The Dream Team

By Camilla Cornell - From the June 2006 issue of PROFIT Magazine

It could be a PROFIT 100 first: a firm that has cracked the top 10 by selling to customers other companies don't want.

In 1999, Ryan Deslippe who at just 15 started a successful weekly newspaper-spied an opportunity in the 30 percent of wireless-plan applicants rejected on those grounds. With these tens of thousands of "sub-prime" consumers in mind, he and business partner Robert Cikalo co-founded Amherstburg, Ont.-based SelectComm to sell prepaid cellphone cards through independent convenience stores in Windsor, Ont. and neighbouring Essex County.

What a difference seven years make. Today, Deslippe is a grizzled telecom veteran whose firm notched 2005 sales of $24.4 million, up 9,299 percent over five years. And he's about to become president of a new firm, Selectcor, that will unite SelectComm with a pair of complementary businesses in the hopes of creating a dominant player in the sub-prime consumer market. Not bad for a guy who's still only 28.

As a prepaid wireless company, SelectComm didn't stay local for long. First, it hooked up with regional distributors that supply mom-and-pop corner shops, adding SelectComm's phone cards to their wholesale catalogues. Then it serviced the heck out of retailers, ensuring that additional stock of any hot-selling cards was always at hand. By 2001, consumers could purchase SelectComm products in convenience stores, gas stations, grocery stores and drugstores across Canada.

But by then the national wireless carriers had launched their own prepaid services, backed by big marketing budgets and packaged with discounted phones. "We figured if you can't beat 'em, join 'em", says Deslippe. Reasoning that the carriers would rather not deal directly with thousands of independent retailers to manage distribution, fulfillment and retailer support, Deslippe and Cikalo offered to buy prepaid cellphone cards wholesale from multiple carriers and distribute them to the mom-and-pops. One by one, Rogers Wireless, Fido provider Microcell Solutions (now owned by Rogers) and Telus Mobility signed on, and in 2003 SelectComm expanded its offerings to include prepaid long-distance cards.

By early July, SelectComm, along with Windsor-based Local Fone Service Inc. and Integrated Brands Ltd. of Markham, Ont., plan to complete a reverse takeover of Vaughan, Ont.-based Ribbon Capital Corp., a public shell company operating under the auspices of the TSX Venture Exchange's Capital Pool Company program. The deal will give the post-merger entity, Selectcor, a public listing and the shell's assets- namely, $1.75 million in cash. But that's not all. Local Fone's product is prepaid home phone service, while Integrated Brands markets IBM PCs on low monthly payment plans; add prepaid wireless to the mix, and Selectcor will have a portfolio of products for credit-challenged consumers that it can cross-sell to existing customers.

Deslippe, who will be named Selectcor's president, says the company will introduce more wireless and wireline services over the next six to 18 months to fill voids in the sub-prime marketplace. "In a way", he says, "we've come full circle".

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