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John Lacagnina on ColorCentric's business model

Published on November 11, 2010

John Lacagnina, CEO of ColorCentric on the company's business model and its unique digital platform.

Cary Sherburne:  Hi, I'm Cary Sherburne, Senior Editor at WhatTheyThink.com and I'm here with John Lacagnina who is CEO of ColorCentric in Rochester, New York and John this is, as I understand, you’re sixth, the sixth company you’ve founded.

John Lacagnina:  Yes, that’s right.  It’s number six.  Three have been in the printing space or workflow space and three outside that space, mostly technology though.

Cary Sherburne:  You and I met many years ago when you had Entire back in the day when things weren’t so connected.

John Lacagnina:  That’s right and we were actually doing digital prints and it took like a minute and a half to print one print off the network.

Cary Sherburne:  Mm-hmm, things have changed a lot.

John Lacagnina:  Yeah.

Cary Sherburne:  So maybe you could tell us a little bit about your business model at ColorCentric.

John Lacagnina:  Certainly.  ColorCentric actually we like to think of ourselves as a platform for web to print applications, so we provide to our web customers a system developer kit to use a software term, and a catalog of products and if they by conforming to this SDK if you will and product specifications they can literally order over 400 different products basically one-offs, so they use that… this SDK and this catalog to create their templates for web to print applications in the publishing business and in the photo space right now.

Cary Sherburne:  So maybe you could give us an example of one of your more key customers.

John Lacagnina:  Sure.  I think in the publishing space obviously who comes to mind is LuLu.  They’ve been a customer for about six years, great company.  They’re also in the photo space.  I would say the customer that comes to mind for the photo applications would be Blurb.  Blurb is a very fast growing high quality photo frontend, but we also do work for international companies like Sea We [ph] out of Germany.  They’re exclusive producers.  We do work for SeeHere with Fujifilm, so we have some very good customers.

Cary Sherburne:  And of course Lou Lou you’re doing one-off books.  Last time I talked to you I think you said the average run length was 1.8 copies.

John Lacagnina:  Right, actually in 19… about 2 years ago it was 1.7.  Now it is 1.8, so good memory.

Cary Sherburne:  Okay, you’re getting longer run lengths.

John Lacagnina:  Yeah, longer run lengths.  It’s wonderful.

Cary Sherburne:  And so I'm just wondering I mean do you work with…?  Do you work directly with self publishers or someone would go through Lou Lou?

John Lacagnina:  Actually someone…  Since we are B2B only we work again, as an operating system, so we provide services to companies like Lou Lou, so authors and publishers would use the Lou Lou frontend to order their book or to put an ordering site using some Lou Lou technology.  We do not go B2C.  That is sort of our customer’s realm and we stay out of that.

Cary Sherburne:  That is great.  Well and I also understand that you have either just founded or are in the process of founding your seventh company.

John Lacagnina:  Yes.

Cary Sherburne:  Are you going to retire?  Frank was going to retire, but he never did.

John Lacagnina:  I just founded…  I just founded laying on the floor.  I love that expression, founded.  Yeah, I founded actually Printer Net, Inc.  As we learned over the last six years as the print run length goes down ultimately to our run length, which is 1.8 then the cost of distribution, the proportional cost of an order, total cost of ownership for instance is higher because of shipping, so where a book might cost the user… a photo book might cost $20 the shipping of that book might cost 10, so the disproportionate costs for shipping really made us think about how do we produce closer to the user, so Printer Net is really about licensing ColorCentric technology in a software format, so we license our software workflow and we do training and we setup other either non printers, people who want to get into the business of what we do or offset printers who want to get into digital and we set them up into the same business model as ColorCentric typically outside the country right now, so we have locations in Canada, West Canadian is our partner there, New Zealand, Astra Group in Brazil and we’re talking to people in China and we’re talking to people in Latin America.

Cary Sherburne:  Is there any particular technology when you talk about digital printing?  Do you work with particular vendors or can they have any manufacturer’s brand?

John Lacagnina:  We also require a certain set of equipment and actually that is actually a good question Cary.  We virtually have all digital manufacturers’ equipment and primarily the reason is we want to take the lead from our customers, so whatever the customer wants for their business model that is what we use, so we have iGens and we have Indigos.  We have NexPress, Xeikon.  We’ll be interfacing with Océ for some of our international accounts, so it’s really driven by customer requirement.

Cary Sherburne:  Okay, so they can use any of those platforms.

John Lacagnina:  Whatever they want.

Cary Sherburne:  That is great.

John Lacagnina:  Exactly.

Cary Sherburne:  Fascinating, well good luck with that.  It sounds exciting.

John Lacagnina:  Thank you very much.  We think it’s a great…  You know we think digital, once something goes digital it’s going to go global.

Cary Sherburne:  That’s right.  It removes the boundaries.

John Lacagnina:  Exactly.

Cary Sherburne:  Yeah, thank you.

John Lacagnina:  Thank you very much Cary.

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