|
How a
20-something entrepreneur built a $50 million company from the underground up
Business New Haven
02/09/2009
by Michael C. Bingham |
|
|
|
|
| |
|
 If you're not growing, you're dying.
- Larry
Janesky
If they are candid enough, most business owners would
admit that they are too busy working in their companies to effectively work on
them.
Not Larry Janesky.
Janesky never spent a minute in college,
but he is smart enough to have built a $50 million company from the ground up -
actually, from the underground up. As founder and CEO of Seymour-based Basement
Systems Inc., Janesky's outside-the-box business acumen has attracted the
attention of luminaries such as In Search of Excellence author Tom Peters, who
two years ago tagged Janesky a business "MVP" and placed him in the company of
such then-high flyers as Carly Fiorina of Hewlett-Packard and California Gov.
Arnold Schwarzenegger. Noted Peters: "[I] love it when there is a superstar
performer in a mundane business. Larry Janesky has built a $50 million,
fast-growing enterprise in the business of providing dry basements that are free
of nasty mold and available as another (big) room in one's home."
To be
fair, "mundane" may describe the average basement, but is hardly an accurate
description of Janesky's company, an exemplar of excellence and innovation.
Janesky's never-ending drive for continuous improvement distinguishes him from
his peers, and has earned him the title of 2009 Businessperson of the Year from
Business New Haven.
Compared to most CEOs of companies the size
of Basement Systems, Janesky's career has followed an unusual trajectory. The
44-year-old was born on Bridgeport's East Side. He attended Bullard Havens High
School, graduated and went straight to work as a carpenter. He has never
attended college, not so much as a night class.
Also odd is the fact that
he has been an employee for all of 30 days in his entire career, during which
time "All the [boss] did was swear at me," Janesky recalls. "I figured I was
better off on my own."
Over the five-year span between high school and
founding his company, Janesky graduated from simple carpentry jobs to building
homes. "Back in 1986, kind of like now, the housing bubble burst," Janesky
recalls. "Since no one was buying houses then, there was no sense building them.
So I had to find something else to do.
"The last house I built had a wall
crack that leaked," Janesky continues. "We fixed it and moved on, but in the
process I became interested in the basement-waterproofing field and got into
it."
So in 1987 Janesky founded the waterproofing company Connecticut
Basement Systems Inc. out of his 900-square-foot Devon home. "I'd be brushing my
teeth in the morning and the first employee would be walking in the door,"
Janesky recalls.
Originally the company installed basement waterproofing
systems, plain and simple. And business was good: Within 12 months, "We moved to
a building in Stratford [on Lordship Boulevard], and we just kept growing so
fast and needed more space that we moved five times in 11 years," said Janesky,
who purchased the 92,000-square-foot facility in Seymour in 1998.
But in
1990, three years into his new business, Janesky saw an opportunity to revise
the business model, a decision that would supercharge the company's
growth.
"I observed that there was a lot of room for improvement in every
area - products, training, innovation, service, marketing," he says.
So
Janesky began to design and create products to help keep moisture out of his
clients' basements and crawl spaces. But even as he grew that business, Janesky
made a logical leap that only the elect elite of entrepreneurs discover: "We had
some pretty good ideas, but I realized: Maybe some other waterproofing
contractors would like to use the products we had developed. So we started
calling them."
While other waterproofing contractors were trying to
recruit dealers, "I knew that we could do it a lot better," Janesky says. "That
gave me the confidence to go out there and invite recruit
dealers."
So he did, and today that dealer network is more than
300 strong, selling the company's products and services throughout the U.S.,
Canada, the U.K. and Ireland. Basement Systems earns the bulk of its income
selling products and supplies wholesale to its dealers. (Its subsidiary,
Connecticut Basement Systems, continues to perform "retail" basement and
crawlspace waterproofing.)
"We learned as much as we could about what our
customers were looking for, and what they thought would be great that did not
exist yet," explains Janesky. "That made me think about new products - new and
better draining systems, new and better sump-pump systems, basement flooring
systems, basement wall, paneling and covering systems, basement window products
- we innovated in all those areas and took the industry to a whole different
place than it had been before."
Over the years Basement Systems has
devised a number of "breakthrough" products for basement waterproofing. Among
them, Janesky explains, is a drainage system called WaterGuard, which creates a
space between the floor and wall to drain moisture. The product "works better
and saves [homeowners] money" compared to competing products, he says. "We've
installed 1.5 million feet of it, and it's a giant success."
Janesky also
praises Basement Systems' sump-pump systems, which he says "are the best in the
world. We've made them better and better over the years, so now we can provide a
homeowners with peace of mind that when it rains, they're not going to get
flooded."
Nevertheless, Janesky is clear about one thing: "Just providing
products doesn't get you there."
Instead, he explains, "Our job is to
make our dealers successful. It's an alchemy of products, training, sales tools,
marketing tools, the culture, that we can create for our dealers so that they
can be successful. They don't want products. That's only the means to an end.
They want products to run their business. They want to run their business to
make money. They want to make money to be successful - not only in making money,
but by providing a place for their employees in Madison, Wisconsin, or Calgary,
Alberta or Charlotte, North Carolina with a good place to work and a successful
career."
Today in Seymour's Silvermine Industrial Park, some 150 Basement
Systems employees work in departments ranging from national customer service,
production and service dispatch, basement training center, research and
development and administration.
On the retail side, "We fix over 2,474
basements a year [in Connecticut, Massachusetts and parts of New York] and our
office in Connecticut is the largest individually owned waterproofing company
anywhere in the world," Janesky says.
There are four companies under the
Basement Systems umbrella: Connecticut Basement Systems; Total Basement
Finishing (TBF), a network of basement-finishing contractors that sells the
company's proprietary products through some two dozen dealers; the Omaha,
Neb.-based Foundation Support Works, which works to address structural problems
with building foundations; and the flagship division, which is eponymous with
the corporate name, and has a nationwide dealer network. "We operate very
similar to a franchise, but we're not a franchise - we're a dealer network,"
Janesky explains.
To visit Basement Systems' 92,000-square-foot
headquarters in Silvermine Industrial Park reflects how its founder perceives
the company. Different is a positive value here. Much of Basement Systems
headquarters is standard-issue open floor plan, with one striking exception: the
Treehouse, which houses the company's Internet department and manages 130 Web
sites for Basement Systems and its network of dealers. The space was remodeled
just last December "over 15 14-hour days in a row," Janesky explains. "We took
it from drop ceiling and blue walls to this," he gestures with a sweep of his
hand to what looks just like a sprawling treehouse with hidden nooks and
concealed spaces. "Before we had 12 workstations, and it seemed crowded. Now we
have 28 and it's more open. We have a very diverse and talented team." Janesky
calls it "the most unique work space in the United States," and it may be.
Certainly on one recent weekday the employees who work there are smiling in
their cozy new digs.
The headquarters building also houses two large
training spaces that can accommodate up to 225 people for twice-monthly training
sessions in subjects such as marketing, production, customer service and
more.
It's not hard to see why Basement Systems flies high, its
earthbound mission notwithstanding. Employees stay for a long time. The company
has a keen sense of its own mission, culture and history, and workers embrace
that shared culture and transmit it to newbies. One wall is a visual timeline of
the company's history - an informal sort of corporate scrapbook with newspaper
clippings, snapshots, etc. organized by year to commemorate Basement Systems'
growth and maturity.
Basement Systems' workers voted their employer one
of the "Ten Best Places to Work" in a 1997 Hartford Business Journal poll. One
reason might be the company cafeteria, which recalls a 1950s Happy Days-era
diner, complete with jukeboxes in each red-leatherette booth.
"We try to
make this a fun place to work," says Janesky as he shows a visitor the
cafeteria. "We also want to make a good impression on our dealers, who
essentially are our partners when they come here once a year. Then they go back
to their territories and remember our culture. We do our very best to make a
good impression and get them to feel that they joined the right
team."
Recession or no, Basement Systems continues to surge
ahead. Just last year the company built a $4.5 million, 57,000-square-foot
adjacent building housing 7,000 square feet of office space complementing the
warehouse space. "It's bigger than a football field and 30 feet high," Janesky
crows.
Right next door are four loading docks to service Basement
Systems' fleet of 35 trucks that deliver Basement Systems' products to
distributors hither and yon. "We ship our 85 pallets' worth of material a day to
our dealers, so we're doing quite well," says Janesky. The actual manufacturing
is outsourced to a web of subcontractors.
While some light assembly is
performed in Seymour, the key to the company's success and the core of its
mission is product design. Jenesky says his company holds 25 patents on key
products such as sump pumps and dehumidifiers, with more pending. "Our specialty
in adding value is in innovation and business systems to be successful in this
business," he says. "That's the only way we make money, is by selling products.
We're not a franchiser and we don't collect royalties."
So, how did Larry
Janesky learn all this stuff that no one had been able to figure out
before?
"It's common sense," he says, modestly. "I personally get bored
doing the same thing over and over again. So I continually ask: 'How can we do
something really cool today? How can we do something much better than it's ever
been done before? How do we re-invent something to add value along the
way?'
"There are hundreds of places you can innovate in your business,"
Janesky says. "Most [business owners] see it as motions that you just go through
- but I don't see it that way."
And this part is key: "Every process is
an opportunity to add value," he explains. "Not just in the product, but in the
way you pay people, the way you communicate to your customers, what your
products look like, colors - something as simple as taking what the whole world
thinks should be a black part, and making it red. It jazzes things up a little
and tells the world, 'Hey - we're different.'"
http://www.conntact.com/article_page.lasso?id=42617
|
|
