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Brothers See Protection in Their Products, Distribution System

OptiFuse, a manufacturer of circuit protection components that was formed in 2000, has found steady growth by forming close alliances with distributors throughout North America.

“What we did coming out of the gate was decide we would build this company on our distribution network,” said Jason Kalb, the company’s national sales manager.

Kalb co-founded the El Cajon-based business with his brother, Jim, who serves as company president. Early on, OptiFuse made a commitment to its distributors not to bypass them and sell its products directly to customers, he recalled.

“That was the No. 1 thing we did to distinguish ourselves from the competition,” he said.

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OptiFuse creates and markets over-current and over-voltage protective devices. Because most of the manufacturing is done overseas, it maintains offices in Asia and the Middle East. OptiFuse products include fuses, fuse holders, fuse clips, fuse blocks, circuit breakers, and resettable fuses.

Before forming OptiFuse, Jim Kalb, an engineer, designed and manufactured products for Bussmann, Littelfuse, and Ferraz-Shawmut under the name Basic Power Engineering and Manufacturing. When Bussmann and Littelfuse announced plans to eliminate many of their distributors, he and his brother saw it as an opportunity to service these companies.

‘David vs. Goliath’

Jason Kalb said the partnership with distributors has enabled OptiFuse to compete with much larger manufacturers.

“It really has been a David vs. Goliath for us from day one,” he said.

The OptiFuse network includes about 500 distribution offices in North America.

In the Minneapolis area, John Larson, part owner of Waytek Inc., a distributor of automotive electrical supplies, said he appreciates working with a manufacturer that has no plans to sell its products directly. His company has been working with OptiFuse for about seven years.

“We’re not afraid of them sweeping in and stealing our business,” Larson explained. “That makes for more of a partnership than an adversarial relationship.”

Also based in the Minneapolis area, Hal Shattuck is an outside salesman for Chris Electronics Distributors Inc. He said he appreciates the personal relationship that Jim Kalb has created with his company.

“We know if we work with him he won’t turn around and take it direct himself and cut us out of the picture,” Shattuck said. “Credibility is extremely important to us.”


A Broad Background

Prior to founding OptiFuse, Jim Kalb launched several companies, including Vortex Technologies, a wholesale electronic components distributor supporting Mexican maquiladora manufacturers. Founded in 1991, it remains in operation.

Other companies he founded include Basic Power Manufacturing, a contract design and manufacturing company; Poker Room Supply, an Internet retailer; and Vista Verde Properties, a real estate development firm.

He said what motivates him as president of OptiFuse is the opportunity to create products that protect people from electrical accidents.

“We’re protecting the world with our circuit protection devices,” the company president said. “I feel good about the products we have. If you accidently pour water in the back of your TV set, you won’t start a fire.”

Finding Ways to Compete

Part of the company’s success can be attributed to the use of social media. Each week Jim Kalb writes a newsletter/blog that reaches more than 5,000 subscribers. The blog doesn’t focus on electronics, however. The topics include business, travel, relationships, and personal finances.

“We have a whole different philosophy,” he said. “We try to put a human face on a very industrialized industry.”

Other entrepreneurs have asked when the Kalb family plans to sell OptiFuse and cash out. The answer is “never.” Jim Kalb said he enjoys coming to work too much to simply take his profits and move on.

“I love what I do,” he said. “There is no way I am going to sell this business. I am very passionate about growing it smart. We pay our people well. We are part of our community. It’s not about cashing out and moving to Bahamas to avoid taxes. That’s not what we do.”

Taking Care of Employees

He added that he and his brother inspire loyalty among their associates by treating them the way they would like to be treated. Optifuse is on track for its fifth consecutive year of growth exceeding 20 percent.

“We have open-book management,” he said. “Anyone in our company knows how much we are making at any given time. Everyone is in the same boat.”

He said that in addition to the 12 people it employs in San Diego County, OptiFuse has two employees who work overseas to oversee various manufacturing plants.

“Most of our product is made in Asia,” he said. “We use about 21 different factories from around the world. We have people on the ground there. I travel to Europe and the Far East on a regular basis.”

During the sharp economic downturn of 2008, OptiFuse had no layoffs, the company president said. His workers came to him and volunteered to take 25 percent pay cuts until the economy improved.

“About a year later things got better and I brought them back to their current salaries,” he said. “Over the next two years, I made everyone whole for the money they lost.”

OptiFuse

President: Jim Kalb

Revenue: $3.6 million in 2014; projected at $4.3 million for 2015

No. of local employees: 12

Investors: None; privately owned by the Kalb family

What makes the company innovative: OptiFuse formed a close partnership with distributors who had been dropped by other manufacturers of circuit protection products

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