Interview with
Philip Cable, CEO of American Science and Surplus
BRADLEY: Tell us a little about your background.
CABLE: Well, I have a degree in English Literature, which gave
me a good classical education, but I went directly from Beowulf
into business. I've started and sold a few businesses -- everything
from rehabbing single-family homes on spec to opening a 12,000 square
foot bar near Wrigley Field. I eventually went back to school, attending
evening classes and earning an MBA from DePaul University, and began
looking for an established business to acquire. Having started from
scratch a few times, I decided to reduce my risk and purchase a
going concern. I came across American Science & Surplus. It
was a perfect match for me. I’ve been a science geek for as
long as I can remember, and I was interested in catalog marketing.
After 13 months of negotiation, I purchased the business.
BRADLEY: What about the company?
American Science & Surplus was established in about 1937. At
that time the founder, Mr. Al Luebbers, was working for Western
Electric, here in Chicago. Al had a great interest in optics and
he noticed that a company next door to the plant where he worked
was throwing away reject lenses. He asked them if he could buy the
rejects and they said, "No. But you can have them if you will
haul them away." Al and his wife Buddy took the lenses, cleaned
and polished them at their kitchen table in the evenings and decided
to offer them for sale. They placed an ad in Popular Science offering
ten lenses for 50¢ and began to receive orders. Al figured
that if they changed the ad to "Ten Lenses for $1" people
would think they were better lenses and buy more. So he did. And
they did. And the business was launched as American Lens & Photo.
After the Second World War the company expanded, fed by war surplus.
Eventually, Al opened a regular store on Chicago's Northwest side
called American Science Center and started carrying educational
science items.
In the 1970's Al & Buddy's son Jerry joined his parents in the
business, eventually taking it over from them. In 1979 he started
a catalog operation under the name "Jerryco" and in 1981
he opened a second store, in Milwaukee.
In 1988 Jerry took in a partner, Scott McCausland, who bought out
the Luebbers after Jerry's unfortunate death a short time later.
After consolidating all operations under the name American Science
& Surplus, he started the first web site in 1995. In late 1999
he completely rebuilt the web site and started taking on line orders.
In 2000 McCausland retired and sold American Science & Surplus
to me.
BRADLEY: What do you like most about running the company?
CABLE: What I like most about American Science & Surplus is
that we are fascinated by discovery and invention. And we are dedicated
to having fun along the way.
We supply a wide range of unusual and hard to find items (some
say bizarre stuff) to the hobbiest, tinkerer, artist, experimenter,
home educator, do-it-yourselfer, and bargain hunter.
Customers have used American Science and Surplus items in home
made cars, sculptures, precision instruments, home made telescopes,
costumes, model railroads, window dressings, holiday decorations,
and innumerable science projects. Our items are great gifts, inexpensive
supplies, and an endless reason for a giggle or a "Gee whiz!"
We try to be scrupulously honest in presenting whatever we know
about what we have, and always take it back, no questions asked,
if the customer isn't satisfied with it.
BRADLEY: What was your worst mistake?
CABLE: I've made my share of mistakes, as you do when learning
different businesses, but my worst was IT related. I made a decision
eight months ago that had serious consequences, and I’m still
working through them. Our company is largely run by an integrated
computer program that handles everything from order management and
inventory control to campaign management and accounting. The firm
that wrote our old software had gone out of business back in the
’80s and it was time to migrate to a new system. I did extensive
research, studying the various packages available, sitting through
demos, visiting end users. I felt I had done my due diligence. Although
it was the most expensive choice, I selected a package that was
considered the leader in the field, with the largest installed customer
base. Our data conversion and implementation went great. Only after
the software was up and running for a week did I find that it had
an incredible number of bugs. It turns out that we went live on
the latest version of the product – the new “upgrade.”
The end-users I had interviewed all had the older, more stable version
of the product. I failed to anticipate the enormous number of bugs
that could be introduced in a new version. One expects some glitches,
of course, but this was ridiculous. Had we gone live a few months
earlier, we would not have had this issue -- unfortunate timing,
to say the least.
BRADLEY: How did you fix it and what advice do you have
for others in similar situations?
CABLE: The first thing we did, the most important thing, was to
quickly develop workarounds to insulate customers from the problems.
I brought in an outside programmer to help me with some of the workarounds.
All customer-facing issues were given the highest priority. And
I’ve been working with the vendor, of course, identifying
and documenting problems so that they can devote their programming
resources to fixing them.
I never doubted my abilities, but you do have to be realistic about
what you’re capable of doing. It’s important to know
what you don’t know. Software can be especially frustrating
for me, because I am not a programmer. I feel that so much is out
of my control. It’s not like an operations issue. Then I can
go out to the warehouse and redesign a process or move some racking
around, and feel that I’ve made a difference. Besides, I have
great people working with me and I bring in additional brainpower
when needed, so I’m confident about my overall ability to
run a successful business.
If I could do it all over again, I would demand that we be brought
live on a proven version of the product. I failed to adequately
research the timing of the update and its possible repercussions.
We really felt we had done our due diligence in selecting this
software. Our research was exhaustive. Our timeline left plenty
of room for the unexpected. We had a detailed, realistic conversion
and implementation plan. Despite this, the project went poorly.
As for advice, it goes without saying that you should ask every
question you can imagine, but I’d suggest they also seek out
a disinterested expert in the field -- maybe a couple of them --
and find out what they would ask, and what would be important to
them. And I’d suggest that a business owner, or anyone, balance
being on the cutting edge of any technology against the dependability
of using a proven product. Sometimes that edge is necessary. The
trick is knowing when it’s necessary, and when it’s
a liability.
BRADLEY: What was the impact of this mistake on your business?
The impact was, and still is, enormous. Not only did I have to
deal with getting my people up to speed on the new software package,
I also had to deal with the bugs. I assumed that many of the issues
we were having were our fault. I thought we had problems because
we weren’t familiar with the program, because we weren’t
using it properly. It took us a while to figure out that the program
was broken; it was not operator error. The functionality was not
there.
One of the bugs affected mailing list. I discovered that we were
not mailing catalogs to all the customers who should have been receiving
them. This had a very significant adverse affect on sales. Had it
continued, it could have sunk the company. It certainly upset many
customers. Some of these customer relationships are reparable, some
are not. It will take months, if not years, to fully recover from
this.
BRADLEY: What advice would you give to others about growing
their businesses?
CABLE: My company was established over 60 years ago. Growing a
mature business such as this is a real challenge. The low hanging
fruit was picked long ago.
It’s important to actually budget time to think about the
big picture. It’s too easy to get overwhelmed by day-to-day
operations. Reserve time to meet with your top people, and plan
specifically to discuss large, strategic issues.
Identify the parts of your business that are growing and concentrate
on those. Don’t focus only on your best product or best customer,
neither of which may have room for growth. Your best product or
line today may not be your best five years from now.
Also, when you decide to reengineer a process in your business,
make sure you are reengineering the right process. You could have
the best invoice-reconciling process in the industry, but is that
going to grow your business, or increase your profit margin? Is
it really worth the effort and investment? Effective process design
is important, but selecting the right process to design is most
important.
Ben Bradley is the managing director of GrowingCo, Inc. and The
Bradley Group. Do you have a question or topic you would like Ben
to address in an upcoming column? Please send your comments to ben@benbradley.net.
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