This week Craig joins Art Wing the Co-chairman and President of Little Giant Ladder Systems to discuss the history of the business as well as how it has become the multi-million dollar company it is today.
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TRANSCRIPTION:
Speaker 1:
From his first job flipping burgers at McDonald’s and delivering The Washington Post, Craig Willett counts only one and a half years of his adult life working for someone else. Welcome to The Biz Sherpa podcast with your host, Craig Willett. Founder of several multimillion-dollar businesses and trusted advisor to other business owners, he’s giving back to help business owners and aspiring entrepreneurs achieve fulfillment, enhance their lives, and create enduring wealth. The Biz Sherpa.
Craig Willett:
This is Craig Willett, The Biz Sherpa. I’m grateful that you’d join me today for our podcast. We have a real special opportunity to be at Little Giant Ladder Systems with Art Wing, the son of the founder, Hal Wing. And we’re really in for a treat today. We’re going to get some demonstration of the product. And we’re going to hear a little bit of the history. And hear some keys to success in business ownership. I’m grateful, Art, that you’d accommodate us. And wow, what a setting for this.
Art Wing:
Well, thanks for coming by. And we go way back a long time. And it’s good to see you again.
Craig Willett:
It’s great to see you. It’s great to be with you. This is quite the studio. One of the keys that I have always noticed for a Little Giant Ladder’s success has been the ability to demonstrate product. And you’re taking it to the next level with these sound studios.
Art Wing:
Yeah, we actually started a tad before COVID. And COVID, basically entered a Zoom world, which we didn’t like the fact that 90% of Zoom is people looking up somebody’s nose on a desktop. So, we try to make it more of an event. So, ours is completely interactive. Everyone’s mic’d up, we have a software engine that drives it. But we have done no traveling since the entire thing and then just paid cash for all of the studios out of the proceeds.
Craig Willett:
That’s pretty cool. I remember the story of the startup of this business. Your dad innovated the product. But he would take it to county fairs. And he would travel and throw it in the back of a station wagon. I think you went with him on a few of those. What was that like for demonstrating?
Art Wing:
Well, I did it as a job for a long time. And I managed that group. So, the National Hardware Show used to be in Chicago at McCormick Place. And so, we didn’t have the money to actually ship our products. We didn’t have the money to fly. So, I remember we had a Pinto station wagon, and we loaded it up with ladders. And basically, we’d always get a 10 by 10 booth. And so, that would be our display.
And then, the object would be while you’re demonstrating it, take orders from exhibitors. So, when you walked out, you could just walk out with an empty booth and go home kind of a thing. It was just a cool thing for me because I think I was 15 or 16. No, I was probably 14 or 15. Anyway, there was a go-kart company there and he actually ended up trading a ladder for a go-kart. So, we brought back a little go-kart in the back of the empty station wagon.
Craig Willett:
That was your first paycheck, the go-kart?
Art Wing:
Yeah. Yeah. I started when I was 12.
Craig Willett:
Really?
Art Wing:
So, I started with my father. We began as an importer, and then the Deutsche Mark devalued like crazy. And so, it caused us to become a manufacturer. And he just basically threw chop saws and stuff from Sears and different places. Got some used equipment, and we created it. And I helped him get that shop floor off the ground. And we started from there. But yeah, initially, what happened is he brought a sample over from Europe because we were an importer. And he went to maybe 50, 60 friends, showed it to them.
They said, “Absolutely, I’ll take one,” kind of a thing. And what ended up happening, he brought his first container in and went back to the same 50, 60 people and they’re like, “Oh, that’d be for a painter. That’s too much money for me.” So, this is back when ladders were $29 and he’s trying to sell it for $200. And so, he sold none of those to any of those people. And so, he did venture on to try a trade show. And basically formulated a demonstration that would stop people, you go into a mass close, you would actually take orders. And—
Craig Willett:
So, demonstration really became a key. Because if you’re trying to say, “Hey, there’s a ladder,” and somebody else has a ladder for $29 and you want $200, what’s the difference?
Art Wing:
Yeah, the demonstration is actually so effective. Most people have been to a trade show before or if it’s a home show, you’re just making a beeline. So, even when it was dead, we would just start demonstrating to nobody. And then, they would just stop and then you just launch into what you’re looking at and it would be your demonstration. So, they wouldn’t leave after that. And then typically, there’d be 40, 50 people out there. And you’d write up two or three of them. And then, there’d be stragglers from the last one.
And you’d basically start off with, “I know you didn’t get to see the whole thing. So, let me show it to you.” And you just start from fresh and new people were coming up. And it would go crazy. So, we ended up doing specialty shows. I mean, we did like funeral director shows, which seems weird but most funeral directors actually own their own property and take care of their own property. And they have good steady cash flow.
Craig Willett:
You can’t avoid death and taxes.
Art Wing:
They love good products. We did those type of trade shows, we did industry trade shows, and we did just about every home show and county fair you can think of. At one point, we were doing upwards of 500 shows a year.
Craig Willett:
So, is it true, the rumor I’ve always heard that because your mom’s from Switzerland—
Art Wing:
They have that right.
Craig Willett:
She could yodel. And your dad could yodel a little bit too—
Art Wing:
No, my mom was actually from Germany.
Craig Willett:
Oh, Germany. Okay.
Art Wing:
My dad is a strange perfectionist. So, before he passed when they would go back to Germany, most people would say, “So, your wife’s from America, and you’re from Germany.” So, when he took something up, he would perfect it. His German was flawless. And on one of their trips, and we did have a home in Switzerland, he really dug yodeling. And he took it up and became super proficient at it and just really random stuff.
Craig Willett:
But he could yodel at a show and get people to—
Art Wing:
Oh, yeah. If times got bad enough, he could do that. But I remember when I was about 10, we lived in Europe for a couple years. And that’s where he ran across the ladder idea. And so, I was in middle school. And one of the first things he did was he enrolled our entire family in the talent show. So, we’re up there with these—
Craig Willett:
Sounds like the Sound of Music.
Art Wing:
We’re up there with like these nerdy European clothes on with all these kids from Utah and the USA. We didn’t know, started singing and doing—it was just goofy. I’m still going through counseling for that.
Craig Willett:
Trying to recover.
Art Wing:
But no, yeah, he was really a visionary guy and grew it. What happened when we began manufacturing was, we actually still bought a couple of key components. So, the original German painting contractor guy that we got the license from would know how many we’re producing. And we just amped up the royalty so he was making exactly the same as selling it to us, but we actually benefited by not shipping air, and it worked out really well. So yeah, it was good. And it dovetailed into innovation.
So, that company is still around. They’re in Germany. And we actually have more market share in Germany than they do. And the weird thing is it’s being run by an accountant. And so, to this day, they still have exactly the same literature and the same ladder. They’ve never improved on it once. They do have a website. And as soon as the web takes off, they’re going to launch it. They’re like in the stone ages. So, we continue patenting and improving and staying relevant. And yeah, it’s always been part of our DNA.
Craig Willett:
And I think that’s part of it to be able to demonstrate it really makes the sale. Now, your family did at one point sell the business. This is back in the ’80s, wasn’t it?
Art Wing:
Right.
Craig Willett:
Sold the business. Your dad had built it up to a certain level.
Art Wing:
Yeah, if I can remember most everything my dad did, they were all great decisions. But in the mid-80s, he brought on two partners that said, “We’re going to take some capital and invest with you.” And I think it hit him later at a board meeting that two guys can out vote one. So, they took their capital back out. And they said, “We want to go and sell it to a VC company.” Anyway, long story short, the VC company ended up being a Ponzi scheme. And they went down taking—they owe General Electric a credit like $160 million.
And my dad actually had a clause in there that they could not cash or redeem any of his stocks for a year. So, he basically just watched it go broke. The sheriff came, locked it up. So, I think towards the end of ’85, we’d set ourselves up a dealer. And we’ve just bought all of the inventory, and we moved to another building. And then on March 6 of ’86, we bought the assets at the sheriff’s, so. And then, we started again from scratch.
Craig Willett:
What was that like? What was your role at that point in time?
Art Wing:
On that particular time, I was actually in the customer service department. I mean, I set up the shop with my dad, I’ve run general labor, I’ve done our quality control program, been the Customer Service VP of Sales, President, CEO, Chairman. I’ve sourced all of our international partners. I’ve sourced all of our international factories. And so—
Craig Willett:
So, you’ve had a key role in it. What was it like working for your father? I mean, sometimes, family-owned businesses take on a negative connotation. People think, “Well, they can’t be successful.” But I’m sitting here today and this really says, “No, they can be.” But what was it like, and how was that an advantage and maybe a disadvantage at times?
Art Wing:
And there was an advantage in that he had a really good sense for business. And my mom actually ran the books, and she’s wired like Doug, very conservative. And so, that was a good basis to grow on. But I will tell you that some of the biggest arguments we ever had were like, “We have a perfectly good telex machine. What is a fax machine? We don’t need that.” It was a good week of strife. And I finally just went out and bought it, and then they paid me back later. Same thing with PCs. We had an IBM 360 in a room with an air conditioner. He’s like, “Why does everybody need one on their desk?” And so, I went out and bought PCs for everyone. So, we had some disagreements on that. We’ve had—
Craig Willett:
But you were as visionary as he was then, to be able to keep it moving with the technology.
Art Wing:
So yeah, I’ve done more of moving forward, like when the internet was just taking off, I mean, I bought ladders.com for $12. I think the last thing we turned down was—
Craig Willett:
And if you don’t know, that’s the web address for this company.
Art Wing:
Right. And I had to just turn down $1.2 million, because the employment agency—a company wants to buy it, but we’re not selling it. So, I did that. And plus, at the same time, I bought every other reverse domain you could buy. So right now, we have about 100 domains that are all pointed in different directions. We’re the number one unaided brand awareness as far as ladders. We’re the number one ladder search on Google. And the number one ladder at Amazon. And so, yeah, I did a lot of that stuff. We wrote an infomercial. It was wildly successful.
Craig Willett:
Yeah, let’s talk about that. So, you go back, you buy the business back in the ’80s—’85, 86—and you’re starting from scratch. So, you had really one product in a couple different sizes, right? One ladder that might look like—something like the one back here.
Art Wing:
So, most people know what it is. And it was a one trick pony. We actually had it in four sizes, same grade. That’s all we had. And we had an engineer let some IP run out on it. So, I think it was the fall or spring of 2000. There was a full-page ad on the back of USA Today that basically had an exact knockoff of our product at half the price. And we still had a year left on our patents. But if you know the way a patent litigation works, you’re only entitled to the damages.
Art Wing:
So, by the time I would have got my day in court, they would have been expired anyway. So, there really was no point. So, we wrote an infomercial. Because we had learned from the shows that if you move up the ladder, you move ladders.
Craig Willett:
Right. If you’re able to demonstrate, you’re able to get attention.
Art Wing:
So, we just carried that over.
Craig Willett:
Yeah, but that was a big leap of faith in infomercials, they’re not very successful.
Art Wing:
They’re not very successful. An infomercial typically will run 18 months then it’s fried and then you’ll be in the Closeout or the “As Seen On TV” bin at Walmart or somewhere like that. The weird thing about this one is my dad’s passion really came across on it. And we had some good talent as well. He was the most difficult talent I worked with and the most expensive because I had to pay him a royalty.
Craig Willett:
Your dad?
Art Wing:
Yeah. And I had to continue paying my royalty to my mom.
Craig Willett:
I hope on some of the B-roll we’re able to get some of your dad because his demonstrations top anybody’s.
Art Wing:
Oh yeah, we could get the whole show and you could take snippets of it, yeah. But long story short, we just entered our 18th year and January was probably higher than any infomercial that’s in the space right now. But when we did it, yes, you’ve heard of “betting the farm.” He had a little farm down in Springville. And he literally mortgaged it and gave me a million dollars. So, he bet the farm and out of that, I had to write it, produce it, distribute it and hire all the talent. And it was and continues to be a great success, even to the point where—
Craig Willett:
So, you still use some of that in your infomercials?
Art Wing:
It’s still running. So last year, I made a little bit on it. I’m not looking to get greedy but last year, we ran 12,000 hours of TV and made a couple $100,000 on it. So, it’s just free advertising.
Craig Willett:
Right. So, it drives people to the retail locations.
Art Wing:
And the brand as well. So, there’s some knockoffs out there, they’re inferior, they’re clunky, there’s no innovation in them. And you can stand in front of those guys and they will say it’s a Little Giant because what it is like—you don’t call them facial tissues, it’s a Kleenex. Little Giant is the category on a telescoping articulating ladder.
Craig Willett:
So, how do you do that? How do you create that brand? Was that brand created before the infomercial or did the infomercial help brand the company and the product?
Art Wing:
Yeah. We had laid the groundwork. So, there was a lot of pent-up demand. Also have an infomercial for every 10 people that view it and buy—I mean, every 10 people that view it, only one will buy. So, 10 are going away, saying, “I need to get my hands on, and I want to see it.” And so, there’s natural curiosity. And actually, it was compelling enough that they wouldn’t buy another ladder until they could afford—they actually save up for a Little Giant.
And we’re still selling at the same price point. And our average order sale is at $600 right now on this loaded TV ladder, which is just unheard of. We wrote the infomercial really well. What happens when you typically write an infomercial is you drive to a call center. So, we were driving it to 15,000 seats, and that’s the call volume. We were buying a million dollars. We bought a million dollars’ worth of media a week for two years straight. And made money doing it.
Craig Willett:
That’s betting the farm.
Art Wing:
Yeah. But we wrote the show well enough that most every infomercial, the call time for the guy to walk through and explain the deal and finish the selling is between three and six minutes. And our average time from when they rang in to where they hung up and they’d paid was less than 90 seconds.
Craig Willett:
Are you kidding?
Art Wing:
Because they usually were calling to buy, they weren’t calling to be sold.
Craig Willett:
So, I’m going to call Hal now the king of demonstration. So, that was probably the smartest move is to hire him. He was your costliest move, but he was probably the best demonstrator.
Art Wing:
He had the passion. And you can show some of the clips. I mean, he had the ability to—super sincere, great sense of humor. And he’d just look right into the camera and look into your soul. And we get—
Craig Willett:
But he was trying to save his life too. He had bet the farm and this was a really critical moment for him.
Art Wing:
But after the first one, he was pretty much set for life. And then, there was three more on top of that. So, we’ve continued to refresh with innovation.
Craig Willett:
Let’s talk about branding. I’m looking at the carpet here. I’m looking at the Little Giant name on the ladders. It’s in orange. And then, your first ladder, some of the key component parts are in orange. What’s the significance of orange?
Art Wing:
You know what, the original one from Europe had orange plastic parts on it. And we were buying the plastic parts. And so, we used that. It turned out that nobody was using any ladder company to brand or even put their name on it. And so, that established us. You notice a lot of green stuff. So, we’ve invented a proprietary fiberglass system. It’s 25% lighter than anybody else’s, and 25% stronger, and actually getting the patent on the color green. So, it separates us again—
Craig Willett:
Which is unique and innovative in and of itself.
Art Wing:
Yeah, I think the last good color patent was Coca-Cola. You have Coca-Cola red. But they don’t do—
Craig Willett:
So, we got Little Giant green now?
Art Wing:
Right. So, if you see one on a Century Link truck or a Comcast or Verizon or anyone anywhere, it’s a Little Giant.
Craig Willett:
That’s pretty cool. So, you can identify your product from a mile away, which is great branding.
Art Wing:
Yeah. So yeah, we have always tried to stay loyal to—
Craig Willett:
Who’s the king of branding here, though? If your dad can demonstrate, who in the company really came up with keeping the name, keeping the orange? I mean, where did this sense of brand awareness come from?
Art Wing:
So, we have great people, and we have a great team. But I would say I’ve always been passionate about it and have the long view. So, I mean, I’m doing an infomercial, and Costco is saying, “We want it in our stores yesterday,” and it was really ticking off the buyer because I just said, “Not now. Why would I sell you and have you undercut me? I have my TV network. I need to innovate a ladder.”
And so, for three years, he chased me around the globe trying to buy it. And the weird thing about the principle of scarcity, a buyer—they’re not used to being told no, they’re used to having people sell their souls.
Craig Willett:
Right. Right.
Art Wing:
They wanted the worst. So, they just kept coming and coming and coming. And so, eventually, we have enough innovation. We do a really good job with what’s called “channel chatter.” So, where most people have one ladder, if you put it in Costco or Amazon, and then Home Depot, if one of those accounts gets a cold, they all sneeze and they all call you and want a discount, but we configure each ladder unique for every channel. And so, they can do whatever they want.
And when someone calls, which they don’t, you just say, “Well, that’s not your ladder, so you don’t need to worry about it.” So, I’ve always had the long view on that, the brand. We’ve had offers of, “Hey, we’ll buy a couple million pieces, but you’ve got to drop the price 40% and whatnot.” And we don’t join the race to the bottom on pricing. So, we—
Craig Willett:
So, you’ve never done that? You’ve stood alone and here’s what it does, and here’s why it’s worth it.
Art Wing:
Yeah. And if you add enough value—our brand equity, it commands a 13% premium just on the name. And then, you start throwing innovation on it and then it just really goes nuts, so.
Craig Willett:
So, on your original ladder, I’m trying to remember on that infomercial, how many different uses can you get out of that ladder? I’m giving you a quiz here.
Art Wing:
So, a slogan I came up with is “Buy One and Get 33 Free,” because it did 34 things.
Craig Willett:
So, this ladder, can we just come over here for a minute? So, this ladder in its infancy days, because I see other innovations from the original, did 33 things, 34 things.
Art Wing:
It had different locks. So, this is a rock lock, that’s a different invention. This one, you can see back there, that’s actually the same ladder. And it has rapid locks. So, it locks differently. So, we can give it to different customers. And this is actually the same ladder, and it’s fiberglass for electricians. And so, we have it in probably 20 or 30 different versions.
Craig Willett:
And so, when someone’s buying a ladder, they can’t compare it to anything else. There’s nothing else, unless somebody’s copied your product.
Art Wing:
Yeah. And they can buy cheap ones and throw them away and hope they don’t fall off kind of a thing. And we’re happy to let him do that. So, yeah.
Craig Willett:
Do you mind showing us some of the things that you’ve been able to do with it—how you’ve innovated and changed it?
Art Wing:
Some of the key things that we’ve done that have caused a tipping point is one of them was this extension ladder business. So, we got invited to a telecom conference, and we were flattered. And we went and they basically said, “We want lighter ladders, because we’re having $75,000 per occurrence in injuries, which I thought it was falling and stuff like that. But it was actually strains and sprains when they pull them off the ladder racks. Because—
Craig Willett:
Because of the weight.
Art Wing:
These are 80, 90 pounds. And this one actually weighs 62 pounds. And so, it helps solve that problem. And it also helped them make their workforce more diverse because they could hire more women. Because there’s no way that most women can lift a 90-pound ladder. So, we came up with this. It’s actually our own—it’s lighter. We’ve done some stuff. We’ve double pulleyed it on the side, so it’s easier to pull. Most of them have them going up the middle. We have our own locking system.
Craig Willett:
Yes. So, show us how that works, if you don’t mind.
Art Wing:
Yeah. It just basically goes up. You go past the rung, and it just locks down automatically. We also have a level on the side. So, you’re supposed to be at a 75-and-a-half-degree angle. If you’re too steep, it’ll come back on you. If you’re too shallow, it’ll kick out. So, you just set it there and you’re 75 and a half. And then, we have another one that’s here on the bottom. So, the number one reason for ladder accidents is overreaching.
And so, if you’re off on a 24-foot ladder, I think if you’re off an inch and a half at the bottom, you’re off 18 inches of the top. So, if you didn’t think about going that way, you’re going to go. So, the other thing we didn’t like is if you notice on step ladders, all step ladders have to have an inch of flair for every foot they go up kind of a thing. But on an extension ladder, you can go up to 40 feet, and they can be perfectly straight. And we didn’t think that was right. So, we invented what was called a SumoStance. And this actually adds 600% stability.
Craig Willett:
600%?
Art Wing:
I think we’ve gone to the top. It does do more.
Craig Willett:
So, you went to this—
Art Wing:
So yeah, you can actually go to the top and hang 150 pounds off the side, and it will not move. But the other thing that is important is—
Craig Willett:
So you don’t mind if I climb up here and test—
Art Wing:
Hang on a second. Let’s make sure it’s leveled because you do also have the ability to level it.
Craig Willett:
From side to side?
Art Wing:
Yeah.
Craig Willett:
So, if I’m on uneven ground, I’ll just—
Art Wing:
So, this is a little low here. So, we’ll make it a level there. So, you can have it level or whatnot. And we’re pretty close to there. I’m going the wrong way.
Craig Willett:
Keep going. There we go. We’re getting there.
Art Wing:
Yeah, you can climb that.
Craig Willett:
All right. So, I can go up and check this out. Now, there’s a click when I stand on it, what’s that?
Art Wing:
Well, what that is, it’s called a Ground Cue.
Craig Willett:
So, I can get up here, and I can reach out here and not worry about it sliding.
Art Wing:
It’s super stable.
Craig Willett:
Cool.
Art Wing:
So, the ground cue, as you come down, everyone’s missed the stair in their house going either up or down and they fall on their face. The ground cue basically just lets you know that you’re on the bottom step and it’s safe to get off. We had one customer that, I think a third of their accidents were people climbing here and here, and they just get a head injury from falling backwards.
Craig Willett:
Really?
Art Wing:
So yeah, that’s the ground cue. Have cage ladders—
Craig Willett:
Let’s just stop for this one for just a second. So, you went to the teleconference or the telephone industry.
Art Wing:
Right. So, we went to that meeting and we were flattered that we were invited. And they said, “We want something.” And we said fine. And I think 35 days later, they had a prototype. And we got all the business. We took it from everyone. And it wasn’t until after that that we found out that all ladder manufacturers were invited. But the two biggest ones had stopped coming because they would come every year and say, “Yeah, we’ll get you something,” and they would never do anything.
Craig Willett:
So, you followed through. That’s another key, follow through.
Art Wing:
Yeah, you’ve got to—
Craig Willett:
And you captured the whole telecom industry?
Art Wing:
We’re on our way to getting the lion’s share of it. So yeah. And the nice thing, too, is it changed our whole revenue position too as well. Because this is the ladder that you have at your home. I mean, it’s 300-pound rated, it’s commercial, it’s strong enough that we like to say that when you pass away, your kids are going to fight about it over the will. But—
Craig Willett:
They all borrow it. They all love it, so.
Art Wing:
From a revenue stream, I only got you once. This has two things. First of all, all of those crews only work with a safety inspector. So, they’re always looking over their shoulder and being trained and whatnot. And depending on the company, every four to six years, they take everything out of service, destroy it and replace it. And they go upwards of $1,000 a ladder, and they’ll pay the difference. Whereas the competitors are $400, or $300, or something like that.
Craig Willett:
So, this is your industrial innovation that really took you really deep into industries that you hadn’t penetrated before.
Art Wing:
Yeah, we did a lot of stuff like on the normal ones. The ones they were using had a swage that came through the rung. And we have a robotics—and I have some B-roll on that for you too. But we actually made it to where you could actually take a rung out if it got damaged and replace it in the field, and not have to replace the whole ladder. So, there’s companies that do that.
Craig Willett:
What kind of innovations have you done at home for the DIY people?
Art Wing:
So lately, the coolest thing is what’s called the King Kombo. And this is the 2.0 version. You and I looked at one a minute ago. Remember, I had to push both those things?
Craig Willett:
Yeah.
Art Wing:
Well, it’s been 60 days. So now, it’s just one hand.
Craig Willett:
You don’t let one of your innovations last longer than 60 days?
Art Wing:
Well, you can do it too fast, and you’ll lose money. But I like to keep it in a drawer like Intel keeps their next 15 chips in the drawer until they’re ready. So, up until a while ago, I mean, a lot of people would just lean and extend a stepladder against the wall. And OSHA says you can’t do that. Because what happens is you can be pivoting on that foot and it’s not safe.
We designed a way that it locks in there. And this is a wall pad and you can actually use it straight up against the wall just like that. And then, it has what’s called, I don’t even know what it’s called now. It’s a—
Craig Willett:
A corner.
Art Wing:
Yeah. What is that called? You’ve been here long enough?
Speaker 4:
Rotating wall pad.
Art Wing:
A wall pad, okay, thank you.
Craig Willett:
Rotating wall pad.
Art Wing:
So, what this has is it has a V on it. So, that’s ideal for, and you’ll be able to see this in the footage from the shooting straight down, you can get right on a corner, you can get up flat on a wall.
Craig Willett:
So, I can get there?
Art Wing:
Yeah. You can shake for all your worth.
Craig Willett:
I can come up here. And I can take care of any project—
Art Wing:
You’re super close to your work. It’ll also do an inside corner the same way. So, it’s super innovative. Little Giant have been known to be $400 pieces. And we are now an exclusive partner for Lowe’s. It’s in all of their stores. And so, it’s just flying off the shelf. This is priced typically between $120 and $180, depending on whether you get an aluminum or fiberglass. And then, you put this away—
Craig Willett:
And that allows you to reach a lot more of a market than you could before.
Art Wing:
Yeah. There’s no advertising with it and it just flies off the shelf. So, you can activate that again with one hand. And you don’t have to stop there, you can just keep going all the way up. And you have an extension ladder built in as well. And we have different sizes of it. The nice thing is you also have the Quad Pod at the top so I can now in an extension ladder, position, do this inside, outside, inside or straight on. And it has places for you to—
Craig Willett:
Get the other ladder out of the way.
Art Wing:
To put the tools there for you.
Craig Willett:
Wow. That’s pretty cool.
Art Wing:
So, that’s the one that’s been selling just like crazy.
Craig Willett:
So, this is one that I don’t need. I can walk into the store and buy it. But if I want to learn how to use it, I can just scan the video on the side?
Art Wing:
We’re kind of the gold standard for assets. So, we have thousands of hours of videography on all of our products. But yes, on all of our products, we’ll have a—
Craig Willett:
That’s right here.
Art Wing:
Oh, you’ll have a barcode and basically, if you point your smartphone at that, it’ll queue up the instructional video on what it’ll do as far as features, and what you need to do to be safe, so.
Craig Willett:
So, it’ll give you a safety training. But also show you everything you can do with it.
Art Wing:
And it’s super light, but super strong.
Craig Willett:
So, a ladder is not a ladder is not a ladder when it comes to Little Giant. Okay.
Art Wing:
And then, we’ve done simple things too. You’ll notice that most step ladders have a rung right here. And the only purpose for that rung is to hold the sticker that says, do not climb on this rung. So, it’s actually the gateway to standing on here, which you’re not supposed to do. So, we took them out on all of our step ladders, and we actually got the patent on that as well.
Craig Willett:
So, you really end up with a standing platform.
Art Wing:
And you’re in an enclosed space. Very comfortable, very nice.
Craig Willett:
Wow. That’s pretty neat.
Art Wing:
We make the world’s tallest step ladder. Yeah, we’re branching out into a lot of different things, so.
Craig Willett:
So, why all the innovation? I mean, you did the infomercial, and you lived a pretty good life from that, it seems like. And you still run it today. So, what is it that comes back to you? Why the fiberglass? Why the innovations in the industrial market? What’s your concern?
Art Wing:
So, even when we were selling a one trick pony, we always pride ourselves on doing things differently than everyone else. I like to play apples and oranges. I don’t want to play the apple game. Because when you start talking tonnage and commodity, it’s just a race to the bottom. So, the innovation allows you to obviously over exceed your customers’ expectations. It allows you to create margins and price points that are sustainable for longer, and it gives you the marquee. I mean, I don’t know how many Fortune 100 and 500, 1000 companies that we’re at the top of their speed dial—from Exxon and a bunch of other ones. If they have a ladder problem, they call us and they say, “We have this, can you solve it.” And we’ll solve it and they’ll have a prototype in two weeks, and then we’ll build it for them.
Craig Willett:
I laughed, because when I followed up with you to make sure we’re okay to come, to this you said, “Remember, Craig, you get what you pay for.” And I’m not paying Art at all for this wonderful studio. And he’s letting us use it free today. But anyway, you really say that they get what they pay for. Really. You’re really about preserving margins and that. And I’m sure that’s led to the sustainability of your company.
Art Wing:
Yeah, the sweet spot that we’re in is that we have really super innovative products. And we’re now at a point where they’re priced as—it’s 10, 12 bucks next to the cheap thing next to it. So, it’s innovative. It’s like a no-brainer. I think this year on Black Friday, and this shouldn’t happen—it was Lowe’s with no advertising—but we were the number three and the number seven most bought items in the store.
Craig Willett:
Are you kidding?
Art Wing:
So, it just rocked. They’d emptied everything and now, we’re dealing with port congestion, shopping and everything else. But yeah, it’s really taking off.
Craig Willett:
So great. What are some of the greatest lessons now that you learned from your father? I know it’s got to be hard to work for family in a business. And it sounds like he did well, because you’re able to stand up and still continue with the vision you had, at the same time, marrying to his vision. But what did you learn from him? What did you take? Because he’s now passed away, but what is his legacy in your life that helped you be successful as the CEO and chairman of this company?
Art Wing:
Well, one of the things he used to tell our salespeople all the time is, “You can tell the customer anything you want as long as it’s the truth.” And it makes a big difference. I’ve always strived—and he lived this rule as well—is under promise and over deliver. I mentor quite a few new business people. And it’s frustrating for me because there is no short silver bullet for creating a business. So, there’s no shortcut to success. So, these people that I’m mentoring, they’re 20 somethings and their parents have been successful.
And they look at me and said, “You’re successful.” I’m like, “Yeah, I’m into it 40 years.” “And your parents were successful, how long do they do it?” “Oh, they did it 35 years.” And their parents were in it. So, unless you’re creating Snapchat or your last name’s Zuckerberg, there really are no unicorns out there. You have to be committed to have a long view, begin with the end in mind, and just stay the course and just stay to your values.
I mean, if you let the market—that basically becomes the tail wagging the dog and you’re just running the business according to their dictates and pretty soon you’ve got all kinds of chaos. So, you have to stick to your values. This is not something I necessarily learned from my father. But I think the number one thing that businesses fail and do a bad job at is they don’t say no to enough deals. Because you’re in the business, you want to grow—a deal’s a deal, right? But there are bad deals, you should pass on the bad deals, and then figure out how to come back and make it a good deal. Because—
Craig Willett:
But that’s a scary area. I want to spend a few minutes on this. Why were you able to say no? Because that’s scary, you have to come back and say, “Hey, we could have had this big order. But we said no.” And how do you explain that?
Art Wing:
I don’t know why. That’s the way I’ve always been wired. Because I’m looking down the road 10 years, and if I have something that’s a $200 price point, and somebody wants to buy a million of them at $99, yeah, I’ll sell a million of them. But then, I’m stuck with a product that’s $99 as a thin margin and the volume just dissipates, then you have no business. So, I’m taking the long view. And even when I was running the salesforce and stuff like that, people would come back and say, “I got an order for three truckloads to this new customer.”
And I said, “Well, I want you to call them back and send them a half a truckload.” And they’re a little perplexed because that’s counterintuitive to selling. What I wanted them to do is burn through that half a truckload and then get greedy and say, “Okay, we want a truckload,” and then burn through that. The worst thing you can do is deliver three truckloads and then have it sit on your dock and just be saying, “These things suck because—”
Craig Willett:
Right. Because they can’t sell them fast enough.
Art Wing:
Yeah. So, I try and get the turns right, get the mojo right. We’ve done that with our international—we’re in, I think, 28 countries. And we do the same thing on the first order. We’ll sell them more. Less than they need is typically pre-sold before it hits their shore. And then, the greed kicks in.
And then when they do start ordering large orders—they’ll order two truckloads, and they’re onboard and they’re fans—what happens is since they’re having to walk by it every day in the warehouse, it now becomes a priority of like, “Let’s get this stuff moved.” And then, they’ll blow through it. And then, they do the math on it. And then greed kicks in. And they’re like, “Okay, let’s order four containers.”
Craig Willett:
Okay. So, it’s the scarcity factor too.
Art Wing:
Yeah.
Craig Willett:
I like how you’ve tried to preserve the margin, because so often, it’s easy to get in business and try to do price per pound. You can walk into one store and buy ground beef at this price per pound. And you can go down the street and get it for half that. But what’s the difference? It’s the quality of the beef. And so, how do you know that? And if you don’t price distinguish yourself, you can’t make that differential.
And I think that’s the beauty of being able to demonstrate and then be able to preserve the price. It wasn’t out of greed, that’s allowed you to innovate, because it’s costly to innovate. I don’t know if you’re willing to say what percentage of your budget you spend on R&D and innovation, but—
Art Wing:
It’s upwards of 20%.
Craig Willett:
Wow.
Art Wing:
We spend a lot on advertising. And we spend a lot on R&D. I think we have eight engineers in house and our marketing stats—probably around 20-25 people, which we do all kinds of social platforms and everything else. But yeah, the other thing too that is a byproduct that’s helped us stay disciplined and why I had the long view is everything that we sell is also very litigious. And so, you don’t want to be selling something if—in those are not a lot of $9.99 cent step stools in here. We don’t get into that space.
That stepstool business likes a 70% margin. So, if you take a $9, $10 item, and you’re now down to $3, and he’s going to toss you a buck 50 to make. So, you made a buck 50 on it. And the first loss that you have with $150,000 SIR has wiped out a lot of step stools. So, it’s good business, it’s good practice, but it’s also, we get sued probably 90% less than anybody in the industry. And—
Craig Willett:
And has it always been that way? I mean, before you started some of these safety innovations?
Art Wing:
Yeah. Because even the first one was a 300-pound raise ladder that you had. So, it’s commercial grade. So, we don’t get the suits they have. All of our suits are typically nuisance lawsuits. Some places around the world, they feel like they won the lottery if they fall off. But we’ve never lost a lawsuit either. So, we get much, much better insurance rates and premiums than anybody else.
Craig Willett:
Wow. That’s great. So now, you learned a lot from your dad. You’ve also run a business where you’ve had siblings in the business too. What can you pass along as secrets to getting along with family but also being able to achieve the objectives of the business and not get caught up in the family business at work?
Art Wing:
Yeah, it is really difficult because when family members are here or can come, there always seems to be this little tiny bit of entitlement and it’s fun to throw the name around. I know that in my—
Craig Willett:
And I think your dad was against that. I think he made you do probably more work for less than other people and do jobs—
Art Wing:
I worked for less and I had to work harder. And that debunked the myth. I never called him Dad once at work ever. I called him Hal. Because I wanted to be like, “Hey, Dad, will you do this for me?” It just sounds so—nepotism. But no, I think if you were going to do it, first of all, I’d just say there’s an easier way to do business than that. It sounds like it’s a pipe dream. But there are a lot of conflicts that goes with you.
And then, it doesn’t leave you all the time, because it’s always top of mind. But probably the best way to manage it is to give them enough space, and then have KPI or key performance indicators to where they have to hit certain marks. And most all of our people have an earnout based on their productivity. So, if they win, we win, we share with them.
Craig Willett:
Okay. So, that avoids having to treat people with favorites based on the name.
Art Wing:
Right. If you can’t sell, you’re not going to make anything. Or if you can’t perform in your space, you’re not going to get the rewards.
Craig Willett:
So, I know your dad at one point had sold this—I don’t know, it’s because the partners were wanting to sell. And then, you bought it back. And through a lot of hard work, you lived through that period of time. What was your vision? And how did you adopt a vision for the next 20, 30 years as you grew this business?
Art Wing:
Really, it’s just one day at a time and just looking at the opportunities and just not living in the present. So, just always shooting. It’s a dangerous lifestyle, because I live it that way myself. And I probably should go to counseling, because I’ve always lived for when I get this, I’ll be happy. And I said something else. And I said—that’s just how I’m wired. So, I’m not the most content business person. I’m learning how to be mellow.
But I’ve always had that drive to whatever status quo is not enough. I had a UK partner yesterday said that one of their customers said, “You have the right to push every open door in our factory and our stores.” And so, I’ve never heard that term before. But yeah, my dad used to say if you aim for the stars and you miss, you’re probably still going to hit the moon. But that’s better than not having a goal at all.
Craig Willett:
I think that’s great. So, what about going into the next generation? I mean, you made a good transition from the first generation to the second generation. I know recently, you had a transaction on the business. Why did you decide not to pass it to a third generation?
Art Wing:
Well, I did a lot of work on it. I had to rebuild the business from when my dad had it because he basically had a business that didn’t have a lot of EBITDA in it because he lived a different lifestyle. And when he passed, we never took any dividends. We didn’t take anything. We just poured everything back in it so we could start building EBITDA. But we’ve just completely changed and just kept pushing. But there’s a big element of just measuring things.
He used to also say that which is measured is improved. So, when we went through this transaction, it’s pretty arduous. I mean, it was a killer. Three years and the very last two months was a big deal to find the right partner, find the right agreement. But the thing that we spent zero time on them saying, “Can you beef up your finances?” Because we measure every vertical on every skew on every product on every day on every month.
And so, we know exactly where we’re at. So, it was easy for them. The reason I moved away and didn’t embrace the third generation—one of the Wall Street banks, their number is third-generation businesses are failing about 97% of the time.
Craig Willett:
Wow, that’s huge.
Art Wing:
It is huge and it’s something you have to deal with. And it’s not really the third generation’s fault. I mean, I can tell you to this day, I’ve not had a peanut butter sandwich since 1980 because we didn’t have any money and we ate peanut butter sandwiches five days a week. So, I’ve never had another peanut butter sandwiches. But you raise a family and you vacation in Hawaii, you live in nicer homes because it’s changed. And that’s their starting point.
So, a lot of times with a third generation, when they come into the business, now, “Where’s my office,” no, “Where’s my corner office?” So, the 3% that make it, I think, are very, very good companies and strong, but it’s just not something I wanted to do. Our CEO has a small ownership position. My sister and brother had an ownership position. And I just started, again, beginning with the end in mind, how do you want to wind it?
So, there had to be a crystallization event. And we found the right partners. It’s great. They love the legacy. They’re actually from the Midwest. They’re not New York slick guys. They’re just really great guys. They love the legacy of the company. And it’s been a really good partner. And they’re actually looking at doing bigger and better things than we were doing before. And—
Craig Willett:
It’s nice to be part of that, because I think you stayed in to keep innovating and keep growing the business.
Art Wing:
I’ll be in three to five years. One of the things that I’m most proud of about this company, which is when you consider we’ve had times where we’ve grown 100%, and we’ve had times where we’ve grown 600%. We’ve never taken any outside capital; it’s all been financed out of cash flow.
Craig Willett:
Wow, that’s amazing.
Art Wing:
So, it was a tightrope.
Craig Willett:
There’s a big lesson in there. And it’s a tightrope at times—
Art Wing:
Most people can’t tell the difference between cash flow and profit.
Craig Willett:
And I think that’s really key to understand.
Art Wing:
If you don’t have the means to operate—I’m in a little different financial position than I was 25 years ago. My dad used to say, “Working with a bank is like an umbrella. If it’s raining, they’re not going to sell you one. If you don’t need one and it’s sunny, they’re going to hand you umbrellas all day long.” So, I have more people offer me stuff now. And I’m like, “I don’t need it.” So, you have to make sure that you don’t run out of cash.
You anticipate and you understand growing too slow will kill you because inflation will eat it up. And growing too fast will gobble your cash, and it will kill you just the same as well. So, there has to be a balance.
Craig Willett:
There’s a balance in there. I think that’s really wise advice. Wasn’t it hard to sell it? This is the third generation, I mean, it’s your baby. So, how do you feel about doing that? And the reason I ask is not to delve into your personal life, but more for business owners who want to know, “What’s at the end of the day for me? I spent all my time, sacrificed for this business, how do I have an exit to this? When does this end? And how do I do it in a way that I can capitalize?”
Art Wing:
So, I always had some goals for getting EBITDA to a certain place, I had goals. Mainly, out of respect for my dad, I had a digit number that I had in mind that I thought if I did a transaction in that space. When my mother and father passed away, they left me a certain amount. And I had this personal goal that I wanted to leave each of my three children. So, I wanted to leave three times that much so I could pass that on. It was easier because when you make the decisions in advance, when they occur, they’re a lot easier to pull the trigger.
For example, the fee on the transaction, the bank that I did it with was 16 days away. And if I would have waited 16 days, I wouldn’t have had to pay them a fee. But I gave my word and they pulled it off in that time. And I didn’t negotiate with them and hold them ransom, I just embraced it, but I made up my mind I was going to do that. But letting it go at the right time, I just want to make sure the stewardship was in place, the values are there.
Everybody loves the brand. I mean, I still own 20% in different various forms and vehicles. And honestly, it’s almost less stress and more fun and I really don’t want to leave because we’re at yet another tipping point to where we’re going to grow. We’ve grown double digit for the last eight years. And—
Craig Willett:
And you said it was fun and less stress more now. What’s more fun about it?
Art Wing:
Just the day-to-day stuff doesn’t wear on you as much. I don’t know, I can’t really explain it. There’s just a feeling of peace. I know I’ve picked the right partners and we’ve got really, really great people. I got great marketing operations. Our CEO is top notch. And they’re all staying on board and we’ve groomed them to be part of this transition. And so, now, it’s really a good ride.
Craig Willett:
It just didn’t happen out of the blue. This happened over a period of time.
Art Wing:
Eight years ago, it started.
Craig Willett:
Eight years.
Art Wing:
And then, five years I started getting serious about it. And the last three years has been like a full-time job in my spare time. But—
Craig Willett:
I think that’s interesting. I think it’s important to recognize that as a business owner, that it’s not just going to happen. Someone’s not going to knock on your door. Although, I think people have knocked on your door through the years asking to buy the company. But to do it right, it takes the right time, the right partner, and it takes an intentional effort.
Art Wing:
Yeah. And you need to get some good financial advice. Because I’ve had friends over the years that when they clear a million, $2 million, and they came over to my house and use my color copier, so they can make a copy of the check. And they were out of money in nine months because a million or $2 million, if you put in T-Bills, it’s not spinning off anything. You’re actually taking a cut in pay. I started eight years ago doing my estate planning, and where it would go, and was set up enough to—I don’t need insurance or anything like that. But it was all orchestrated. So, I knew what the numbers have to be. But it’s definitely not something you want to guess on, you want to be really well prepared.
Craig Willett:
Right. So, what is the greatest thing at the end of your career—whether that’s in three to five years, if you retire from this—what’s your biggest takeaway from having run a company of this size? It’s an intimate company because as I watch you walk around in the halls here, call employees by name, they know you, you know them, it is like a family. What do you take from this? What is the mark on your life that this company has had?
Art Wing:
I think the thing I’m most proud of is that we were always the best, and we will always be the best. That and just the way we conduct ourselves, the way we carry our brand, the way we carry our promises. Most companies would guess we’re 10 to 15 times larger than they think we are.
Craig Willett:
That’s interesting.
Art Wing:
But to that point, if you take a ladder that started in 1972, and it’s just a one trick pony, that should be a nice niche business for a long time. And presently, we’re getting ready to pass the second largest ladder company in the world. And we will take that spot. No desire to be the biggest because you have to build a lot of junk that goes with it, and they can have it. But the fact that that actually happened, and just what we’ve built, and there’s just the respect that the industry has for us.
And I mean, I’ve had manufacturing arrangements on a handshake for 20 years. I’ve had agreements in Australia and UK on a handshake for 20 years. I mean, we started off with an annual contract and it would evergreen and you’d sign again. And after about the fifth year, they’re like, “Well, you don’t play any games, and we don’t play games, and we just run with no paperwork.”
Craig Willett:
That’s interesting. So, one other thing, and you can’t escape The Biz Sherpa Podcast without answering this question. It is a tough one. Probably the toughest one. What is your greatest failure that you experienced? And then, what did you learn from it?
Art Wing:
The greatest failure that we learned is when we launched the infomercial in 2002—a wild success. So, we had capital. And we decided we were going to innovate and branch out. And we designed a line of beautiful products. And then, we went to market with them. And nobody bought any of them. Because what we did was, we built stuff that was cool to us. And so, we basically—
Craig Willett:
So, you thought, “Hey, we came up with this cool ladder. So, we’re going to come up with something cooler.”
Art Wing:
So, we basically just took our lumps and took two years’ worth of R&D and all the money that went with it and just dumped it. And then, what we did is we went out into the field and said, “What are your pain points?” And everything that we do, everything that we innovate, everything that has any mojo on it all, we use the voice of the customer. It solves their problem. And then, they just resonate with it really well and it takes off.
Craig Willett:
And I think that’s probably one of the greatest lessons you can learn. I mean, to demonstrate—you can demonstrate and wow anybody, but if it doesn’t solve a problem, they’re not going to buy anyway. They may be wowed by the demonstration but if it solves a problem that they face on a regular basis, they’re going to buy your product. And I think that’s one of the hardest things of starting a business for business owners is they have a hard time trying to decide, “I can’t be all things to all people. But what can I be and where can I enter?” Because I think it’s the niche. And you mentioned it’s a niche market. You might be becoming the second largest ladder company, but you’re still a niche ladder company.
Art Wing:
We just have a lot of niches. And I know from your experience in real estate, you’ve done the same thing. You added value in it and you commanded more rent than the guy that’s sitting right next to you. So yeah, we’re able to do that. And to your point as far as pleasing everyone, my dad also used to say that, “There’s many paths to success, but one sure way to failure,” and that is trying to please everyone. So, just please the customers you’ve got, and it’ll grow.
Craig Willett:
I think that’s great. One of the things that I take away from today, and I appreciate your time. I mean, just to be sitting here in this studio is amazing to me. To know the history of this company and to see where you are today is a great combination to your vision, your family’s vision, and your commitment to product and safety and to the customers. And I think putting customers first is very important.
The other thing that I love about things that you talked about today is being able to have that vision and be able to carry it out. To be able to find people’s pain point and be able to solve that for them. Because that really brings satisfaction. Not just to them but I’m sure to you. When you have people call you up going, “Hey, this week, it saved this many lives, or it helped this many people,” that’s probably more rewarding than the dollars it flowed into the bank.
Art Wing:
Yeah. If you’re selling a commodity product, and you’re not adding any value, the only thing that moves the needle is price. And you will lose at that game. If you have something that’s innovative, or you can add some more features or safety or whatnot—even with your real estate things—price moves secondary. It sounds really small, but it’s a huge advantage when you can do that.
Craig Willett:
Right. And the other thing I liked about what you said is your dad said you can sell them anything. You can say anything you want, but you have to tell the truth. And you know what, I think the truth resonates. And that’s what I think really sells. When the customer can identify with your product and realize that you care about them, all of a sudden, price does become secondary. And I’m glad because it’s a philosophy I’ve had most of my life. But boy, you’ve done it in a big way here. And I really appreciate that. Art, thanks for taking the time—
Art Wing:
My pleasure.
Craig Willett:
—to spend the afternoon with me.
Art Wing:
Good to see you again.
Craig Willett:
It’s been wonderful to get to see you again. This is Craig Willett, The Biz Sherpa. I’m glad you joined me today at Little Giant Ladder Systems. What a great company. What a great story. And I hope there’s a lot for all of us to learn from this. Thank you for joining us.
Speaker 1:
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