Jose Palomino: Welcome again to the Revenue Throughput podcast. This is Jose Palomino, your host and our guest today is a CEO, owner, operator of a really fascinating company. He’s Curt Snyder, CEO of Lancaster Products based in Lebanon, PA, and they are a solutions company dedicated to improving material mixing and processing. They design and build complete mixing pelletizing and crushing systems for a wide range of industries and different materials and applications.
I’ve known Curt for years, and I’ve seen firsthand how he’s applied some best practices and principles to grow and thrive in a number of highly competitive markets. Well, let’s welcome Curt Snyder to the Revenue Throughput podcast. Hi Curt, glad to have you here.
Curt Snyder: Thanks for having me Jose, I appreciate it.
Jose Palomino: Yes, so Curt, in my introduction I mentioned how I just focused on one business right now. The Lancaster Products that I’ve certainly grew to know you best through initially, could you just provide a brief background how you came to to become the owner of Lancaster product?
What drew you into the world of heavy industrial manufacturing?
Curt Snyder: I had been working in mergers and acquisitions for probably close to 15 years prior, part of that was in aerospace, so it’s fairly complex, highly engineered heavy manufacturing type of product. I had been traveling the world, making acquisitions, and had a young family and quite frankly was tired of being away. So much so, when the opportunity presented itself, I was able to go out on my own and I found Lancaster Products, and Lancaster Products seem to be really interesting. A heavier manufacturing company with proprietary products with some really interesting technology. Also the owner was ready to retire. So, I was able to step in and and take it over about five years ago.
Jose Palomino: Wow, so that that was a a shift from looking at the strategic balance sheet / P&L and whether something is worth acquiring and investing in, to then shifting into being in the driver seat. You’re actually running a business now, which is not so typical.
If there is such a thing, what is your typical or your ideal customer for Lancaster Products?
Curt Snyder: Well, we look at two types of customers…… First, they have to have some sort of powder or slurry that needs to get mixed, but aside from that, I think that there’s really two types of profiles that we look for within that category. We’re sort of material agnostic. I mean, we do everything from, ash to ceramics, to organic materials – You know for fertilizers and that sort of thing. So, we have a bunch of different industries and materials that we we can utilize, but the one common denominator is that they’re all powdered or solid materials that need to be mixed or pelletized.
Within that we look for two types of customers. One, that has a need for beneficial reuse, so either transforming their waste streams into another product or reintroducing their waste streams into the production stream again. We’re able to densify, mix, and combine it with something else making either a new product from it that’s no longer a cost to dispose of, but now it’s an additional revenue stream, or we’re able to help recover product that would otherwise just be landfill because it’s unworkable. So we’re able to bring it back to the normal production stream.
The second type of customer is using ‘normal’ or virgin materials and looking for ways to turn them into value-added, marketable products using our process. Our mixers can increase the value significantly, from raw material to end product. It’s more than 1 + 1 + 1 = 3. It’s the combination of all three in a proprietary mix that allow for much higher returns on than you would get if you were just selling the individual components. So yeah, that’s the two types of customers we look for.
Jose Palomino: So, in the first example you gave, you know reintroducing materials into production processes and so on you are literally taking waste and turning it into cash.
Curt Snyder: Yes, yeah.
Jose Palomino: Essentially, and in the second example, somebody might have already been doing something with their materials, but you find a way to actually allow them to get more out of their materials than they get from the current process, right?
Curt Snyder: Yeah, so we’re able to watch the efficiency increase and the rate of their production process improve, especially with high value materials. Every little bit is significant incremental profit and we’re able to do that in a much more efficient manner than most other machines in the same category.
Jose Palomino: OK, now when you acquire the firm, some of these core technologies that you’re referring to here, like the ability to do these special processes…. were they already in the company?
Curt Snyder: Yes, they were. They had been developed by the previous owner and the previous generation of engineers that worked for him, but they didn’t really commercialize it all that well. They had one very large customer that was high tech and was nearly the entire business, and they really catered to it. But, when I looked at it, I thought to myself, ‘Well, you know if this high performance, high demanding customer likes our mixer and we’re sole source with them for a very difficult product to make then we really have something here that we can expand it to other industries and other customers that have similar or even lesser demands.’ With our capability being able to get us through that door.
Jose Palomino: You know what I love about that story? Especially for our listeners who are also, basically owner operators in that anywhere from 5 to $50 million sized companies? It’s the fact that you took something that was already there (and this is something we always like to emphasize with people) like a treasure already in your business….You’re just maybe not leveraging them. You know you’re not bringing it to the surface, you’re not. You’re not really letting people know about it.
So it seems like that was a big part of your focus was to say who else could benefit from this thing that is very demanding technically. Then other people gonna think it’s great too. Yeah, and you broke through that customer concentration hurdle which could be death for a small company.
As you look at and you’ve been experiencing this growth and you’ve taken over this operation over the last five years and found these other opportunities, what what would you say were some of the challenges you face? I mean, you had this vision probably from the from the day you acquired it. You saw the potential, but getting there is something else, right?
Everybody has a great road map. Driving the distance is is something else, especially when there’s boulders and lava pits along the way. So what are some of the big challenges you faced if you look back over the last five years to grow your business?
Curt Snyder: Essentially I was taking a sleepy, no growth or flat growth company and really, sort of turbocharging it. There really wasn’t a formalized sales, organization or marketing strategy – their marketing was nearly nonexistent. I mean, it was focused on just product features, not capability or what you can do with the machines and was a little misguided in that approach.
Product design, while the basic technology was there, it really hadn’t been updated in any sort of meaningful way in probably 15 years. I had to bring on a new engineering team to be able to take a look at the existing drawings and work with our manufacturing floor to be able to improve and modernize a bunch of different features on the mixer. The basic technology is still the same, but the overall mixer is way enhanced, way more enhanced with more modern technology that didn’t exist, 15 or 20 years ago.
Operations wise was not lean at all and was very old school manufacturing. We introduced lean to the overall program for more accountability. Inventory clean-up, that sort of thing and almost every area of the company had to require improvement or or bring it into modern times because they just had stopped moving forward several years ago and were just either sustaining or not even progressing in a lot of areas, so from a cultural standpoint, it was a shock to the company. Some people really took to it because they knew they wanted change and had many years ahead of them at the company. They really became champions for it, so I was lucky that I had that internal support that allowed me to move the whole company forward.
Jose Palomino: So, here’s what’s interesting about that, Curt…..you take over the company that has been around for decades and you take over the company five years ago. So in a sense, you came in with a fresh set of eyes, right? A lot of people listening to this podcast may say, well, I’ve been running my business for 20 years and we’re doing OK. How would you maybe advise them get fresh out of box? I mean you had everything was new to you because you were just walking into a company that already existed. But imagine somebody who’s been in a company 20 years, they still have to do the same thing you did, but it’s really hard sometimes to to do that, so you know, is there like a word of wisdom to that owner who maybe hasn’t really done that top to bottom review that you did because you were coming in as the new owner? What would you say to that?
Curt Snyder: I would say, ‘Think about it as if you were starting over with nothing.’ How would you structure the business knowing what you know today?
Who would you hire?
How would you leave the company? You and I know there’s a lot of legacy issues with companies, and there’s people, process, and technology issues. But forgetting all about that, just think about your product and your customer, if you could start over with a time machine and rebuild the company from scratch, what would you do? Your new company would probably look very different than your current company, I would imagine. So, I think that’s the mindset to go into it, and then actually implementing the change is whole different story, but that’s the way I would think about it.
Jose Palomino: So really kind of re allowing yourself to think of the clean sheet of paper if you could. A lot of people get stuck on, ‘Well, yeah, but we can’t do that and I have these people here and I have these commitments and so on.’ But you’re really saying, at least on paper, challenge yourself to think about what’s possible.
Curt Snyder: Yeah. Obviously, you have to honor your commitments and current company structure, but if you could re-imagine what your company would look like if you had to start over again, I think that’s a good place to start. At least you know you can identify you areas where you think that you need to improve or would want to change things. That’s part of the battle, just identifying what’s possible and what you think would work better.
Jose Palomino: And without going into particular details, did you find that there were some changes you saw as necessary that were implemented much more quickly than you expected, and others that took a lot longer than you expected? I mean, were you surprised by the rate of change in some areas?
Curt Snyder: You know, I wasn’t surprised with it. I mean, I know, sometimes I tried to change things and it wasn’t working and I sort of said, OK, let me retrench and try something else because obviously this is too much too quickly. Even though I knew it was the right way to head in the right direction and it would get me to the outcome a lot quicker. I knew that with the company culture and the people, they just could not make those changes that quickly. And, I don’t want to risk the current business so you have to be careful, right? You have commitments you have to honor, so you have to think about, ‘OK, what’s the best approach? Alright, this is not working. I know this is the right way to go, but, let me try something else or let me introduce this more slowly or let me introduce something else to help me get further along the journey so then next time when I introduce this concept I can make it successful.
Jose Palomino: It’s kind of like what the doctors say with the Hippocratic Oath- first do no harm, right? So you don’t want to blow up your current revenue stream yet you don’t want to not move forward, right?
Well, looking at moving forward and again I know you don’t have a particular crystal ball that other people don’t have, but you have opinions and you’re out there in the market, what do you see as, from a business owner perspective, showing up on the horizon is maybe the biggest challenge over the next couple of years for anybody in your position owning a business?
In, let’s say whether it is industrial categories or what have you, but just what do you see as the biggest challenge if we look out over to 2025, what strikes you as being something people should be thinking about?
Curt Snyder: I think the number one challenge is probably scaling for growth. The demand for good employees is increasing so you’re obviously going to be careful about who you bring on and make sure that they’re aligned with your goals and able to simulate with the company culture.
Hopefully after we come out of this pandemic we’ll see a lot of growth and it’s sort of rebounding from what I consider a pretty low point, so just scaling and being able to grow the business to match pent up demand and hopefully, future demand.
Jose Palomino: Well, that’s actually an optimistic challenge to look forward to, that there’s going to be this demand and you need to be ready to meet it. And probably the other side of that is also timing, right? You can’t just scale up and grow your infrastructure until demand is there, but you can’t wait till demand is fully there to decide to scale up. So it’s an interesting dance that you have to do.
Curt Snyder: You have to believe you’re going to grow. I mean, otherwise if you don’t believe that you have the ability to grow, even if you have to change your path like slightly, if you don’t have that belief, then it’s not going to happen. Sometimes growth happens by accident, but most of the time it happens by design.
You have to build the company to be able to grow and at each level you have to be able to support your customers and support your existing employees. I know it’s a chicken or the egg type problem, but it’s really like one build on the other and you have to be able to have that design in your head and then start implementing it. But I think in this case where we’re going from an all-time low to potentially an all-time high in a very short period of time. Basically, my businesses are condensing two years of sales into one so it’s like you have to really think about how do I scale, but also scale for long term growth as well. Not just tomorrow, but what would make sense from an organizational design need for my team to be able to achieve these growth rates and not just for next year or the year after, but for the next 5 years.
You have to have that plan in place. You know how you’re going to hire and obviously as things progress, you have to be flexible to be able to change or adapt, but at least you have to start with that concept and that belief.
Jose Palomino: Well I love two things….I mean everything you said was on point there Curt, but two things in particular, you used the phrase ‘growth by design’. I love that idea and everything that represents. Yes, there’s certain things you do that breaks along the way sometimes, and sometimes headwinds can slow you down, and so on. Those are things that we can’t control, but whatever we can control, we can control by being intentional about it and then the kind of the big thought behind that, which I really appreciate, was you got to believe it. If you don’t believe it, if you don’t even believe it as the owner, then no one else is going to believe it more than you and no one is gonna believe it for you.
I think that’s a great word of wisdom here for our listeners from Curt Snyder and with that Curt, I just want to thank you again for taking the time for this interview. I think you’ve shared a lot of really great insights that our listeners will really appreciate, and if people wanted to learn more about your business, where should they go?
Jose Palomino: And we’ll include those links in our show notes for those who pick up our podcast that way, and Curt once again thank you so much I really appreciate it.
Curt Snyder: Thanks for that, appreciate it.