Chapter 12: Moment of Truth
I want to put a ding in the universe. - Steve Jobs
I worked full time at my quality control job during the day but on nights and weekends made, sold, and installed wheelchair lifts for vans and built Tri-Wheelers.
Then it got busy.
Still working in my parents’ garage, I designed two basic lift models: one called the Lifter and the other called the Lift-a-Way, for both Dodge and Chevy vans. These designs could accommodate a van whether it had sliding doors or doors that swung open—that is, until both Dodge and Chevy began offering a choice between sliding doors and swinging doors. Because each model had different dimensions, I had to design two more models. So, all in all, we ended up with four lift models. In addition, the Tri-Wheelers were still custom-made to fit each person's height, weight, and individual needs.
Things were getting a little out of control, even for a guy like me who flew by the seat of his pants. I was trying to design lift models so our manufacturing process could become more automated, but it was hard because not only was I learning as we went along, but also the van models were evolving at the same time. Although I had outsourced the building of parts for the Tri-Wheelers to people around town, I was still designing, selling, assembling, and delivering them, and I had not figured out a standardization process. What’s more, we were rapidly outgrowing my parents’ garage. My dad’s Marathon truck had long been relegated to the outdoors, and now my business was beginning to spill outside the building, too. What was I going to do?
I got kidney stones and went into the hospital for an operation—that’s what I did. It was exceedingly painful, and I went on disability for a short time. How painful was it? In 1901, a 6,700-year-old Egyptian mummy was found to still have a kidney stone in his pelvis. Legend has it that although this ancient man is long deceased, to this day, if you listen closely, you can still hear him howl in agony.
At that point, a logical person would have hunkered down and stayed in bed to get better, but that wasn’t me. I was ambitious, and when I saw an opportunity, I was not going to let it slip through my fingers.
That’s when I moved my business out of my parents’ garage and into a vacated John Deere dealership in town. As a boy, I used to play there with my friend John Rausch, whose family owned the building and the John Deere franchise. John and I had remained good friends, and when he told me his family wasn’t going to run the dealership anymore, I struck a deal with them. For $200 per month, on a month-to-month basis, I rented the 10,000-square-foot building and moved my business in. I paid for this with money I’d saved and from the cash flow I was getting from the sale of each lift and Tri-Wheeler. In addition, because I had so much space to work with, I was able to bring the manufacturing of the Tri-Wheelers back in-house, which saved me labor costs.
My grand enterprise had one welding table, a cut-off saw, and an iron worker called “the Little Scotchman.” I had purchased most of this equipment from Studebaker through a surplus outfit after the car company had ceased production in 1963. To put my manufacturing operations in context, consider this: in the John Deere building, we had one welder, which cost me $800; today, we have several hundred welders at many more times the cost. We had one cut-off saw, which cost me $700; today, I have many of them. I had one iron worker, which cost me $2,500; today, we use very expensive lasers and much more advanced technology.
The good thing was I was then able to house all of that equipment in a building other than my parents’ garage. The bad news was I had to house it in the John Deere building, which was filthy and leaked like a sieve. It rained more inside than it did outside. I was always concerned for whoever was working at the welding table or with any other electricity because of the water. We were constantly moving tables around to avoid new leaks.
When I finally recovered enough from my kidney stone operation, I went back to work at my quality control job. However, the pace that I’d been keeping was too much for me. I went to my boss, the same guy who had worked for me part-time on the first couple of lifts, and told him I was going to have to leave my job. I had two full-time employees in my own business, Ed Heath and Larry Rausch, my friend John’s brother, and I was going to go join them. I reasoned that my business was growing to the point that I thought I could make it on my own.
In response, my boss said, “Well, would it help if we put you on the second shift? That way, you can work all day long at your business and then come in here and work all night long.”
Nice guy, right? Then, he added, “If you’re lucky, you can get five minutes of sleep before you get up and go to your business in the morning.”
He was kidding about the sleep, but that is what he wanted me to do. He had been very good to me, a real friend who had helped me in those initial days with my business. I felt I owed it to him to do what he had in mind. Plus, I also figured it could all work out as he’d described, and of course, the paycheck wouldn’t hurt. So I said yes.
I kept up this new grueling schedule for about three or four months, until, finally, I’d had enough. After 10 years of simultaneously building my own business while working full time at my quality control job, I made the decision to go completely out on my own. When I told my boss, he gave me a six-month leave of absence, unpaid, so I could see whether my plan would succeed. He told me that if it didn’t work out, I could come back and retain the seniority I’d built over the past 10 years. It was a very generous offer, and I accepted.
That was a big moment of truth for me. Leaving the security of a steady paycheck to strike out on my own, with a new product in an undeveloped market, was going to be really risky. I had no financial backing and no backlog of orders that would give me the necessary confidence. Yet, I was very confident it would work. In fact, I was sure of it. Perhaps it was the typical cockiness and belief of entrepreneurs everywhere, but it was exactly what I believed.
Looking back, I can see how truly well prepared I was for that moment of truth. I had spent 10 years simultaneously building my business and working full time as a quality control inspector. The quality control job had honed my eye to the degree that I could look at a piece of metal and know its dimensions with as much accuracy as a trained engineer. It taught me how all of the elements of a business work together in an ecosystem of supply chain, sales, customer service, engineering, manufacturing, accounting, marketing, and so on. It taught me about business ethics and values and about what to do and what not to do. Working approximately 40 hours per week for 10 years had given me about 20,000 hours of experience. I thought of author and “pop sociologist” Malcolm Gladwell’s observation that a person becomes an expert at something after 10,000 hours; that meant I’d achieved my expertise five years earlier, and that wasn’t even counting the similar amount of hours I’d put into my own business. I was ready.
One of the first things I needed to do was incorporate my business as The Braun Corporation. I had been calling it Save-a-Step Manufacturing Company when I was making just Tri-Wheelers, but now it was growing to be a much different type of company. So in the early part of 1973, I hired Burnie Blackmon on a part-time basis to do the accounting necessary to incorporate my business. I had met Burnie when he came to take a look at my wheelchair vans, and I was impressed with him. He had owned a trucking business with his father, and because of a swimming accident 13 years earlier, he was in a wheelchair like I was. Because I had also hired another brother-in-law of mine named Buster Jensen, Burnie was employee number four, not counting me. We were doing well.
The John Deere building, however, was not doing so well. It had plenty of space, but so did the great outdoors, and with all of the holes in that building, we might as well have been outside. With that faulty work environment weighing heavily on me, I made another big decision: I would buy a building of my own and move my operations there.
The building I wanted to buy was being used by Case International Harvester to sell farm tractors. I’d heard they were vacating the building, so I knew it was going to be empty. I also knew I needed to move fast because other people wanted the building, too. It was 4,000 square feet and had an empty lot next to it where I could park customers’ vans that I was going to convert. It had only one small office, but I figured I could stuff us in there until we grew enough to get some bigger space. The price was going to be $25,000, which was a fortune to me—a couple of years earlier, I had bought my van for $3,200 and thought that was a huge amount. The big question for me was the money. Where was I going to get it?
Like many small-business owners, I went to the bank: First Union and Trust Company, the only bank in town. When I told John Mahan I was going to secure financing so I could buy the Case building, he warned me they probably wouldn’t give me the money, but I might as well try anyway.
I made an appointment with the president, Ralph E. Horner, a white-haired, 60-year-old man in a dark pinstriped three-piece suit. He was known around town as a real Ebenezer Scrooge, a crotchety guy who was stingy with both the bank’s money and his own. He was part of the Winamac old-boy network, or “town fathers,” as we used to call them, and they detested the idea of development that didn’t have to do with farming. Only four other businesses in town were not farm-related, and people like Ralph Horner resented every one of them. There I was, trying to get a loan to buy a building that used to have an agricultural business and turn around and use it for a non-farm-related business.
With that as a backdrop, I went to the bank. Ed Heath pushed me in a manual wheelchair because there were no curb cuts and no ramps, which meant I wouldn’t be able to get into the building otherwise. As I waited for Ralph Horner, I did not feel confident. Sitting in a manual wheelchair and having to rely on someone to push me around put me in an unfavorable negotiating position.
You might think I went to that meeting with my business plan in hand, with costs, sales projections, profit, market share, and everything else that would help me make my case. I did not. I had the information, but it was all in my head. In my naiveté, I thought my word and my honor were enough for the bank to give me a loan. I learned, very rapidly, that the financial world didn’t operate that way.
Mr. Horner dispensed with any pleasantries and got right down to business. “What’s your asset value?” he asked.
“Well, I have a van that’s fully paid for,” I replied. “It’s 3,000 bucks worth. I have equity in my house, which I paid $9,000 for.”
“Nine thousand dollars is how much you bought the house for,” he growled. “How much equity do you have?”
“I have a 33-year mortgage, and I’m paying $50 a month,” I said. “So I …”
He huffed dismissively. “Why did you quit your full-time job?”
“I started this business building Tri-Wheelers 10 years ago,” I said, “and now it’s grown to include these lifts, and it’s getting pretty big.”
“But nobody’s ever done this before!” he barked.
“Well, no,” I said. “You’re right. I’m the first one.”
“What makes you think you can do it?” he asked.
“Well, I’ve been doing it for 10 years already with the Tri-Wheelers and a couple more years with the lifts, and now …”
“What happens when you sell to everyone who needs one of these contraptions?” he sneered. “What happens when you don’t have any more business?”
“If that happens, then I guess I’ll go back to work at my quality control job,” I replied. It seemed like an honest, sensible answer.
He frowned and looked at me condescendingly. “You should have stayed at your job. Listen, you might as well save me the headache and go back there, because there’s no way I’m giving you a loan.”
I left there with my tail between my legs, but I learned an important lesson: you’re never as good at winging it as you think you will be.
I may have been shot down on my first attempt, but I wasn't going to let one “no” get in the way of what I wanted to accomplish. That didn’t mean I was going to wait and get my information together so I could approach other banks; I assumed I’d run into the same negativity there, too, no matter how well I prepared, and I was a man in a hurry. Instead, I went back to the owner of the Case building, Dick Fahler, and tried to work out a different kind of deal.
Dick was known as a shark that preyed on the weak, on people who needed financing but couldn’t get it through other means. Like a real shark in the ocean, if blood was in the water, he was there. In this case, the blood in the water was mine, because he knew I wanted the building and had gotten turned down at the bank—in a small town, everyone knows your business. People in town warned me about him, but I didn’t feel like I had much of a choice because I needed to get out of the John Deere building.
I asked Dick whether we could work out a rent-to-buy situation, but he had something different in mind. He wanted to give me financing in exchange for part ownership of my company. In other words, he would hold the mortgage as a land contract in exchange for taking an equity stake in my business. I said no—but I thought it was interesting that the bank had just determined I wasn't a good investment, by turning me down for a loan, but here was this guy wanting to own part of my company. Then I remembered he was a shark, and that’s what sharks do: they make the terms so favorable to them that they can’t lose. For instance, I don't remember what the interest rate was, but I know it was sky-high. In addition, part of the agreement stated that if I defaulted on my payments, he would get the building back. That way, he could get money from me for as long as it took for me to default on my loan—and then get the building back. He figured that would probably happen in two years at most.
I felt confident we would succeed and said I’d agree to his terms if he put in a clause that gave me the option of paying on an accelerated schedule without any early repayment penalty. He chuckled and agreed to what seemed to him like an absurdity because he thought I’d never make the payments, let alone accelerated payments. Other people in town felt the same way about my prospects and were mad at Dick because they thought he took advantage of me. One other man in town, George Zahrt, had wanted the building for himself and was willing to pay cash but at a lesser amount than I was willing to pay. Besides, Dick wanted to bleed me for a while first. When George heard I got the building, he said, “Well, that’s all right. Those boys over there in the wheelchairs won’t last long, anyway. I’ll probably get the building at a better price later on.”
By “the boys in the wheelchairs” he meant Burnie and me. To make a long story short, we moved into the Case building on June 1, 1973, and paid off the loan in record time. When Burnie handed Dick the payoff check, Dick mumbled some indistinguishable words and then said, “I thought I was going to get this building back!” He didn’t say congratulations, and we didn’t say “I told you so” because we knew in our hearts that, once again, we had confounded the critics and shocked the skeptics—and we were just getting started.
Continue Reading Rise Above:
- Rise Above: Prologue
- Chapter 1: Dirt Farmer's Son
- Chapter 2: As Heroes Go
- Chapter 3: Barriers and Bridges
- Chapter 4: The World as a Classroom
- Chapter 5: Moon Shots
- Chapter 6: Adventures in Machine Making
- Chapter 7: Changing Times
- Chapter 8: Of Mentors and Men
- Chapter 9: Neither Rain Nor Snow
- Chapter 10: Sparks Fly
- Chapter 11: Crazy Good Times
- Chapter 12: Moment of Truth
- Chapter 13: Ready, Willing, and Able
- Chapter 14: Pioneer Spirit
- Chapter 15: The Fire
- Chapter 16: Out of the Ashes
- Chapter 17: Back to School
- Chapter 18: It's a Small World
- Chapter 19: Let's Make a Dealer
- Chapter 20: Inventing the Future
- Rise Above: Epilogue