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Bigger Footprint

With digital online marketing eating away at traditional print forms of advertising, it is no wonder that Scorpion Design finds itself bursting at the seams with employees and work. Matthew Shepherd, 40, is on the front lines watching that growth as chief financial officer at Scorpion, a Santa Clarita internet marketing company that creates websites, online videos and digital advertising and social media campaigns for clients in the legal, health care and home services industries. Scorpion landed in the No. 9 position on the Business Journal’s Fastest Growing Private Companies list. Shepherd took time to discuss with the Business Journal what has been behind Scorpion’s growth, its plans for construction of a new headquarters and the importance of staying in Santa Clarita. Question: How do you explain your company’s growth? Answer: We invest a lot back into the company, as far as dollars and energy. We are constantly refining our product, increasing our product offering, making it better. We are pushing the envelope with the technology that is available to our clients and to ourselves. Where does your new business come from? We have a tremendous amount of growth that is driven by reputation, referrals, word of mouth. That is due almost exclusively to the level of service that we provide to our clients. It is very high touch; it is very proactive. We do not just talk to talk but walk the walk of striving to become a partner to our clients. We feel it is our responsibility to help them grow their business by us doing what we have told them we are going to do, which is increase their online brand awareness, increase the traffic going to their website, and ultimately increase the amount of new business and new clients they can attract. What are the challenges of growth? Management in general is a challenge. As soon as you find a formula for a certain size or direction, it changes. You add another 50 to 75 employees or there is a handful of initiatives that you chase. We are in a volatile market; there is constant change. It is not necessarily a problem but it is a challenge figuring out what is going to work next quarter because it might not be the same thing as what worked last quarter. How long has the company been in business? For over 15 years now. Who are your clients and what industries do you serve? We cut our teeth and still have a very large client base in the legal vertical. These are law firms, sole proprietor practitioners. That is still our biggest sector. We have a very big health care portion of our business. Health care systems, standalone hospitals, clinics. That is going to be a very large growth market for us in the coming years. Why? Because that vertical, nationwide and globally, is just coming into the digital era. A lot of different verticals were quicker to adopt. Health care – hospitals, medical centers, clinics – they are in the past few years adopting into the overall digital strategy. There is a tremendous opportunity there. Because we have been in it for the past several years and a leader in that space. We are going to see a lot of growth. Any other sectors that you serve? We have seen a lot of traction with franchises. We have several of the largest nationwide franchise brands. Each quarter we are signing up more. That is longer sales cycle as you can imagine because we are talking about hundreds of clients at one time. That is a fun vertical for us to get into because not only does it fall right in our wheelhouse but because it is nationwide. We get to help identify ourselves with these franchise groups. Franchising itself is one of the fastest growing market sectors in the country the past few years. We have fast growth Scorpion partnered with a fast growth sector. What franchise groups are you doing work for? A lot of them are home services related. Plumbing, roofing, HVAC, appliance repair, things of that nature. How many employees does Scorpion have and has it been doing any hiring? We’ve been doing a bit of hiring. We’ve hired practically 100 employees in the past 12 months. We are currently at about 370 in total headcount. What kind of positions have you been hiring for? All over the place. Account management, marketing development, social media, technology, coding, sales, business development. Is hiring difficult? It is not easy. There is a lot of work done on that. It’s the ability to find people not just with the right native skills and attributes but what strong experience can they bring to the table specific to what Scorpion needs at any time. That can be a challenge. What is your role at Scorpion? I am the chief financial officer so I head up the accounting department. I also hold some pieces of what is traditionally called human resources. I handle a lot of the property and real estate activities. How long have you been with the company? About three and a half years now. And where did you work before that? I was a controller for a landscape design and development company (Pacific Outdoor Living) in the San Fernando Valley. Speaking of real estate, Scorpion is starting construction soon on a new headquarters, isn’t it? For several years now one of our initiatives has been to find a more permanent home for the company. The fast growth is difficult to manage when you are a tenant leasing space. You either must over plan and lease a space that is too large or you must look for space that has other contiguous areas that you can hopefully branch out to in the future. It is just a challenge. Why construct a new building? For several years, we have had this idea that we wanted to get everyone under one roof and that one roof being our own building in some form or fashion. We have been looking primarily in the Santa Clarita Valley for the main reason that this has been the home of the company. There were other areas that also cater to digital companies, there are other areas that offer square footage, other areas that offer amenities and expansion possibilities. Because Santa Clarita has been the home of Scorpion and because 85 percent of the employees also live here it was a priority to us to find a place to sink our roots even deeper here. The challenge is the commercial real estate market has been dormant for about five, six, seven years. There is not a lot of square footage available in general. There is certainly nothing available for the footprint we require. So what did the company do? The good news is because our hunt took a few years the business continued to evolve so what we thought we needed two years ago would not be right for us now. The timing kind of worked out nicely where we found out the (land for the) second twin building to Sunkist (headquarters in the LNR Entrada Gateway Center at 27770 N. Entertainment Drive) was back on the market. So, we got involved in negotiations to get that place as our own. So you purchased an empty lot? That property was originally designed, developed and permitted for two buildings. After the Sunkist building went up, that was at the same time as the bottom fell out of the real estate market. That was in 2008. So, of course, plans to construct the second building were put on hold. When does the work start? We are going to break ground any day now. How long will the construction take? It’s planned to last about 12 months. We would be moving in toward the end of 2017. It is 100,000 square feet, four stories. It is literally the twin to the Sunkist building. Visually from the outside they are going to be identical. Inside we are taking liberties to do some customization. Can you give examples? I cannot get into too many specifics. We are going to have an on-site cafeteria. That is important to our client base but is also an effective way to keep productivity going. We will have exercise facilities there. We are going to have a digital video suite. We are doing more and more video content every month. So, a portion of one of the floors will be designed and outfitted to support all the in-house production that we do with our video properties. Is video something you are asked to do more of for your clients’ websites? The entire market is going more to a video-content driven basis. Because of the availability of bandwidth, because of smartphones, because of the nature in way people consume media, video is a no brainer. You can deliver a lot of message in a short period of time. You can hold attention with a video.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.
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