SoundTraxx

www.soundtraxx.com

Durango, Colorado

Founded: 1990

Privately owned

Employees: 28

CEO Steve Dominguez and VP Nancy Workman have led the market for model train innovation for a quarter-century. The company's 25th birthday comes with a slick new HQ and an eye on new markets.

Dominguez and Workman co-founded the company in Massachusetts before heading to Colorado in 1994.

Dominguez says it all started because of his own model railroading hobby, after he had trouble with a "large and clunky" sound system.

"They were built with 1970s technology," he explains, but meant to fit inside a tiny locomotive. He subsequently put his electrical engineering background to good use and launched SoundTraxx as "a part-time hobby business" by integrating several components into one small package. "There was just too much stuff to put in the model," he says.

The company's initial claims to fame were the first wireless controls and digital sound for model trains, but SoundTraxx has kept riding the rails of innovation for its entire history.

Released in 2006, the Tsunami is the company's flagship onboard locomotive sound system and last year's Tsunami SoundCar brought the technology to other railcars. "That's a first-of-its-kind product and it's doing pretty well."

As the name implies, the new Econami is a budget version of the Tsunami. Its smaller size "has opened up different submarkets of model trains for us," says Dominguez.

SurroundTraxx is a sound system with multiple speakers hidden in the layout instead of the model train itself. "It determines on where the train is and, as the train moves, the system adjusts the sound so it appears to follow the train," says Dominguez.

But it all starts with a field trip to the railyard to record specific sounds. "We actually get on the locomotive itself," he says. "We try to capture each individual sound: the horn, the engine, the bell."

Back at HQ, SoundTraxx staffers edit and compile an exhaustive library of samples for its products. "That's one of our big differentiators," says Dominguez. "Over time, we've recorded quite a few engines. Our customers are pretty picky, but we've got that exact sound."

The company also makes its own line of model trains with Blackstone Models. It works with a manufacturing partner in Asia on the molded components, but does all of the electronics for all products in Durango.

After first moving to Broomfield, SoundTraxx relocated to Durango in 1998 when the company had three employees. "We didn't have any big, ambitious growth plans," says Dominguez.

But the company's innovative products catalyzed demand and the company moved into a 6,000-square-foot HQ in the Durango Tech Center in the early 2000s and are now moving into a newly built 20,000-square-foot facility across the street. "The new space is going to do a couple of things for us," says Dominguez. "It allows us to get all our employees into one building. It triples our production floor space."

Challenges: Flat growth after a 15-year run of double-digit increases. Dominguez points to new competitors and lost accounts. "We've become a victim of our own success," he says. Focusing on OEM customers slowed down new product development, but the company bolstered its engineering staff in 2014 and is looking to accelerate.

Opportunities: New products and markets. "We are looking at some things outside the train space," says Dominguez. "We know how to control and manipulate sound” -- a skill that's an asset for industries ranging from toys to street signs.

"Within the train space, we're exploring overseas markets," he adds, pointing to Asia as the most dynamic possibility.

Needs: Workforce. "That's been the hardest part" of being in Durango, says Dominguez. "We tend to recruit from out of town." For married recruits, it's a double whammy, he adds. "You have to find the couple two jobs and that second job is kind of challenging."

He's also looking at adding more automation at the new facility, and sees testing as a prime target. "That's our biggest bottleneck right now. Final testing is still a very manual process."