Air Date: 8-18-2017|Episode 473
Today on IAQ Radio we bring out of the archival vault the Z-mans favorite episode from 8-13-2010, Episode 177 with Claude Blackburn. We are calling this one “From humble beginning to raging success, a candid conversation with the Dri-Eaz Products Founder”.
Today on IAQ Radio we bring out of the archival vault the Z-mans favorite episode from 8-13-2010, Episode 177 with Claude Blackburn. We are calling this one “From humble beginning to raging success, a candid conversation with the Dri-Eaz Products Founder”. Radio Joe and the Z-man will be back live next week but do not miss this classic. Claude Blackburn became involved in the cleaning and restoration industry in 1972. Through a combination of courage, determination, hard work and creativity he founded and built Dri-Eaz Products (based in Burlington, Washington) into a business and brand recognized globally as a leader in structural drying. When Claude sold Dri-Eaz in 2006 it had almost 200 employees, 150 distributors and sales of 50 million. LEARN MORE about this remarkable man and how he built his company this week on IAQ Radio!
An inspiration to and model for many
Horatio Alger Jr. was a prolific 19th-century American writer, best known for his many novels about impoverished boys and their rise from humble backgrounds to success through courage, hard work, determination and creativity. His writing characterized the “rags to riches” narrative. Horatio Alger’s stories are imaginary today’s story is real.
Claude Blackburn never went to college. He left home at 16, lived in his car for a couple weeks, before dropping out of high school.
In 1970 when a salesman fronted her dry foam machine and vacuum cleaner; Claude’s mom started a carpet cleaning business in Everett, Washington. Claude got into carpet cleaning industry the same way and ended up in Mt. Vernon, WA because he could rent a home there for $35 month. He began knocking on doors to get carpet cleaning jobs.
At 19 years old, Claude was married with 2 kids and living in Skagit, WA. This was the lowest of the low points in his life. The utilities were shut off, the family was hungry and Claude needed help so he decided to apply for welfare. The official at the welfare office asked him what he did for a living and Claude told him he had a carpet cleaning business. The official then asked him for a balance sheet. Perplexed, Claude asked him what a balance sheet was? The official explained that you have two columns, in one column you list what you own and in the other you list what you owe. Claude dutifully returned the next day with the sheet filled out. After reviewing the sheet, the official told Claude, you have equipment; in order to collect welfare you must sell your equipment. Claude needed a helping hand and couldn’t get it. With no bridge to go backward and no helping hand to go forward; Claude persevered and worked his way through it. The rest is both history and a great story!
Nuggets mined from today’s episode:
On credit, in 1973, he purchased a MR STEAM model 44. A hot water extraction carpet cleaning machine that sprayed solution and vacuumed it up. The machine had a powerful vacuum motor for extracting spent cleaner and dirty water. Claude began telling people about an additional service he could provide; in the event of a water damage emergency he could suck up the water. 11 units in an apartment building flooded and Claude was hired to remove the water. After extracting as much water as possible, the insurance adjuster told him to remove the carpet, remove and dispose of the pad, and have the carpet cleaned dried & reinstalled. Claude and his team dutifully carried out the adjuster’s orders. They carefully, cut the carpet at the seams, and took it to Ace & Cartozian for in-plant cleaning & drying. The carpet shrunk in the process and it was only with great difficulty that they got it reinstalled. Claude thought there must be a better way.
Reading has always been a big force in his life and in his personal growth and self- improvement.
At a Rug Cleaner’s Institute of the Northwest convention and trade show, Claude met Lloyd Weaver, listened to his sales pitch about drying carpets in-place and bought a pair of Porta Dryers (airmovers) from Lloyd.
Claude hones his craft. We were lucky we had the Skagit river. It would overflow often and flood from a few homes to sometimes as many as 50, with from 4 inches to 4 feet of water. Many lessons learned in a practical way.
Birth of Dri-Eaz. Claude’s Carpet Care was run out of his home. At that time, carpet cleaners used small wooden blocks to separate heavy wood furniture from wet carpet to allow drying and prevent staining. Claude had carpet cleaning jobs to do and had run out of blocks. Coincidentally, a UPS delivery arrived and there was Styrofoam sheeting in the box as packing. Claude set out to cut the Styrofoam sheeting with a saw into suitably sized blocks. Feeling that foam blocks were superior to wood blocks, Dri-Eaz Products was born and the firm’s first product EazBlocks was conceived. Claude developed a process to uniformly cut foam into blocks and direct mailed a sample box to everyone in the SIC code for professional carpet and upholstery cleaners (24,000 people). He got stacks of checks for $27 in the mail.
It was 1978 and Claude was concerned about knockoffs of his EazBlocks. 50% of the net income of the business was from water damage. Feeling that water damage was the subject he knew most about he created the firm’s second product, the metal Hydra Dryer 1. He continued using direct mail, he sent out a flyer EazBlocks on one side and the Hydra Dryer 1 on the other. This began the focus on drying technology.
Must any idea be new to be successful? For me we had lots of ideas from many sources, employees, customers, distributors and I had my own ideas. The biggest issue was execution. Converting the idea to serve people and make money. I have strong feelings that it’s all about execution.
Standing in a lunch line at a convention, a carpet cleaner came up to me and said, “Claude I have a great idea that’s worth a fortune, how much will you pay me for my idea?”Claude’s response was, what’s the idea. “I can’t tell you what it is because you’ll take my idea.”Claude’s advisory parting words, “go ahead, do your idea, and remember it’s all about execution.”
51% rule. I’ve made a ton of mistakes. After making many mistakes, I developed the 51% rule. If I got things right 51%, I would be able to stay in business. It’s important to learn from mistakes and even more important to allow associates to make mistakes that they will learn from.
Vision- a future state that you can see. It’s where you want to go. The vision can seem almost impossible to attain in your current reality. It’s a fundamental purpose. Where do we want to go can be a farfetched dream that can create direction and drive people and an organization. Our vision to be the preferred brand and worldwide leader for the customers we serve. That vision drove us to open up in 20 foreign countries.
Mission- why do we exist, what are we doing now. Our mission was to provide innovative drying solutions. Manufacture the best quality equipment.
Values- what’s important, value customers, value our associates
Our companywide mission, vision and values statements were created by teams. While I led the drive to create them, I didn’t manipulate it. The majority of staff bought into it.
From your perspective have the biggest industry improvements been in the form of equipment or education? Both are very important, education has grown from a day seminar to week long facility based hands-on courses. Equipment is dramatically improved- better meters, different types of air movers and dehumidifiers.
Making a statement. We built the world’s first trailer mounted dehumidifier to send the message that Dri-Eaz was a serious manufacturer. We didn’t know how many trailers we would sell. The trailer demonstrated that big equipment could dry big buildings.
Covey principles- Something profound happened in 1994, I terminated my sales manager due to a lack of trust. Unexpectedly, the entire sales department was surprised and some resigned. This caught me off guard. I thought the employees would be loyal to the founder, owner and president. Wrong! The staff was loyal to the sales manager. Maybe it was me? Maybe I wasn’t that good of a leader? Maybe I wasn’t competent as a manager? Maybe I wasn’t doing the things for the people and what they wanted? I got turned onto Stephen Covey and thinking about myself and people in a whole new way. Serving the customer isn’t the most important thing. We need satisfied and empowered associates contributing and making a difference. People shouldn’t come to work in fear of losing their jobs. I then became directly engaged in the culture of the company, working with people, implementing programs around associates.
Management philosophies beyond Covey. Empowering people, staff are called associates not employees. Empowerment is allowing people to make decisions and fail. Bosses know more or think they know more and want to make all the decisions; this disempowers others. Allow people to fail and grow with what they will learn from it.
Sharing with people- willingness to really share. Profit sharing. We always had gross revenue sharing. The company grew from $160K in gross sales to $50 million. I was the only person responsible for profit. While we grew like crazy, we didn’t make much profit. I decided to share the financials with the company associates openly and with integrity. Every quarter the associates would receive a check. That decision made me the most money of anything I ever did. Most other business owners are afraid to share the financials, I made more money in the five years after implementation than in all the years before.
Do MBAs know more about business? There are many successful businessmen and opportunities for business success in America. For me, business is where the action is. There are unlimited opportunities for anyone who wants to play. I started hungry, with no support mechanism and no one to turn to who could support us in any way.
Tools to attract, recruit, hire, retain and motivate great people. Revenue sharing, 360° degree anonymous reviews for everyone including the owner, guaranteed annual review process, empowerment, work/life balance, medical insurance, employee satisfaction surveying, paid time off (sick time doesn’t have integrity. Don’t make employees lie.)
Fear of public speaking. I could talk comfortably to Mrs. Jones in her living room about carpet cleaning, I could also talk to Mrs. Jones and her husband, but I couldn’t talk if the neighbor came over. I might be the first person to drop out of Toastmasters, I couldn’t talk because there were 5 people. I eventually did what I had to do to build my business. I began teaching schools, I did the convention circuit. I still have discomfort with it. I always did what I had to do: to do the right thing and build the business. My being on the phone line now is uncomfortable for me.
Biz consultants. Life changes, people change, sometimes we aren’t the same people we were 20 years before. At Dri-Eaz I believed that we should do everything in house. Designing, engineering, manufacturing the products, marketing, advertising, everything. We built everything in house. I didn’t really believe in consultants, I thought they were expensive. I was seeking good value, I would rather hire people. I met Dick Gillespie and was introduced to his Work/Life program. After negotiating his fee from $1,000 to $600 a day, I hired him to conduct a management review. He spent dozens of hours interviewing the people finding out who we were, what we do well, and where we need to improve. Dick did great work at Dri-Eaz. Work/Life became the foundation of our business culture. Dike Gillespie later became GM, VP and finally president of Dri-Eaz.
Patents are limited in nature and limited in value. In patent litigation whoever has the most money either wins or economically grinds the opposition down. Innovation and technology isn’t always new, we take it from another industry and make it right for restoration. The game of business isn’t about legalities, it’s about serving customers. The game of business is about execution, marketing and communication. When you don’t have money to spare, put the money where it will do the most good.
You didn’t invent the airmovers, what tactics did you use to succeed? Frankly, we couldn’t sell our Hydra Dryer we only sold 3 after mailing every carpet cleaner in the USA. Within a year we developed the fiberglass air mover. I made a big mistake, I sent out a national mailing return postage guaranteed and got 22% of the mailers back. Carpet cleaning businesses are traditionally slow in the winter in cold climates. My personal mission became to help carpet cleaners survive the winter by getting into water damage. The competitive water restoration class was $250, I wanted to help everyone so we offered a $98 class. The class was low cost and great value. We continued using heavy direct mail marketing nationally. We are proud of our long list of product innovations and industry firsts. I wanted to grow the business by helping customers.
Are you surprised with the size of the airmover market? In the mid-1990s at our national distributor meeting I told distributors that we’ve put over 50,000 airmovers into the industry and that airmovers sales are at saturation, telling them in order to survive they must focus on selling dehumidifiers.
We were off the radar of the big, big companies, like HydraMaster and Prochem. Carpet cleaners had to save up the money to buy their first couple carpet dryers. Rental fees paid for the equipment in a couple of day, and they would buy more. Joe’s Carpet Cleaning morphed into Advanced Restoration, with 200 dryers and 50 dehumidifiers today.
How have you tried to give back to the industry? All the time I was in the industry I felt I always was helping people. We wanted to help carpet cleaners survive the winter. It’s hard to build a world class business without a higher purpose.
[Claude is too humble to mention that he either personally or through Dri-Eaz has underwritten the cost of industry scientific research, donated to a restoration endowment fund at Purdue and to the ASCR/RIA Legacy Fund. Many hours of selfless volunteer time ASCR/RIA and IICRC. A pure motivation to help raise the level of industry education.]
What about “silver bullet” tools such as heat drying? The truth is since I sold out, I haven’t followed the technology. I’m not engaged with the company and I don’t visit. New people are now running the business.
Whatever tools work, work. We need to be careful to really test products and techniques at both the corporate level and individual level in the field. Take extra time to evaluate products and processes. I wouldn’t take anyone’s word for it without doing my own testing. How well did it work? Would it work better a different way. Become little scientists in our own right. Air flow, temperature and RH effect drying everything. The basic science stays the same.
There are lots of opportunities for people who want to be in business to get into business. For me, getting into business is the thing to do. Serving people is bigger than us. Serving others, is a greater purpose, serving humanity.
Z-Man signing off