontos’ untimely death less than 12 months later prompted fundamental changes in the company.
Vrettas branched off, buying out the corporate media side of the business, and founded a new entity named Educational Development Resources. Then, in 1980, Vrettas became a minority stockholder in a Beachwood music studio called “The Recording Connection.” When it folded six years later, he acquired it and brought it on as part of EDR.
By the late 1980s, EDR faced a bit of an identity crisis. It had become an adept production house, but was not large enough to make any sort of impact outside of the Greater Cleveland area. Moreover, Vrettas didn’t want his company to be a garden-variety A/V house that grew its business by simply taking on more and more work.
Under that model, EDR could only grow so large before hitting a wall, and Vrettas knew it. He wanted to add more production capabilities and attract better talent, a move that would drastically alter the small business environment EDR had known since its inception.
“We were in a little toolbox building down on Lee Road in Shaker Heights, and there was really no room to grow the company,” recalls EDR Vice President of Communications Dave Cockley, who has worked with Vrettas since 1982. “The building had never been designed to be a video production facility. We’d sort of bent and twisted it and turned it into one. By that time, the company was also in the equipment business.
“Pete recognized in order to grow, you needed people who could focus and specialize in these systems. It wasn’t just a little adjunct you could dabble in.”
This crossroads spurred a series of weekend management meetings during 1986 and 1987, at which some crucial business decisions were made.
“There was a point where we made a very conscious decision that we didn’t want to be a mom and pop company,” recalls Vrettas. “We wanted to be a bigger corporation, and, as a result of that, we knew it would mean making changes.”
The last internal hurdle to this metamorphosis was breaking the news to the employees. Many were completely satisfied with the cozy production house atmosphere they had known for years. Despite the usual initial protests, it was going to change, whether they liked it or not.
“I remember I told the staff at the time, ‘Some of you aren’t going to buy into this and some of you aren’t going to be working here,’” explains Vrettas. “But we were so focused that this was what we had to do. Those people who liked the small shop kind of place needed to move on to something else.”
More than 100 people work within the walls of EDR’s 32,000-square-foot headquarters and the 5,000-square-foot EDR Systems facility next door. Add the 16 employees at EDR Technologies’ Las Vegas office, and Vrettas’ work force has increased by about 600 percent since the late 1980s.
The spacious headquarters, nestled among a string of office complexes along Beachwood’s Commerce Park Road, is the first physical step Vrettas took toward his “think big” philosophy. A walk through the facility reveals a startling difference in the quality of work the company handles. The days of EDR’s image as a production house that simply handled corporate training videos are long gone.
On any given afternoon, a visitor might find engineers at Beachwood Studios recording narration from Patrick Stewart that is sent from Los Angeles over crystal-clear fiber optic lines. Meanwhile, employees of EDR Media in another part of the building may be planning the next Applebee’s International annual convention or scheduling Burger King’s next three-city business meeting tour.
The bottom line is that EDR is a busy place. In fact, this afternoon is so hectic that Vrettas can’t find an open conference room to meet with a visitor. After a
couple of phone calls, he finds a small room that it seems will go unused for the next couple of hours.
“You can imagine what this place looked like when 20 people worked here,” he later says with a look that conveys he can still remember it vividly. “We had all kinds of space.”
When Vrettas sat down to design EDR’s Beachwood headquarters in the late 1980s, he had only 15 people on his staff, but designed a building for more than 100.
“It really called for us to think big,” he explains. “Every time we started talking about it, we would ask ourselves, ‘Where is it we want to go and how fast do we think we can get there?’”
Cockley says Vrettas instilled this vision in his work force by calmly and constantly reminding them that better salaries, better benefits and more interesting, rewarding work would only come if EDR successfully grew into a large corporation that could command national attention.
“He didn’t beat people up and he didn’t give half-time speeches,” says Cockley. “He just kept reminding people of the vision and the fact that if you want to work on the most sophisticated, the most exciting projects, we had to grow.”
Designing an incredibly vast building and convincing banks, investors and employees that the expansion plans were viable was only part of the challenge for Vrettas. He also needed to split his homogenous company into divisions, an initially expensive move, but one that he wagered would allow EDR to grow faster and focus on a number of projects at the same time.
He decided EDR Media would handle the staging of business meetings and events, while Beachwood Studios would offer state-of-the-art audio and video production services. EDR Systems would handle hardware sales, integration and technical service.
After riding high for a short time, however, the Gulf War and recession of the early 1990s spurred a “serious self doubt phase,” in which Vrettas admits he and other key managers sat down and debated the fate of the company. What aided EDR’s survival was the fact that Vrettas had created three distinct profit centers, which marketed to and served different corporate clients. When one division hit a sluggish phase, chances were very good another one was profitable enough to make up the difference.
A lackluster economy wasn’t the only challenge. Attracting national clients was proving more difficult than initially expected. But Vrettas insisted EDR continue to seek out big-name work. Then one day, a Burger King executive contacted Vrettas, explaining that the fast-food giant needed to stage a series of company meetings and install a full-scale production studio at its corporate office in Miami — two jobs that EDR could easily handle.
“Instead of retreating and trying to make it work in Cleveland, we did just the opposite,” explains Vrettas, who admittedly looks back on the Burger King deal as a milestone for EDR. “We started reaching out more and landing work in other cities that demonstrated to us we were capable of being a national company and we shouldn’t have to rely on work that is just around the corner.”
Today, 10 years after Vrettas announced his think big philosophy, his client list is filled with corporations that are household names.
It’s safe to say he’s reached his goal, but even with impressive big-name national accounts, Vrettas is still doing a great deal of cutting edge work in Cleveland. EDR installed the interactive kiosks at the Rock and Roll Hall of Fame and Museum and the walls of television screens at the Great Lakes Science Center and Gund Arena.
EDR Systems recently finished installation of a state-of-the-art distance learning facility at The Cleveland Clinic’s Cole Eye Institute, which will relay live images from the operating room to locations around the world.
By the mid-’90s, EDR’s client list was growing rapidly and one could easily see today’s impressive resume taking shape. But it was Vrettas’ relationship with a small Las Vegas-based software programming firm, RussTech, that was about to turn everything up a notch and lead his company into the fertile grounds of interactive retail applications.
Vrettas’ EDR Systems division had been working with the firm to develop American Greetings’ in-store kiosks, which allow customers to design their own personalized cards. During that project, RussTech executives asked Vrettas whether he would be interested in acquiring their firm and the deal materialized in 1996.
Vrettas renamed the firm EDR Technologies and positioned it as a fourth division within EDR. Meanwhile, the Create-A-Card kiosk was a hit with consumers, pushing Vrettas and EDR into the industry spotlight.
“It turned out we gained a lot of notoriety from the project,” says Vrettas, who seems almost embarrassed about the benefit of such a timely acquisition. “We are recognized throughout the industry for it.”
It is not a difficult leap of faith to say the success of the Create-A-Card kiosk was one of the factors that led to Vrettas’ meeting with Wal-Mart executives on the floor of the Las Vegas Convention Center a little more than a year later. The popularity of the Internet had heightened the buying public’s hunger for information and convenience, and the rise of digital media was making it easier to satisfy that demand.
The stage was set for an explosion in interactive retail applications, and Vrettas was in a prime spot to lead the charge.
After the Wal-Mart project, EDR teamed with Moviefone to develop a kiosk where moviegoers can pick up tickets they order by phone earlier in the day, or buy tickets on the spot by simply swiping a credit card.
“Our job was to first create the unit itself and get URL approvals and come up with a working unit, as well as write the software to tie into the back office,” explains Vrettas. “We first tested the concept at United Artists’ theater in New York City, and have since unveiled it to 50 other locations across the United States that are currently being installed.”
Although undoubtedly an exciting high-profile project, it is easy to forget that the Moviefone contract is just a fraction of the work in which EDR’s divisions are involved. For example, the EDR staff developed a two-hour interactive DVD presentation for IMG that will be used to sell corporate sponsorships for the 2000 Olympics in Sydney, Australia. Meanwhile, employees at Beachwood Studios are busy with their complete production of “Room By Room,” a wildly popular series on the Home and Garden Television network, a channel included in standard cable packages across the nation.
After 10 years of successful growth, Vrettas is readying his company for another period of strategically planned expansion. In late December, he acquired Michigan-based DataServ Inc. Vrettas is still working out how the company will fit into EDR’s corporate structure, but plans to use this acquisition to focus on a new product he promises will revolutionize teaching in schools, universities and corporations through a mix of broadband digital media and the Internet.
Ironically, it seems EDR will enter its next phase of expansion by turning its attention back to where the whole company started — education.
Vrettas has set goals, too. He expects to reach revenue of $30 million by 2001 and ultimately take the company public, a move that Vrettas readily admits is very rare for a company like EDR. However, he is confident that technology, as it has in the past, will lift him and his company to the next level of success.
“We’ve strengthened this company to be part of what I would call the next wave of Internet companies,” says Vrettas, as an air of excitement enters his voice. “Full-frame, full-motion broadcast standard quality video is coming, and we’re talking months away, not years.
“And with that comes opportunity.”
How to reach: EDR Corp., (216) 292-7300
Jim Vickers ([email protected]) is an associate editor at SBN.
