Brand Building
ONE MAN BRAND
They say lightning never strikes twice. Th ey’re right. Fort Lauderdale-based entrepreneur Wayne Huizenga is proof that it comes in threes. Huizenga is the only person to have built three Fortune 1,000 companies virtually from scratch and the only person to have owned three professional sports teams at one time.
words by > Christian Sylt
But what makes Huizenga so special is that he has used the same formula to build up businesses in drastically diff erent sectors. And despite being 68 years old with several billion dollars in the bank, he’s not stopping. Welcome to Wayne’s world.
Garbage runs in Huizenga’s family, and it’s something for which he can be extremely proud. Wayne’s grandfather, Harm Huizenga, was a Dutch immigrant who started his own waste hauling fi rm in Chicago in 1894. Sixty-eight years later, Wayne continued the family tradition. Aft er dropping out of college in Florida, he bought a single trash truck with his eye on the bigger picture—the scores of accounts that came with it.
It took Huizenga less than 10 years to transform his single truck into Waste Management—the largest waste collection company in the country. Waste Management went public in 1971, and a decade later it had become the world’s largest company in its fi eld.
“I don’t think there’s any secret to building a national brand. It’s hard work,” says Huizenga. “We’ve always had a saying that we know that we’re no smarter than our competition, so if we want to accomplish twice as much, we have to work twice as hard.” Nevertheless, Huizenga’s formula for creating colossal companies follows a few core principles.
First, he tends to buy into companies that already exist, albeit on a small scale. Huizenga says he prefers this to establishing businesses from the ground up. “If you simply have an idea, it can take a long time to get that working. You’re continually fi ghting to get people to buy into the concept.”
Th e next pillar of Huizenga’s process is identifying an industry that isn’t meeting customer needs. In particular, he specializes in service industries in order to get greater returns. His logic for this is simple. “If you’re in manufacturing, you have to build a big plant. Th en, you have to contend with constant changes in demand. Service has ebbs and fl ows of demand too, but not as much. If Waste Management signed up your restaurant as a customer, as long as we were there every day on time, there was no reason to change.”
But the cornerstone of Huizenga’s approach is his focus on investing in businesses with rental income. Th e key benefi t of this is recurring revenue. No one is going to run out of garbage any time soon, and Huizenga’s approach was to rent out trash containers to customers, which Waste Management then picked up and emptied.
But the benefi ts of rental businesses run deeper. Th ey also avoid costs associated with replacing inventory. “Th e rental business has less moving parts,” says Huizenga. “If you are in the retail business and, for example, you sell a shirt, not only do you have to replace that shirt, you have to determine what size shirt it was, what color shirt it was, whether it was long or short sleeved, and so forth.”
But the part of Huizenga’s plan that is perhaps toughest to emulate is the staggering speed of growth. During one nine-month period in the early 1970s, Waste Management bought 133 companies. “It was just easier, faster and cheaper to go in and buy out a guy who was already established in a market, even if he was very small,” says Huizenga.
This aggressive expansion strategy came into its own when Huizenga headed up Blockbuster—the company moved quickly so that it could tie up the top locations long before rivals could get there. “You don’t want a competitor to take the best location,” says Huizenga. “We averaged for seven years opening a new store every 17 hours.” Copying this approach takes much more than just throwing cash around.
Huizenga’s schedule is grueling. At Waste Management he would wake at 2am and run a truck route until noon before soliciting new business in the aft ernoon. Even now, Huizenga still starts work just aft er 8am. “We work all day in a city, and then when everybody else is eating dinner, we get on a plane and fl y to the next place. When you’re in business, every hour counts.”
Huizenga takes trusted staff to heart. In 1984, he spent $18 million on a 35% stake in Blockbuster—a 19-store fi rm with $7 million in revenue. However, he didn’t even own a VCR. “You don’t have to know anything about the business,” he says. “Leadership is the key.” Blockbuster grew into a company with over 3,700 stores in 11 countries by the time he sold it to Viacom in 1994 for $8.4 billion.
Huizenga says he looks for three key qualities in management: work ethic, personality and, most importantly, leadership skills. Veteran staff is repeatedly hired to work on new ventures. Blockbuster stalwart Steve Berrard still works with Huizenga today, and George Johnson, a Blockbuster franchisee and later president of Blockbuster Video, became a partner in Extended Stay America.
Extended Stay was vintage Huizenga. It operated in an underserved sector providing a no-frills service for people who needed to stay more than a few nights at a hotel. Rooms came with a complete kitchen, but properties had minimal lobby space, and sheets were only changed twice a week. In its fi rst year, it opened 62 locations; when it was sold in 2004, Extended Stay had almost 500 hotels in 42 states.
AutoNation, the fi rst nationwide auto dealer, was a similar story. Huizenga developed a one-price strategy, hired management with the expertise to run the company, and grew it into the largest auto dealership in the nation, with more than 400 franchises in 24 states. With haggling commonplace in the industry, Huizenga’s goal was to create a one-price company, and it became one, with revenues of $20 billion.
AutoNation is now capitalized at $4 billion, but Huizenga stepped down as chairman in 2002 to start from scratch once again. “I spent more than 35 years on boards and decided that I didn’t want to do that anymore,” he says. But his hobbies ensure that work is never far away.
In the early 1990s, he bought into the NFL’s Miami Dolphins. But aft er being dismayed that the team’s stadium was only being used eight times a year, he invested in the Florida Marlins too. Th e new baseball team fi lled the stadium another 81 times, and Huizenga was so smitten that he later picked up the Panthers hockey team.
Aside from the tight regulatory control, Huizenga says that running sports teams still comes down to the same principles as running blue chip businesses. “You have to hire the right people: the right coaching staff , the right players and those people who hire the right coaches,” he explains.
Th e Dolphins are the only sports team left in his company, Huizenga Holdings, which also invests in real estate and has 12 hotels under construction in Florida. It also owns Charlotte-based Swisher, which perfectly fi ts the Huizenga mold. “If you go into a bathroom in any business or restaurant, there are toilet paper holders, towel holders, air fresheners, soap dispensers—we install and rent those, and once a week, we come and service them,” he says.
With Swisher already operating in 42 states and 15 foreign countries, Huizenga’s fourth lightning strike may not be far off .