There have been times where I’ve wanted something so badly that it’s made me stupid, or cocky, probably both. Which wouldn’t be so bad, and perhaps might even be excusable, if I learned from the experience and then never did it again. But I haven’t, and still don’t, at least not always. Maybe you can relate. The same kind of thing has happened to me too many times when I’m driving. I know that turning left here is not the right way because I’ve done it before, and it was wrong. So, what do I do? I turn left – same action expecting a different result – I feel like Einstein had a definition for that.
Occasionally, these wants were acquisitions, opportunities to grow quickly . . . and easily (because what’s easier than an acquisition, after all). Two of my ‘want something so badly’ times were similar in many (in fact too many) ways, proving that just because history may repeat itself, it doesn’t mean that I will recognize that the repeat is about to happen. I’m good at being “blind” when being so suits my aspirations.
Both happened in Northwest Indiana, about 8 years from one another. Close enough to remember the lessons from the first, but far enough apart to take the same left turn I already knew was the wrong way. It might be fair to chalk the first one up to inexperience, but there’s no way to get around the fact that the second was results of full-blown hubris blended with a little ‘we’re the smartest guys in the room’ stupidity.
We Can Fix This
I’m with Larry, my partner in crime, so to speak, as we roll into Michigan City, Indiana, a cousin to Gary, on the south shores of Lake Michigan. We’d been interested in expanding our fledgling waste empire in the Hoosier State and were hunting an acquisition that could establish us there. And here it was . . . a doublewide office trailer and a small pole building – or was it a Quonset hut? We looked at each other, like Jeff Spicoli looked at Jefferson’s brother after crashing Jefferson’s Z28 Camaro in the movie Fast Times at Ridgemont High
With a wink of confidence, and without words, Larry and I brain-traded Spicoli’s seemingly confident (but totally bull***t) line, “We can fix this.”
Our knock on the trailer door was answered by the anger of two barking dogs. Should have been strike one, because this was before “take a dog to work” – or everywhere – fascination had taken over.
“Hope you like dogs?” the owner of the establishment asked, as he opened the doublewide door. And if we didn’t? I digress.
“Of course,” we said. After all, this was our first date, have to be on our best behavior. Can’t call the baby ugly or the dogs intimidating, if you know what I mean. (Turns out they were friendly in a jump-up-on-you-with-dirty-paws kind of way.)
We pushed on, persevering through the tour of the yard and the processing plant, the former of which was littered with trucks and trailers in various stages of decay, and the latter, full of barrels of waste stacked floor to ceiling. The ‘processing’ relied upon a mini cement-type mixer, about which the owner and his son, who operated said processing equipment, were quite proud – despite the evidence that its production capacity was clearly inadequate for the demand, at least according to the inventory.
“We can fix this,” we said to each other, this time in words, as we drove back to the tollway oasis where we’d met earlier. “We can fix anything.”
Fast forward a few months. We bought the business and (you’re not going to believe this), as it turns out, we couldn’t fix it, even though we got it for a song. I remember telling the bank that even if this business is a total loser, we’re paying so little that we’ll still come out ahead.
Foreshadowing, probably. Wishful thinking, maybe. Stupidity, clearly.
We should have listened to Karen, our CFO, who, after a day of due diligence in the double wide with the dogs, asked me, with some concern in her voice, “Are you sure we want to do this?”
“We can fix this, Karen,” I assured her.
The truth is that we got the place cleaned up and the excess inventory gone. Their super machine was not much help, so we had to truck all the barrels to our plant in Milwaukee. Mission accomplished, but then what. Oh, did I mention that nearly everyone at the company had some family relation to the owner? No problem. “We can fix that,” after all.
We realized in the first week that we’d made a big mistake. Not lethal, but big. We didn’t talk about it, because there was nothing really to say. Within six months, maybe it was a year, we had closed the location. We kept the trucks and a couple of drivers who could pass the drug test and show up (mostly), although we struggled daily with Michigan City being on the EST/CST border, meaning we had people living in the Eastern Time Zone while our dispatch operated in the Central Time Zone. Another recipe for disaster that we’d missed in our “extensive” due diligence.
Let’s Try That Again
Larry and I weren’t done yet. Northwest Indiana was important to us. We had to find a solution that worked. That next “opportunity” came to us, and this time it was in the city of Gary, which was not necessarily an asset. Fortunately, we’d recently started an operation nearby, so this Gary operation was easily movable into that location in Portage. A perfect ‘tuck-in’ we thought – instant scalability. No problem. . . we can fix this.
This Gary company was what the automotive industry might call a “clean one-owner” compared to the Michigan City model we’d already bought. Of course, everything is relative. Gary turned out to be a smoking in the office and a staff of spouses, sons, cousins, aunts and uncle’s kind of place. No dogs, but I think there was a family of barn cats living in the shop.
Oh, and one other thing – they had an owner; that is, a 100% owner – and another owner (in reality, he was actually a “thought I was an owner” – which was another thing we hadn’t dealt with before) who, in reality owned nothing. A different kind of challenge. No problem, we can fix this.
“Michael’s told us that he’s an owner?” we asked the owner.
“He’s not an owner,” the owner responded.
“Well, we need him because he runs the whole operation, and he thinks he’s owed a portion of the sale price. How do you intend to make that right?” we continued.
“I’ll make it right by Michael,” the owner promised, and we trusted that he would.
He didn’t, at least not to Michael’s satisfaction.
It took maybe two weeks before Michael joined another company and took most of the employees and the customers with him. He left us the undocumented workers who had the fake social security cards we relied upon for their I-9, and the ones who found him creepy. Clever.
Hmmmm. . . we pondered (attempting to deal with the fact that we’d been outsmarted by a guy we thought we were smarter than). What exactly just happened?
It was another one of our many (at least in retrospect, it seems like many) WTF moments. How the hell could we be so dumb? It stung, more so because it was completely self-inflicted. We were caught in a want that was stronger than our will. It was another “we can fix this” fable we read to ourselves and believed.
I’d like to tell you that Larry and I learned our lesson, finally, from this Gary experience, so I will. Actually, I think we did. It led us to developing a more intelligent acquisition decision-making process, one filled with questions that had to be answered and boxes that had to be checked. No-Go’s were more clearly defined. We ditched our Spicoli “we can fix this” self-delusion. If the matrix said it’s a yes, we went ahead. If it said it was a no, we stopped. . . mostly.
After all, “stupid is no way to go through life.” Dean Wormer words of wisdom to which we should have afforded more attention.
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