Opening Doors…Life After Big Yellow

by Amy Chovan

While the negative impacts of the recent recession have been given considerable media coverage, few outlets have discussed the positives that have come out of the downturn, which include a spike in entrepreneurship. Counterintuitive as it may be, the creation of new businesses actually tends to increase during recessions. In fact, according to the Kauffman Foundation, “half of today’s Fortune 500 companies were founded in a recession or bear market.”

When the region’s largest employer began tightening its belt, the Peoria area felt the repercussions, both in the pocketbook and in spirit. But it also catalyzed a wave of forward-thinking individuals who didn’t let the situation get them down and weren’t afraid to take calculated risks, even in a down economy.

Many had kept ideas on the back burner while gainfully employed at Caterpillar and used company layoffs and voluntary separation packages as the extra push they needed to transform those ideas into functioning businesses. These individuals have found numerous avenues of support in the local community and are tackling the obstacles of starting a new business head-on. Their decision to take the entrepreneurial leap has led them to find that life after Caterpillar isn’t so bad.

Charge 4 Charity
Jenny Mandel was one of the first 20,000 employees to be let go in late 2008 when the recession led to significant downsizing. She had worked as an IT analyst at Caterpillar for six months, but like others in this story, had thought about starting her own business for awhile, and the layoff presented the perfect opportunity to do so. It didn’t take much time to get her new venture off the ground, either. She was able to acquire her business license and begin operations just seven months after leaving the company.

Prior to her stint at Caterpillar, Mandel had managed a country club’s pro shop in Florida. Wondering why their credit card processing fees were so expensive, Mandel met with someone in the industry who showed her his portfolio, and the numbers blew her away. “The gist of it, I learned, is that there’s a really high profit margin,” she explained. “The only thing that’s regulated in the industry is security, not actually the prices.” Mandel’s first thought was, “Somebody needs to sign on here and start giving some of this money to charity!” And that’s just what she is doing with Charge 4 Charity.

Because of its high margins, the credit processing industry has become very competitive—merchants often receive several calls a week from companies hoping to gain their business. Mandel had to find a way to separate herself from “all of those annoying people” and get them to listen to her sales pitch. Initially, she did this by reaching out to local businesses and following referrals from personal acquaintances. But after a bit of media exposure, merchants started calling her, and, she says, she’s hardly been able to keep up with the calls.

When a client signs on with Charge 4 Charity, they select a nonprofit group they’d like to support, and Mandel donates 10 percent of her profits after expenses to the chosen charity. She noted that many of her clients are quick to sign off on the business side of things, but have a harder time choosing which charity to support. “The neat part,” she said, “is when you get 10 or 12 businesses supporting one charity—the donations start stacking up!”

With the technical skills she honed at Caterpillar, Mandel was well positioned to understand the complex workings of the industry she was jumping into. After researching 26 different processing companies, she developed a firm idea of the qualities she wanted in her own company, and signed on as an independent contractor for United Payment Services, which provides the terminals and technical support for her clients.

So far, her plan seems to be working. Since last June, Charge 4 Charity has seen exponential growth, which tells Mandel she’s doing something right. “What I do can seriously help people…No one else anywhere is doing specifically what I’m doing,” she said, adding, “It’s a great way for merchants to give back.” With ambitions to eventually expand nationally, her biggest challenge is to get her voice heard in an extremely competitive industry.

Although life immediately after Caterpillar was a shock to the system, Mandel admitted, “It’s a little bit of a blessing in disguise. If I hadn’t gotten laid off, I probably wouldn’t be doing this.” And the success she has experienced early on has given Mandel the resolve to continue pouring her blood, sweat and tears into growing her company.

Brown and Crew
Although they worked in close proximity at Caterpillar, Becky Brown and Doug Crew didn’t often work directly with one another. But a single project that required both of their skill sets brought the two together and laid the groundwork for their future partnership.

An executive speechwriter at Cat for five years, Brown had already thought about starting up a freelance communications business. “I always knew that corporate life wasn’t going to be for me long-term,” she said. “I never really wanted to be anybody’s boss, but I also never really enjoyed having a boss. I don’t like to direct other people’s work, but I like to be in charge of my own.” When she was offered a voluntary separation package, Brown decided to take advantage of the one-time offer. She developed a business plan for her own freelance writing company, Brown Ink, which she was able to get up and running quickly.

After 30 years at Caterpillar, Doug Crew, manager of governmental affairs, also took the separation package at the beginning of 2009, retiring several years before he had planned to do so. But while Brown had given a lot of thought to life after Caterpillar, Crew was still trying to figure out what he wanted to do. “This [partnership] provided a good opportunity,” he said.

“We had both decided to leave at the same time for different reasons, and almost facetiously said one day, ‘Oh, we ought to work together,’” explained Crew. “Out of that came the idea that with the range of experience we had in communications…there was a niche locally that we could fill.” They had planned to wait a month before diving into the new venture, but within a week after leaving Caterpillar, Brown received a call about a project with an element of government relations to it, and so called on Crew earlier than anticipated. The aptly-named Brown and Crew was up and running.

Not your traditional marketing firm, the pair is, according to Brown, “trying to find organizations that need the mix of what we offer, this ability to reach out to government officials, the media and local stakeholders—which is really Doug’s expertise—and the message development and writing side of that—which is my expertise.”

One of their biggest surprises has been the amount of work they’ve already been able to land. Having founded the business in the worst recession since the Great Depression, Brown didn’t think it would come as quickly as it did. Crew sees their success so far as foreshadowing what’s to come. “If we can create this entity in early 2009 when the economy is still sliding, and establish our expertise and credibility at the bottom of this economic cycle, when things pick up, we should be well-positioned to be able to serve more clients.”

While they have been fortunate for the projects that have come their way, they can’t afford to get complacent. “In the corporate environment,” Crew noted, “there is always more work in the pipeline—always more projects. Here, the pipeline isn’t always full.”

But even when the work is a bit slow to come, the two are busier running a small company than they were at the Fortune 50 giant. Brown reports that much of her time now goes to business management tasks—preparing invoices, developing proposals, maintaining client relationships—where before, those tasks weren’t in her job description. At Cat, there was always someone to help out if time ran short, but when you work for yourself, said Brown, “There’s no one you can go to and say, ‘I just can’t do this.’ If it needs to be done, you have to do it.”

Water Street Media Works
Bob Wojda got his start in the video business at local news stations WTVP-47 and WEEK-25, before moving on to larger markets. When he returned to Peoria, he began a diverse, 15-year career at Caterpillar in the video department, later logging time in the company’s marketing and sustainable development divisions. But as the last hire in the sustainability division, Wojda was also the first to be let go when the company initiated cost-cutting efforts.

Wojda is grateful for his time at Caterpillar, adding that he would not have the same skill set and leadership abilities were it not for his many years there. Noting that he was merely sitting in the wrong chair at the wrong time, he marveled that an employer would invest so much time and money into training him and then let him walk away with such an extensive skill set. While he wasn’t happy to have been let go, said Wojda, “The worst things that happen to you sometimes present the most opportunity.” And so, after recovering from the shock of losing his job, he sat back and asked himself, “What can I do with this [skill set]?”

Wojda had always dreamed of starting a creative business of his own, and just a few weeks after leaving Caterpillar, he started thinking about a business plan, what his niche market would be, the equipment he would need, and the right people to help make his vision a reality. With support from his wife, friends and local businesspeople, Wojda returned to his love of video production and founded Water Street Media Works, which specializes in the creation of moving images for video or the Web.

Think about the business that needs an introductory video, a product demonstration or an interactive piece to showcase the capabilities of a new machine. With the surge in YouTube’s popularity and the ready availability of video on cell phones, people no longer just want to read about these things, they want to see them in action. That’s where Water Street Media Works comes in.

A steadfast believer that people should love the work they do, Wojda hopes to attract creative team members who want to pursue passions of their own. “You should be passionate about your job,” he said. “If you follow that, it tends to point you in the right direction, and all the other stuff falls into place.”

Wojda noted that young people coming out of school today have considerable talent; they just need some direction. He feels a responsibility to help develop that young talent, much like Caterpillar developed and directed him. “I hope this becomes the kind of place where, 20 years from now, there’s 40 or 50 people all saying they started at Water Street Media Works—and what a great experience!”

In its first eight weeks, Water Street Media Works saw a steady stream of business. Working with local ad agencies and some business-to-business accounts, Wojda already feels like he’s nurturing long-term relationships. “It feels like you’re helping [clients] with their problems instead of just trying to sell them something.”

Wojda would like to see his company become the premiere creative house for motion graphics, initially at the local level. He said that Peoria will be a big part of how the company grows, but ultimately, there’s a lot of opportunity outside of the River City. And with the increased communication capabilities of the Internet, you don’t have to be in Chicago to work for Chicago-based businesses. But, he cautioned, “We have to start here first and make sure we’re doing the right job before we can make that jump.”

Wojda is anxious to see what things will look like for Water Street Media Works a year down the line. His biggest challenge going forward is running the business side of things. But with help from local business leaders like Susie Ketterer, Pat Sullivan and Al Covington, he appears to be on the right track. The willingness of others to help him came as a surprise to Wojda, who expected to be on his own in many respects when starting his business. “It really surprised me that people really do want you to succeed,” he said. “They’re really supportive.”

Intellihot Green Technologies, Inc.
A few years before being offered separation packages, Sridhar Deivasigamani, who led new product innovation programs for Caterpillar, and Sivaprasad Akasam, a senior engineer on advanced mining trucks, inadvertently began what would become Intellihot Green Technologies.

One fateful day, Deivasigamani found a water leak in his basement that had originated from a broken water heater. While repairing it, the two engineers wondered why the nearly century-old technology used in tank water heaters had never been updated. They had been working on electronic components for another project and thought the same technology might improve the water heater. One thing led to another, and before they knew it, Deivasigamani and Akasam had discovered a novel way to heat water. “It kind of snowballed into that,” stated Deivasigamani.

Even as their innovation remained a basement hobby while they worked at Caterpillar, Deivasigamani and Akasam debated starting their own, full-time venture for several years. “The mood was: hang onto your jobs while you can,” said Akasam. But when the company offered voluntary separation packages in 2009, it was time to leave their well-established careers. “We definitely took the road less traveled, but we had given it a lot of thought, had full faith in our idea and had done our due diligence.”

Traditional water heaters operate at just 60-percent efficiency and last just six to 10 years, according to Akasam. Intellihot’s product—the first gas tankless water heater made in the U.S. specifically for the U.S. market—is 98 percent efficient and can last up to 15 years. The tankless design heats water on demand—only when it needs to—reducing wasted energy. Already in the product certification phase of development, the innovative system is expected be on the market in August or September of this year.

To go from prototype to market in just a year, Deivasigamani and Akasam had to call on all of their resources. Understanding that they didn’t possess all of the skills needed to bring their idea to market, they utilized a team approach to starting their business—one that had been ingrained in them at Caterpillar. Surrounding themselves with smart people, said Akasam, “was a key enabler to [our] fast progress…There are people out there who are really good at what they do—we just pull them together.”

Intellihot hopes to produce other high-efficiency products that use—and waste—fewer natural resources, and the two already have several patents pending. They are currently looking to transition the company from the Peoria NEXT Innovation Center to a larger site where they can manufacture and fill substantial orders. As this happens, the company will need to hire additional employees to fill sales, marketing and product support roles.

Their time at the Innovation Center has been invaluable for Deivasigamani and Akasam. “When we came to Peoria NEXT with a business plan, we thought we had it figured out,” said Akasam. “But in meeting with more and more people, we were able to understand all of the dimensions [of running a business].” Their openness to constructive criticism and friendly advice has played a large part in their success so far.

As they face barriers to entry as a smaller player in the industry, Intellihot continues to push forward, knowing that their product is superior to what is currently on the market. And with the help of others within the community, there is great potential. Intellihot is definitely a company to keep an eye on.

DJMP Engine Solutions, LLC
Every 15-barge tow, a typical size on the Mississippi River, transports the same amount of cargo as 1,050 semi trucks. Not only is the use of barges more cost-effective, it’s also more environmentally friendly. Think about the emissions and congestion produced by 1,050 semi trucks versus a single marine tow vessel. The Environmental Protection Agency (EPA) prescribes strict standards for all vehicles, whether river, road or rail, but while numerous grants and funding options are available for the upkeep and emission compliancy of highway trucks, there is little assistance for marine vessel owners.

That is where the local start-up DJMP Engine Solutions, LLC comes in. This four-person company comprised of former Caterpillar managers helps marine vessel owners determine how they should maintain or upgrade their fleets, and works with various government agencies, including the EPA and Department of Transportation, to acquire funding for necessary vessel modifications.

Specifically, DJMP provides fleet analysis, emission regulation interpretation, project management, grant funding assistance, grant administration, and technical and financial analysis. They work with small fleet owners to determine the best plan for upgrading their vessels to meet EPA standards.

Don Haar, Jim Peugh, Mike Bima and Paul Dicke are the men behind the abbreviation, DJMP. With a collective total of more than 150 years at Caterpillar, each partner brings different strengths to the table. A former marine parts marketing consultant at Cat, Haar now serves as the company’s marketing manager. Peugh, a marketing professional in the Global Used Equipment Division, serves as the business manager. Bima, who worked in project management, is operations manager, and Dicke, an engineer and Six Sigma Black Belt, now serves as technical manager. All four partners took voluntary separation packages when they left Big Yellow last February.

Dicke had considered becoming an independent consultant for some time, but, he said, “It was safe to stay at Cat, so I never had the guts to step out of that safety net and go into business for myself.” His separation package was the chance to go out on his own. “It may have been the best thing that happened to me,” he admitted.

Haar said that his continuous contact with people in the industry spurred his decision to become an entrepreneur. Bima was looking to pursue opportunities with other companies and hadn’t planned to go into business for himself. But when the four men met at transition workshops sponsored by Caterpillar as part of their separation packages, they realized they had a certain synergy. “We had different, but complementary, skill sets that made this business work,” explained Bima.

Not only do they bring different skills, each of the partners of DJMP has a unique set of worldwide contacts on which they can call. Currently laying the groundwork for their new business, the guys at DJMP spend much of their time networking. Earning credibility, said Dicke, is one of their greatest challenges. “Before, I was a Caterpillar employee,” he said. “Now, I represent a partnership of four. I’ve got to sell and prove myself.”

But they’re not in it alone. One of the biggest surprises when starting the business, said Bima, was the amount of free support available to small start-up businesses in the community. With resources like the Turner Center for Entrepreneurship at Bradley University, Peoria NEXT, ICC, SCORE, Novus and more, DJMP has found numerous places to turn for help in developing their business.

In general, life after Big Yellow isn’t that bad for the guys at DJMP Engine Solutions. In fact, it’s pretty good. Each partner wears more hats than he did at Caterpillar, but they enjoy being able to set their own goals and truly enjoy their work. “We’re doing something a little different from what we’ve done before, and it appears to be different from what others have done,” explained Bima. With big plans, the partners at DJMP hope to grow their business in the Peoria community, creating new local jobs as they do. iBi

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