Bruce Pellegrino has never been featured in Inc or Forbes Magazine, but he has achieved more than most entrepreneurs who have been.
His first entrepreneurial endeavour was selling night crawlers to neighbours at age five. He never completed college because his landscaping business took up too much time. Everything he learned about business was through trial and error.
Pellegrino’s career took off when he built, scaled and sold a $10 million business. Most people would retire after one multi-million-dollar sale, but Pellegrino aspired for more.
After his company sold, Pellegrino grew the newly-merged entity into a 330-person, $90 million business. Under his direction as CEO, the company sold again in 2005. This time, it was to General Electric for about $180 million.
We spoke with Pellegrino about how he accomplished two multi-million-dollar sales, his feelings about higher education, and how he maintains a successful work-life balance.
Business Insider: You started with a landscaping business. Now, you've sold two multi-million-dollar companies. Were you always interested in entrepreneurship?
Bruce Pellegrino: Yes, I think so. It started when I was a kid, around five or six years old. Whether it was doing chores for neighbours or catching night crawlers and selling them for 50 cents a dozen, I was always motivated by making money.
I think it was because my parents didn't have much. They were kind of poor and I was fascinated by the fact that I could make my own money, even if it was only 50 cents.
I was going to engineering school at night in Newark, and I had a landscaping business during the day that I started with a pickup truck and a lawn mower. Little by little, I gained customers. I didn't know it at the time, but I was learning the basics of selling, marketing, accounting, and delivering a service.
It was like business school 101 without the classroom. I was learning through trial and error how to keep customers happy, how to have recurring customers, and how to price a job.
You learn from your mistakes and get better at it because survival depends on it; it becomes a necessity. When I moved out of my parents' home and had to pay rent, everything kind of smacked me in the face. I was on my own; I had to get up every morning and make stuff happen to be successful.
I built up my landscaping business, but I got tired of it. It was a tough way to make a living; the weather was a big variable and having blue-collar workers who weren't 100% dependable was problematic. So, I decided to sell the business.
I was still going to school at night but, because of the workload, I eventually stopped to focus on being an entrepreneur instead.
Do you think that was a good decision? Is school something entrepreneurs should pursue, even though you didn't?
I think it depends on the individual. In hindsight, it probably would have been better to finish business or engineering school. Had I gotten a degree, it might have been better. It would have been different, that's for sure.
I now work for General Electric with a lot of experienced, smart, well-educated people. Not having a degree is a little bit of a negative, although it's ultimately your merits that govern your success, even in large corporations. For me, back in the late 70's, early 80's, it was OK not to have a degree. But for my children, I don't think I'd allow them to drop out of college. My wife and I would probably insist that they stick with it; a degree is something they'll always have.
Someday, I hope to go back to school and finish my degree. I wouldn't do it for the piece of paper; it would be for the personal satisfaction of accomplishing it and for learning, from an academic perspective, how you're 'supposed' to do things in the business world.
I was 21 when I sold the landscaping business and I got an opportunity to interview for a sales rep job in the field that I'm still in today, 33 years later. It was interesting because, while it was a lot different than mowing lawns, a lot of the basics still applied -- sales, marketing and customer service were fundamentally the same.
I was hired to be an industrial sales rep for a company based in Boston that manufactured testing equipment. The testing equipment eventually included very small video cameras that were a quarter-of-an-inch in diameter that could be used to look inside equipment like pumps, motors, and tanks.
I was selling systems for $25,000 to $50,000. Every once in a while I would show it to a potential customer and they would say, 'Hey Bruce, I think that's great, but I can't afford a $40,000 instrument. Would you be interested in doing the work for us?' That happened several times, and eventually I realised that the marketplace didn't always want to buy the equipment. They simply wanted to rent it, much like if you fly to Chicago, you don't want to buy a car to drive around, you want to rent one for a day or two.
The company I started in 1988, VIT, filled that need in the marketplace. Through referrals and networking, we grew that business from zero to about $10 million in 1999. From 1999 on it was just leveraging that network of customers up into a bigger company.
It took eleven years to go from zero to $10 million, and then we merged with another company that was doing something similar. They were a $20 million dollar company. So in 1999 we had a $10 million business, plus a $20 million business, which made it a $30 million business. Then we built that up into a $90 million business by 2005 when GE bought it.
The growth was pretty steady and consistent from 1988 to 2005.
Growing a company requires a lot of hard work and a lot of reinvestment of money. It requires attracting and keeping good employees. It requires keeping customers happy by doing whatever is necessary. It also requires some risk-taking.
Oftentimes, you you need to do things outside of your comfort zone. For me that meant opening an office in Houston, or Chicago, or Canada. Also, merging a business with another business involves risk with the transfer of equity...things like that.
More than anything, growing a business requires a bit of luck. I was fortunate to be surrounded by really wonderful people, both as employees and friends. Some of my friends served as my board of advisors, sort of like a board of directors but not in the legal sense. Having those four or five people helped a lot; they provided a great deal of insight and fresh ideas on how to build a solid business foundation.
Expanding to France, Germany, the United Kingdom, Japan and China were also very necessary steps to scale the business from say, $30 million in 1999 to $90 million in 2005. Exporting products and selling them internationally requires a fair amount of logistical support, legal entities, accounting -- there's a lot to it. You need a good team you can trust because they're spread out around the world.
Another important element is sharing success with key people. For instance, making the guy in Germany and the guy in Japan equity partners was important. It helps to have a good, incentive-based compensation (bonus) system that rewards all employees for working hard, for working smart, and for sticking around. Good people will want to be with a growing business that is rewarding them; if they see a better opportunity elsewhere, you can't blame them for leaving.
Retaining key people and allowing them to participate in their own personal growth are really big parts of growing a small business.
If you get to a certain size, there's no question people will start knocking on your door. We got offers all the time. Once a week, someone would show up wanting to buy us. The majority of those offers are not the ones you should go with.
Instead, find a strategic investor, somebody that isn't looking to buy the business because of its ability to turn a profit. They should be a strategic acquirer who sees value in what you are doing and knows how you'll fit into their existing business.
For us to continue growing, we could only be acquired be a handful of large, industrial companies like Westinghouse, Siemens, Honeywell, or GE. General Electric was a very logical, strategic acquirer because they had an underlying need for our technology; they were building a platform to develop and scale it up.
How big was your company when it sold to General Electric and how has your business changed since the acquisition?
I was the founder of one of the businesses, VIT, that rolled up into the company GE bought. Everest was the other company. It was a Welch Allyn (the medical company) subsidiary. We merged both into Everest VIT, and that was the 330-person company General Electric bought for about $180 million.
When we sold, we had 60% of employees in the United States and others spread out, mainly in Europe. I was president and CEO when GE bought the business and its seven legal entities. I kept that president/CEO title on paper for some of them and then, over time, those got shut down or merged with other GE entities.
Since then, my job has morphed quite a bit. I'm now working in the marketing department for the same GE division that bought my business.
You ran your own companies for 20 years; now you work for a large corporation. What has that transition been like?
I'm very happy working at GE. You're right; it's a very big company. However, the business I work for is a small(ish) business within the large business. Nowadays, large companies like GE have the need to grow and they can do it with a mixture of large, established businesses, like aircraft engine manufacturing, and they can also do it with a blend of smaller, entrepreneurial businesses. The business I'm supporting right now is one of the small, high-growth businesses within GE Energy.
GE Energy is a $40 billion+ business; it's a piece of General Electric, and the part I work for is the small piece that is really entrepreneurial. They encourage the entrepreneurial spirit. They love innovation. They like people who are willing to take chances and make things happen in the marketplace. I'm really enjoying it.
I fit in fine and it's certainly different than having your own business. As with anything in life, it has pluses and minuses. Where I am in my career, I'm not excited to start something new. I'm really enjoying what I'm doing. It's very challenging, interesting, and I work with wonderful people who are intelligent, dedicated, and hardworking. Every day I find what I do fascinating and educational; that's what it's about for me, at the moment.
You seem to have the 360 degree life everyone wants - a great family and a great career. How do you balance everything?
I have a very patient and understanding wife. Thankfully, being successful brings with it the potential for a nice lifestyle. My wife and children understand the trade-off between working hard and having nice things, whether it's a house, or vacation, or whatever it is you want to do.
Everyone needs to find their own equilibrium; you need to find what that balance is. At GE, they call it the work-life balance. Every person needs to decide what that is for themselves.
For me, everything just kind of worked out. I always enjoyed what I was doing, so working was never drudgery. It was something I did on Monday morning when I got up and left the house. And my family -- I think they've been great at allowing me to do my thing.
There is a saying, 'It's better to be lucky than smart.' I think, if anything, I've been lucky in life. Lucky, in that I met a lot of wonderful people by chance, including my wife. In business, I've been fortunate to meet some really wonderful people who have helped me, and I hope I've helped them in return.
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