Supplying energy-storage solutions for clients with some of the world’s most demanding energy-storage challenges requires a level of innovation not every business owner has to contend with.
For Jeff Kostos, president and CEO of Spear Power Systems, his own company’s survival— and often that of his clients— depends on staying ahead of the game. The company he co-founded with Dr. Joon Kim in late 2013 designs and manufactures high- performance, advanced battery systems for the Department of Defense as well as the marine, oil and gas, and mining industries.
Kostos’ more than 25 years’ experience in the energy industry has given him a perspective on what it takes to be competitive: product differentiation, a strong team and financial partners who are willing to invest in innovation.
Not content with the state-of-the-art, Spear’s team constantly looks for ways to expand the boundaries of power, energy, temperature and safety. For example, most mining vehicles rely on internal combustion propulsion, which produces emissions that must be removed and replenished with fresh air for the mine workers. A high infrastructure cost is associated with that process. Spear works to reduce the cost, improve safety and boost productivity by developing batteries for electric mining vehicles.
Kostos pursues a strategy of focusing on high-value, fast-growing niche markets where there are few competitors, rather than on high-volume opportunities such as automotive.
“Safety and high-energy or high-power density solutions are the things that differentiate us in the market from a products standpoint. We spent a lot of R&D money and investment in that area, and we came up with some really good ideas and intellectual property,” Kostos said.
About half the Spear team has been together since the company was founded. Kostos said that core of experience has allowed the company to create a very good network of industry relationships that help them stay on top of technology advances.
“It’s easier to stay in tune with technological developments within our industry when you have a very good network,” Kostos said. “When you have a good reputation, people are more transparent and share information.”
Power of Banking Relationships
Spears is tracking nearly 60 percent revenue growth over 2017, and its opportunity pipeline has quadrupled over the past 18 months.
One of the ways Spear finances its growth is through its relationship with Equity Bank.
“We originally started with a big-box bank,” said Kostos. “They didn’t visit for two years and therefore didn’t understand our business. It became evident to us that we needed different banking tools to support our growth. If you don’t know the business or understand the business, you can’t provide the right tools. So we switched to Equity, and it’s just the complete opposite experience.”
He said Equity asked a lot of great questions and listened to come up with the right solutions to finance Spear’s growth. They’ve used a working capital line of credit, an SBA export working line of credit and other tools.
As Kostos looks toward the future, he likes what he sees. Spear has received contracts for the first fully electric ferry boat in the U.S. and the first two hybrid-electric ferry boats in the U.S.
In January, the company moved to a new facility that is five times larger than its previous one.
Kostos said they are studying expansion beyond their existing footprint so they are prepared if they need more financial or human resources capacity.
“The biggest challenge is managing how fast we scale operations and still maintain the quality and competitive lead time, provide best-in-class responsiveness, etc., and provide the human and financial resources to support that. The challenges when you’re growing are much better than challenges when you’re shrinking. So we’re quite excited.”
Share Your Napkin Story
Some of the most amazing business stories started as an idea scribbled on a napkin.
Mark Parman, Kansas City Market President of Equity Bank, invites you to share your Napkin Story. “We not only want to hear your origin story, we can help you continue to write the rest of your company’s story,” he said.
Equity Bank is a full-service community bank with offices in Kansas, Missouri, Arkansas and Oklahoma. Our bankers are experienced with businesses from small
to large. We take the time to listen to your story and help you design the services that will benefit you and your business.
To share your napkin story, get in touch at firstname.lastname@example.org or (913) 323-9300.