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Earthwave tracking down customers: Broad Ripple firm sees growing demand for high-tech fleet-management system

September 8, 2008

When thieves made off with a piece of construction equipment from a west-side job site last month, they were in for a surprise.

Little did they know that it contained a GPS tracking device developed by Earthwave Technologies in Broad Ripple.

The system traced the skid-steer loader's exact route to a rural Bedford residence, enabling police to recover it within days of the heist.

"I called the sheriff's department down there and, sure enough, it was right in the barn," said Adam Day, general manager of Fox Contractors Corp.

For the Fort Wayne-based firm, the recovery was an additional benefit to the wireless fleet-management system it bought from Earthwave. The high-tech system is designed to help construction companies increase productivity and control costs.

Contractors can track the amount of time heavy machinery is left idling, for instance, to cut fuel expenses. Or they can log hourly usage, to maintain more accurate maintenance records. They also can compare a machine's start and stop times with an employee's time card to ensure accuracy of work hours.

The Fleetwatcher tracking device is a black box about the size of a paperback book that is mounted on a piece of equipment and remotely monitored by an Internet-based application.

With one patent and two pending on its technology, Earthwave is becoming a serious competitor in a market dominated by larger rivals such as Qualcomm Inc. and Trimble Navigation Ltd., both in California.

Co-owners Mike Paredes, 41, and Larry Baker, 53, are friends who leaned on their consumer electronics and wireless experience to found the company in January 2001. But it wasn't until two years ago, after developing their third generation of hardware, that the pair positioned the enterprise for potential growth.

Earthwave should hit $3.5 million in revenue this year, thanks in large part to a $700,000 sale that is nearly finished, and could make a run at $5 million in 2009, Paredes predicted. Clients own the equipment and pay an annual service fee after leasing it the first three years.

They moved the firm in June 2007 to 10,000 square feet of space they lease on East 64th Street that is triple the size of their former location at 52nd Street and Tacoma Avenue.

Earthwave has about 40 customers in more than a dozen states and is looking to expand its footprint with the addition of three salespeople. Targets are California, the Gulf Coast and the Midwest, with longterm sights set on the Pacific Northwest and Northeast. The company has 18 employees.

Paredes and Baker ultimately hope Earthwave will become large enough to attract the attention of a suitor. But for now, they're content in their roles as fledgling entrepreneurs.

"Our company has not been a textbook for other businesses [to follow]," Paredes said. "We had a lot of people who discounted us and wrote us off, but we knew what we had."

The 'old-fashioned way'

A California native, Paredes moved to Indiana while in grade school and attended Ball State University before returning to the West Coast to cut his teeth in the electronics industry.

As a manager for Circuit City in the late 1980s, he helped open several stores in and around Los Angeles. A chance to lead the mobile electronics division at HH Gregg led him back to Indiana. He spent seven years at HH Gregg during two different stints, the last as a buyer at the corporate level.

Baker operated a phone systems firm in Cincinnati that later became C-Tel Wireless, which installed wireless systems for commercial clients. One with a fleet of forklifts suggested he use his experience to conceive a wireless hour meter to track the time the machines operated. He did, but rejected the company's request for exclusive rights to the technology.

Paredes, who was looking for "something more," knew Baker from a family connection. With Baker's business in transition, the two began talking about launching a startup from the wireless hour meter technology.

They incorporated under the name of Tsunami Wireless that, in hindsight, proved to be a poor fit for the construction industry. Changing the moniker before the Indonesian tsunami struck in 2004 may have been a deft business decision as well.

The company logo they referred to as an "earth wave," in addition to their involvement in the earth-moving business, prompted the switch to the present name.

Yet, their foray into ownership proved turbulent. The dot.combust and 9/11 squelched any hopes they had of attracting investments.

"Finally, we just said, 'Forget it,' and '[Let's] do it the old-fashioned way,'" Paredes said.

Undeterred, they set about developing a product without any outside help. Their second-generation Web site and platform debuted in 2003, but faulty hardware continued to hinder progress. Further research and development led to the current technology that came on the market in July 2007.

Getting a foot in the door

The product is custom-produced for Earthwave by The Morey Corp. in suburban Chicago, which makes Peoria, Ill.-based Caterpillar's tracking equipment.

Earthwave's latest box contains a tachometer to track when a machine is operating or idling. If it remains inactive too long, e-mail alerts are sent to shut the equipment off. The proprietary technology is in the patent process.

Productivity reports can be transmitted every five minutes using a digital network, as opposed to once a day under the original, analog system the pair developed.

"When you look at fuel prices today," Paredes said, "that's separating us from the pack."

Locally based R.H. Marlin Inc. can vouch for that. The south-side crane-rental company purchased 185 units of Fleetwatcher to improve its maintenance program. It since has extended usage to include tracking rental hours more accurately, said Mark Tabeling, the company's equipment coordinator. R.H. Marlin also has a construction division that employs the Fleetwatcher product as well.

"We have had absolutely no problems," Tabeling said, "and their system is just very simple to use."

Still, the construction industry has proven to be a tough nut to crack. Most contractors have no procurement process and are hesitant to embrace outsiders, Paredes said.

Earthwave recently started its first ad campaign and is running promos in five construction publications. It also has become members of several trade organizations and manned a booth at this year's ConExpo in Las Vegas. And, Paredes credited Baker's "expert" salesmanship for the inroads they've made.

The company has turned its attention to a slighter version of its model for use in light-duty trucks. It's unlikely Earthwave will target trucking firms anytime soon, Paredes acknowledged, because too many GPS providers already crowd the market.
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