Oscar DiVeroli: I would like to welcome to the studio today Gordon Stula, the founder Engeocom Distributors. Welcome.
Gordon Stula: Thank you. It’s great to be here. Thanks, Oscar.
Oscar DiVeroli: Gordon, tell us a little bit about Engeocom Distributors.
Gordon Stula: It wasn’t my main business. It still isn’t. It was something that we started back … it’s 20 years now, it’s our 20th anniversary … really for the love of cosmetics. It’s a very sexy industry. We distribute cosmetics throughout the Russian Federation and some of the surrounding countries. We’ve been fortunate enough to work with some very big companies, like Unilever and Proctor & Gamble, and we distribute their products for them.
Oscar DiVeroli: What is unique about your company?
Gordon Stula: I would say that doing business in Russia, because Engeocom Distributors is a Russian company, we bring to the, I think, competitive field a Western edge. By that, I mean that we’ve applied Western marketing and sales principles early on, where we gained an advantage, I would say, in terms of having a continuity in the message and communicating to not only our customers, but our prospective customers in terms of brand and that type of message.
Oscar DiVeroli: What is the ultimate vision for your company?
Gordon Stula: Actually, from a financial point of view, I would have to say with my partners, our vision is to grow it to a certain size, and then try to look for a multiple for an exit. Where are we in that process? I would say we’re probably within 5 to 10 years away. We’re having too much fun with the business right now to really consider that, but that would be the ultimate vision.
I would say from an altruistic business vision, we’re interested in really bringing on more brands that fit within our comfortability zone, if you will, and just growing the business in a speed that is going to be manageable, where we don’t grow too fast.
Oscar DiVeroli: When you launched the business some years ago, did you have a detailed business plan at that time?
Gordon Stula: Absolutely not. We serendipitously began by basically backing into the business. Somebody approached us with a brand, and they wanted us to distribute their brand while we were in another business industry. We said, why not? It just turned into distribution, and I had no prior experience with distribution in the early ’90s.
Oscar DiVeroli: From the early days, how, if any, has your company changed?
Gordon Stula: Certainly we’ve become much more professional. The quality of our employees has risen greatly. We really have some fine leaders on our management team with great experience from some big corporations. When our volumes, and our revenues, and profitability grew, we were also able to then invest back in talent that we have now. I would say with that talent comes procedures, and policies, and different tools from big corporations that they’ve brought with them, and it’s profoundly changed the landscape of our business.
Oscar DiVeroli: How were you able to establish credibility early on?
Gordon Stula: I think, again, bringing that cachet of being an American selling American and European products in Russia. We were able to convey the message … basically, not reinvent the wheel, but use some of the marketing plans and guidelines that the manufacturers that we represent use and able to translate that into the local fiber, because we understand the Russian consumer very well.
Oscar DiVeroli: Gordon, you’re one of the most successful entrepreneurs I’ve ever come across in my 25 years. What habits helped make you that person?
Gordon Stula: First of all, thank you very much. That’s great high praise, coming from you.
Personally, I thought about this recently, I would have to say my determination and perseverance. Failure doesn’t really deter me as it might someone else. I believe I’m a hard worker, consistent worker. I think you have to work consistently, not just hard, in the wrong direction.
I think I’m a planner. I think I’m organized in the sense of the fact that I will take a look at where I am now, where I want to be, what my goals are. I’ll write certain things down, and then I’ll not only have that plan, but then I’ll very succinctly write a plan of how to get there. I think that’s helped me to visualize where I want to be within a year, five years, and so forth. I don’t really go out past five years.
Oscar DiVeroli: How did you fund initially the start-up of your company?
Gordon Stula: Basically, funded it myself. My brother, I purchased him out. But at that time, we were in a different industry completely, and we just took the profits from that industry and rolled it into this new venture. It was self financed.
Oscar DiVeroli: Now, your company has exploded in terms of growth. How have you been able to fund the growth of your company?
Gordon Stula: That’s great. Good question. I’ve taken on a strategic partner within the last five years, five years ago, and we both put some money back into the business. The business has been growing about 30% a year, year over year, so it is by any terms exploding with growth. We’re just investing every penny back in. Every penny that the business spins off in profit, we invest back in. We’re reaching into our pockets where it makes sense.
Oscar DiVeroli: What is the most creative or unusual sales tactic that you’ve ever deployed in acquiring a new customer?
Gordon Stula: I don’t know how creative it is. That’s an excellent question. We own retail stores as well.
I’ll go back to the distribution. We’re distributors, and then we have chains of mono-brand retail stores. It’d probably be a little bit more challenging to answer that for the retail because it wouldn’t be so unique. It would be basically something that a retail store would employ to get new customers, advance and contests, and things like that.
With regard to distribution, I think what we like to do is if we have these big chains of stores, either cosmetic stores or department stores in Russia, and we somehow can’t get a yes or they won’t take one of our products, I think what we like to do is figure who knows the top head honcho there. I think one of the tactics we’ve used is I’ve made a call to either the owner or so forth and asked them out for lunch, and then sideways slipped them into the conversation, and then we have a meeting follow-up. That’s that trickle-down effect. Where my guys, even my CEO, can’t get any headway, then I’ll go over the top. That’s worked well for us.
Oscar DiVeroli: Gordon, in the last five or 10 years, what was the most difficult decision you had to make as an entrepreneur?
Gordon Stula: I don’t know about difficult, but it was an interesting moment, a pivotal moment. It’s when I purchased my brother out. He was willing to exit and wanted to more or less stay stateside. Then really looking for the right strategic partner because, again, my main business is a completely different industry, and I really wanted to not get distracted by this business. Really, the process of finding the perfect strategic partner, and I believe that I did.
Oscar DiVeroli: What are you most proud of in terms of Engeocom Distributors?
Gordon Stula: The people, the esprit de corps in the office. I went to Zappos years ago in Los Vegas and really caught the whole gist of their vibe. If the employees are happy, productivity is up, and it’s overall great for the business.
I tried to employ that, meeting with my CEO and some of the upper executives. I believe we’ve really been successful. Not to the point of Zappos, but we have foosball games, and they’re playing. We have monitors. People are happy. My partners, [they own 00:08:50] a shopping mall, and so it’s in the offices of the shopping mall. They’re able to go down and take breaks in the mall and eat in the mall, and then come up in the office, and they’ll stay late. They’ll stay until 8:00 at night. Yeah, they’ll play, but they’ll get a lot of extra work done.
I’m very proud of the fact that when I come to work, everybody seems to be happy. Nobody’s leaving our company. We go on big retreats every year. It’s fun. We’re making money and having fun.
Oscar DiVeroli: You have created an environment of success in all of your enterprises. Assuming for the moment that you would allow me to make a material investment in your company. If I put a blank check in front of you, how much would you want, and what would you do with those funds?
Gordon Stula: Sure, that’s easy. $10 million, and we would expand. Basically, our same business model, but we’re in Azerbaijan. We’re in Kazakhstan. We’re in Ukraine. Unfortunately, Ukraine is having at this time some political challenges. Basically investing with stores into those markets, repeating the model that we have that’s successful in Russia.
Oscar DiVeroli: Today’s your lucky day. You not only have the opportunity of getting $10 million …
Gordon Stula: Thank you very much.
Oscar DiVeroli: … I’m also going to give you some magical powers for just a couple minutes, which will give you the opportunity of rolling back time back to day one of your company, and you could reverse any one decision that you’ve made. What would you change?
Gordon Stula: When the magical powers are off, can I still look like I did 20 years ago?
Oscar DiVeroli: Sure.
Gordon Stula: No, seriously. Going back 20 years, if I could change something with the business … We’ve learned a lot. I guess it would be really taking my time on leadership and just being much more careful in the quality of executives that we hire, because I think it was very challenging at that time. I think if I would have understood that paying more for the right leader and taking your time during that interview process, I think I would spend much more time doing that because subsequently when that happened, we’ve had just super results.
Oscar DiVeroli: Little bit of magical powers. By the way …
Gordon Stula: More magical powers?
Oscar DiVeroli: … if I had a little bit, I think I need it more for my looks than your looks. Having said that, instead of looking backwards now, let’s look forward. Let’s fast forward five years in time. How has the business climate changed, and how will that affect your company?
Gordon Stula: Take out the political climate, because we’ve weathered through all of that because we’re a local company. I think the business climate in Russia, they have a learning curve that’s straight up. Essentially it’s going to be more competition. More brands will be coming to market. People will become more sophisticated, meaning our competitors will become more sophisticated in terms of going head to head with us. We think that we’re quite unique in that we bring a lot of Western practices, as I said before.
I think essentially we still have a jump in terms of quality distribution and retailing over our competitors. Five years from now, I just think the scalability, we’ll just be a larger company doing those good things. Yeah, we might have more competition, but one of our brands is there for 10 years now. We’re getting a lot of good feedback from our customers, loyalty programs and things like that.
Another five years, it’s more banners that say how many years you’re there and more customer satisfaction. That’s what I see five years from now.
Oscar DiVeroli: No more magical powers for you.
Gordon Stula: Thanks.
Oscar DiVeroli: What one word describes Gordon Stula as an entrepreneur?
Gordon Stula: I would say determined.
Oscar DiVeroli: Do you think entrepreneurs are born or do you think they’re made?
Gordon Stula: Absolutely it’s in your DNA. I think you can take courses, and you can learn how to go into business, and try to figure out how to be bold and courageous and deal with all of the things that an entrepreneur has to deal with. But if it’s not part of your personality … Listen. I don’t think I’ve met any successful entrepreneur that doesn’t have a dominating personality and wasn’t a leader as a child. I think it’s something you’re born with, and then you have to apply it to a business. You could and then fail, but I think that’s the underlying factor. I think it has to be your personality trait to be successful.
Oscar DiVeroli: Fair enough. I’m not ashamed to tell you as an entrepreneur for 25-some years, I’ve woken up many of times 3:00 or 4:00 in the morning with something on my mind, worrying about something, some kind of a problem. What keeps you up at the nighttime, if anything?
Gordon Stula: Yes, certainly that. As I’ve shared with you before, melatonin is the answer. Because of all the traveling that I do, seriously, I really have to focus on the fact that I get good sleep and I try not to allow business thoughts or any type of constructive thoughts, where I start putting things together, because then, once your mind starts racing, don’t think of pink elephants, you’re up.
To battle that insomnia … I don’t have insomnia. I think I’m doing a good job at beating that back with all the time zone changes. I think what keeps me up the most is business. I start to think about something and say, no, no, no right away and cut it off. But if I get into something business-wise, then I could stay up all night.
Oscar DiVeroli: Who do you go to if you’re looking to conduct a brainstorming session, or problem solving, or just general advice or guidance? Who’s your go-to person or your go-to group?
Gordon Stula: That’s easy. There’s two things. The first one is my brother, Gregory, who I’m still business partners with in another venture, or several ventures, actually. We have that. But that can become predictable because being brothers and in business so long, we know what the other one’s going to say. But he really does complete me in a sense where he’s a different personality.
The other one that’s very strong is a group dynamic, and that’s from Entrepreneurs’ Organization, which I’ve been a member … I think I started my membership in ’97, something like that. We have a forum group that breaks out every month, and it’s like a de facto board of directors. We talk about our business with other successful entrepreneurs. There’s seven of us. We go on an annual retreat. I just get great support from them that’s just unabashed, unselfish. It’s very valuable so far in that I really look forward to those monthly meetings.
Oscar DiVeroli: Great leaders are always learning. What is your primary source for knowledge?
Gordon Stula: I read a lot of books. I read autobiographies, biographies. I recently read Joseph Kennedy’s biography, the Senior, which I thought was fascinating. Arnold Schwarzenegger’s autobiography, which was amusing. I could hear his voice come on off the pages. Anyone that’s successful and that has something to do with business and entrepreneurial keeps me glued to the pages, I would say.
Oscar DiVeroli: As a business leader, how do you make a mark in your business or even in your community?
Gordon Stula: We like to give back. I’m involved with Russian Children’s Relief Fund. My business community is in Russia, even though I’m an American that lives in South Florida. I like to give back that way.
Business-wise, I think being engaged and involved, again, with the Entrepreneurs’ Organization, we have certain programs there where we give back, where we’re judging young entrepreneurs. Recently as several years ago, we worked with the University of Miami, and we were judges for their school of entrepreneurial works out of their business school. It was very valuable, I think, for all of us.
Oscar DiVeroli: Share with us, if you would, one of the coolest experiences that you’ve ever had either personally or professionally.
Gordon Stula: Cool experience personally? Wow. There are … I don’t know. A lot of fun [inaudible 00:17:36]. I would have to say professionally, since we’re talking mostly about business.
Just recently last year, I thought it was pretty cool that one of our brands, CHI, is the sponsor for the Miss Universe contest. The Miss Universe contest in 2013 was hosted in Moscow. Therefore, as a major sponsor, we were there backstage. Our hairdressers were doing the girls’ hair. I got to meet Donald Trump, was right there with Farouk. Farouk Systems owns CHI. Met all of the girls. We sponsored different events in our mall. It was really neat to suddenly be injected completely behind the scenes and be part of the Miss Universe family. I thought that was pretty cool, yeah.
Oscar DiVeroli: What do you think the boldest move has been in your professional career?
Gordon Stula: You can’t get any bolder than leaving Smith Barney in the early ’90s and just leaving, going to Russia back then, when there were mafia guys everywhere and people said I was crazy, and doing business as a fish out of water. I didn’t speak any Russian. I think that was pretty bold.
Oscar DiVeroli: When I say the words trust and respect, what does that mean to you?
Gordon Stula: From a business point of view, because it certainly has many meanings at various levels, but from a business point of view … and I have a CEO. I have to trust him and give him the respect that he’s leading. I can mentor him in certain situations, but I need to empower him, give him enough freedom to be able to because I hired him, and trust to be able to just let him run the business on his own. I think giving that kind of trust and respect really gets the most out of the performance out of an individual that you’ve trusted with the leadership of your company.
Oscar DiVeroli: Final question, and I’m going to do my very best to make it a challenging one.
Gordon Stula: Shoot.
Oscar DiVeroli: Let’s assume for a moment that you wake up tomorrow morning and all of your existing companies go away. What will be the next venture that you go and tackle?
Gordon Stula: No problem. Not a problem at all. I’m probably going to get back into commercial real estate, probably development, anyway. That’s something that’s on my back burner. I would just basically get into that if you said that I couldn’t get into those other industries that I have some expertise in.
Oscar DiVeroli: Gordon, you have been an absolutely inspiring entrepreneur. You inspire me. You inspire many others out there that are emulating and watching what you do. I would like to thank you so much for coming to our studio today and sharing a little bit of time with us. Thank you.
Gordon Stula: [I appreciate it 00:20:30]. Thanks a lot, Oscar.