Risk to Reward: Scott Huntsman’s Journey in Business and the Great Outdoors

welcome to the know your ship podcast presented by ehub I’m your
host Frank Dolce of course I’m talking to the one and only the owner that’s
what we’re going to call him Scott Huntsman and if you are familiar with well
I was going to say if you’re familiar with the state of Utah but but that’s
that’s a small view the the Huntsman name is well known at least least
throughout the country probably internationally would that be fair to say
probably I mean there’s Huntsman chemical and when when I was in the NBA
program at the U we went over and toured a factory in Austria or I think it
was an Austria is that right I can’t remember probably probably yeah of
course if you’re a Utah person and and a University of Utah fan you know the
Huntsman Center and what your uncle John has meant to the university and and
all of those things and in fact your dad and his brother John correct me if
I’m getting this wrong did they kind of start together they started they did
um they did what was called Huntsman container and that’s they developed that
the kind of the clamshell that we think of as just old hat now but back in
the 70s they started with a cartons and then they took that styrofoam concept
and put it into like the big ma clam shells and so that was their first
company funny enough my uncle is a massive risk taker he he refers to himself
as a riverbat gambler and I shoot from the hip type of guy and my dad is a
very conservative sort of academic and when John went to start Huntsman
chemical he said to my dad come do this with me we just did Huntsman
container it was great um my dad said I I can’t do it it’s it’s too risky
it’s work we’re not good partners cuz I just can’t deal with the risk that
you can deal with you know and he’s putting up his home he put I think when
he as The Story Goes his when he did his first acquisition in the chemical
business I think it was a subsidiary of Arco or something that he bought for
$40 million he he um got $30 million of Bank debt he had Arco put up a
seller’s note for 9.5 million and the 500,000 of equity he put up his house
for it was 100 % leveraged with his house being at the front of it yeah I
mean who would take that kind of risk you know and my it was too much for my
dad so they didn’t do the chemical the The Chemical Company together gotcha
so I’m pretty removed from them when people say if I’m related I say you know
depends on how far back you go because I don’t consider myself part of that
family at all I mean I’m close to them I’m friends with them I respect them I
love them as my cousins but yeah um and uh uh you know if you look in the in
the old days when we had phone books if you look in the phone book you look
up huntsman’s there’s like an entire almost page of huntsman and I don’t know
a single one of them I mean there are a lot of huntsman around but yeah I
think the original James Huntsman came out with Brigham Young and 18 whatever
and he was sent to Filmore and so half of the Filmore cemetery is and the
other half is Robinson’s which is on my dad’s mother’s side so um but yeah
great name but not I um you know Jen my wife and I in our last sale we made
just a tiny little bit of money and we um the ballet is uh we’re on we met we
met on the board of the ballet my wife and I and so they’re building a West
Valley complex and we donated some money and they wanted to put our name on
it and you know my wife’s name is Jennifer and there’s a Jennifer in the and
the the Huntsman family so I’m like well then every you know why would we
ever put our a on something cuz we wouldn’t get any credit for it anyway you
know so oh anyway so is that would that be fair to say that you I mean I
don’t want to cause any family Rift and uh but is there the real Huntsman and
then the Blain Huntsman like so there’s the John Huntsman crew and the Blain
Huntsman crew there’s the royal huntsman’s um and they are almost like
royalty in the state this is true and then there’s we’re known as the other
Huntsman so for those of you who can’t see me I’m making air quotes we can see
you we we got you we’re the other okay the nameless faceless let me ask
that’s not true well it’s kind of true may maybe that’s kind of true because
you’ve done you’ve done so many amazing things not and I’m talking about like
in the business world but I happen to know you on a on a personal level as
well and I know lots of people who know you and so the Scott Huntsman stories
not just in taking a business and building it and growing it and growing
people and exiting all of those things are amazing but I think even the
personal side is more fascinating so I want to I want to ask you about this
because you mentioned your uncle John is the risk taker and and your dad is
much more conservative it feels to me like maybe you lean toward the
risk-taking like that’s built into your second child thing cuz John was the
second child I’m the second child and yeah my um I do I take pretty yeah
pretty big risk my last company well I think it’s just that I’m stupid
because my last company was in such bad shape when I bought it m that I never
would have made that acquisition and I was I put all my from my starting with
my first acquisition which is also in worse shape than I thought anytime you
buy a distressed company you can be guaranteed it’s in way worse shape than
you think it is and when I bought Martin door a prominent company well-known
name in the state of Utah been around since 1936 wow ever since sort of
probably starting with the recession back in the housing recession back in
2008 2010 you know everybody got hit all the Door manufacturers got hit in
that recession they all started to climb out in 2011 2012 Martin just
continued to go downhill the the old old man Martin David om Martin had given
the company to his kids or had had them take over and they just I don’t think
they were really equipped you know in conjunction with the recession yeah to
run the company and it was losing $3 million when I came in I I didn’t
actually acquire it I was hired by a couple of guys who had acquired it um
they had um I was brought in just as an operator and I quickly realized the
company was utterly hemorrhaging cash was going down the drain so I started
pouring my life savings into it mm pretty much after I maxed that out I would
was paying payroll out of my I was drawing on home equity loans to pay
payroll every two weeks and it was type situation especially when you have
blue collar workers you miss a payroll company’s done you can’t go to
everyone and say hey can you guys just kind of skip a payroll and kind of
work with me here yeah and so every two weeks I had to make a decision do I
let the company go or do I take another 50 grand out of my home equity line
and pay payroll how long did that last how long were you making that decision
on every two weeks so this is interesting I’ve come up with a with a little
formula might be totally inaccurate but I’ve decided that as long as a
company has taken to fall into distress it takes that long to climb out of
distress so they had been in distress for about 5 years and it took us about
5 years to finally get out of a loss position and start to break even and
actually make money so you know I don’t know if that’s true but if you look
if you look at a company that’s been doing really well and they’ve had a blip
had a little problem here or there you can usually probably get it out out of
that pretty quickly but if if they’ve been steadily going downhill for years
you’re not going to come in and just make a few changes add some capital and
change things it’s it’s just it’s it becomes part of the culture and part of
the mindset of the people yeah and it is not a quick fix and that was a
really hard lesson to to learn um but you know so that was starting in 2014
so every year we lost a little bit less lost a little bit less but I finally
had to go out I completely exhausted my resources I went I docked on 68 doors
to raise money and I got 68 no 69th door I finally found a local guy with
great vision much more Vision than I had who said yeah I I see the vision I’ll
put $7 million into this company wow while we were losing money and had been
losing money for several years wow and he said here’s what your trajectory is
going to look like he said you’re going to continue to lose money next year
and then you’re going to break even and then you’re gonna and I’m like how do
you know he could see it and he he said you know it’s just like this other
company I acquired they in the same situation I’m like that has company has
nothing to do with garage door man and yet he was exactly right I mean it was
amazing he took a huge risk he also took 70% of the company um so was but to
his credit he gave me for all the money I had put in we basically wiped out
the other two owners and he gave me credit dollar for dollar for everything I
had put in and then we went to another private Equity Firm rais another
amount of money and to his credit he agreed to take parody with the other
company oh and so once we got another lesson I learned is don’t just so my my
last company before this was also distressed and we were owned by venture
capital and they said yeah we’ll you know we’ll help you make payroll we’ll
put just just enough to get you over the hump air you when you’re doing that
you’re just continuing to starve and continuous if you’re going to put money
into a company just put it in up front and let the people have the the runway
to make it work rather than just seeping it in so to these guys credit this
so they we put about $12 million into Martin and sure enough we we started to
break Break Even he said you’re going to break even when you make 18 million
of Revenue and sure enough we got to 18 million of Revenue we started to
break even and then Co came and Co was a a a boom for us it was you know
everyone started doing home improvement projects A and B because of all the
hardships we had been through we not on purpose nothing that I did um but
because we had been so much through so much stress we were so much better
prepared for Co than our competitors for example we can’t afford domestic
steel so we would bring in cheaper steel from asah because we do really high
quality steel and to get that kind of high quality steel here in the US would
be really expensive but because the supply chain even before Co was so complicated
and took so long that we would start ordering steel eight months before we
needed it so when Co hit we had eight months of Steel sitting on our Factory
floor our competitors couldn’t get steel in the door and if you’re a garage
door company that’s making steel doors and you can’t get steel you’re going
to have some delays MH um so our competitor started you know what used to be
a six we lead time became a 12 sometimes it was half a year to get a garage
door yeah whereas Martin yeah we were always three days out but and we SLI to
maybe two four or six weeks but compared to half year so we just started
taking all this business from all of our competitors and I don’t want to say
it was a bubble but you know I could see I said I went to my board and I said
hey we’re not where we want to be yet we’re not a great company yet and and
one of my board members said you know it’s better to sell a good company in a
great Market than a great company in a good Market I’m like well right now
we’re maybe an okay company but it’s a great market and we need to sell and
so we hired a bank we spiffied oursel up and we sold right at the peak right
when we we were taking all that revenue from our competitors and we were we
had grown up we were 60 million of Revenue and 20 million of evit do so for a
manufacturer company to have a onethird iidon margin is pretty awesome and we
sold it a great multiple at a great time and then unfortunately 2023 was kind
of a dip because now people could go on vacation and go out to dinner and
they stopped doing the Home Improvement projects and all of our other
competitors got their feet back under and started taking all the business
back so the people we sold the company to were like well why are your sales
going down like well we’re still working really hard but part of that I mean
maybe may have been a little bit of a bubble maybe you guys overpaid a little
bit M unfortunately and they weren’t very happy with it so we ended up
parting ways um and then they promptly ended up selling the company um
shortly after that so Martin’s now on their one two three fourth owner wow in
two years that’s super interesting there’s so many things in that story that
I want to try to I’m going to try to get to all of those things one is it
sounds like you you took on the investor he put in 7 million he saw the
vision you must have done a great job of selling the vision of the company
and he was clearly very capable put in that money and and then you went out
private equity and it sounded like you were able to alleviate yourself of the
two other partners is that accurate it was and how how important was that for
the future growth yeah well I’ll tell you I think the way I convinced the
private Equity guy and I didn’t do this on purpose but so he’s in uh that one
that nice 111 building downtown and um and uh I said uh hey if you’re going
to put money in I need you to put it in today because I just maxed out my
home equity line and if I don’t put cash in my bank account today my payroll
check’s not going to bounce so I went to his office in person got his check
in person went back down to the street and it was like 4 4:30 by this time
and started sprinting to my bank and he apparently saw me out the window
sprinting down Main Street to deposit the check in time and he’s like oh this
guy’s telling the truth you know so he always tells that story um and in you
know I guess it convinced him that hey this is I I’m doing everything I can
and so getting rid of the two guys was it was gamechanging I mean any manager
will tell you when they’re being hampered by either capital or their their
management or whatever and sometimes people will think oh well I know better
than they do get get out of the way and maybe they don’t but in this case
yeah um getting rid of these guys and the private Equity guys they could have
just pushed us through a a a reorg or a bankruptcy and just forced them out
um but to their credit they actually they actually paid them out getting them
out of the way uh enabled us to I mean I was already pretty much running
everything and controlling everything anyway um but yeah but the employees
didn’t know who to answer to you know once that’s another thing I don’t think
I’ll ever join a company again unless I have control I I got to have control
that was that’s also a lesson in that whole experience and the difficulty of
that how important was it for you kind of mentioned this a little bit like
there may have been a culture of losing at at the company and and that’s hard
to overcome I always say that with you know athletic teams as well the
culture is the culture and there’s C you know losing is contagious winning is
contagious and you know in in Utah right now we’re probably experiencing I
was just GNA make that point yeah just gonna make that point um yeah totally
and it doesn’t you can’t just come in and give a speech and change that it
takes time that the is probably the same with a if a if a team has has had a
bad culture for three or four years it might take three or four years to
climb out of that I mean it’s different because you you turn over your
players and stuff you know but yeah it is not just a great speech or or one
win that that does it I mean it’s deeply embedded and yeah it just takes um
yeah I at least I couldn’t figure out the speech to make or the the decisions
to make it just took time and the the employees had to see us winning they
had to see us become profitable they had to see themselves getting little
bonuses and spiffs here and there um they had to see the stress level come
down you know and really believe it um you know especially the further you go
down into more of the bluecar workforce I had never worked in a bluecar
Workforce Martin it was 99% you know and it was a just a really different and
you know I just want to be clear maybe blue is a is a politically incorrect
term these days my wife gets mad at me the people I worked with were
brilliant people maybe they didn’t have a formal education but brilliant
hardworking great people I it’s funny that you mention that because I think
there is this funny connotation about saying Blue Collar but like my I would
say my family is is we’re Blue Collar like that was our background and it’s
the exact same way like neither of my grandfathers had were were not
collegiately educated but unbelievably yeah yeah This brilliant people yeah
that figured out how to make incredible lives for everybody else and so I I I
kind of push against that in fact whenever I describe I mean this is close to
our heart but whenever I describe coach winingham and the University of Utah
and it’s it’s funny to watch them this year is I always say that that’s their
ment mentality that has been the secret sauce is that it’s a blue collar pack
your lunch pail go to work mentality I don’t know why there’s a negative
connotation surrounding that because I think there’s so many valuable lessons
behind being a blue collar community so uh I’m curious one more question
about the culture side and you talked about getting small wins and people
recognizing and getting a little recognition for the job that they’re doing
did you find within the ranks that there were a few people or groups of
people that helped to tell the story through their effort or work or
communicating with others that turned that culture around over time
definitely and and part of the thing at Martin was so we had a contingent of
um of about uh probably a third of the workforce um were were um Le ocean
refugees who didn’t speak any English at all and they just had a couple of
leaders who were basically also the interpreters and everything else um and
same with I would say maybe I mean the nice thing about manufacturing is you
don’t have to speak English I mean we could get workers who were really good
workers and and smart and capable and skilled who could have gotten much
higher paining jobs somewhere else if they could have spoken English so we
were kind of Lucky MH that we were able to get this really high quality
Workforce and um and also the other interesting thing about political
refugees is to keep that status and to keep some sort of government you know
stip incoming they can’t make more than a certain amount so sometimes we
would offer people raises and they wouldn’t take them interesting so they
could keep so there were some interesting Dynamics yet there um but uh but
yeah we we there were definitely um you know uh the the leaders and then the
followers and yeah um which are critical yeah critical to have those those
the right people on the bus as everybody as everybody says you mentioned
Logistics and obviously uh with our company Logistics is something we think
about fairly regularly how early did you recognize the role that Logistics
would play in the success of the company yeah so this is an interest
interesting thing and I don’t think it applies just to garage doors but
here’s my Mantra anything that’s big heavy and cheap is always going to be
produced locally it’s never going to go offshore um you know if you compare a
garage door to an iPhone you know garage door probably costs less than an
iPhone and yet it’s 100 times the weight 100 times the size so iPhones you’re
going to make in China garage doors you’re never going to make in China in
fact fact the closer to home you can be the because Logistics is probably I’d
say anywhere between 10 and 15% of a garage door because most of them are
made in the Midwest and just getting them from the Midwest out to the West is
probably 10 to 15% of the cost so we would have a built-in advantage and if
you look at where our numbers are we’re biggest in Utah and then you know
Idaho and the surrounding states were a little less big than when you even
when you get out to California stuff and there’s more competition but it’s
because we have a kind of a built-in Advantage with the freight of being able
to build the stuff right here yeah um so yeah that was that was uh and I
think the also the ability to control our Logistics especially because we
weren’t just a point A to point B we would do milk runs all throughout the
country and um we you know we had our our our um truck Force we had sold
everybody out to to Godfree Trucking but we still they still almost were like
they were our employees all the drivers uhhuh because when you’re going on a
milk run to 25 companies and every time you take a big heavy load off and
then you have to rescure everything that’s left on the truck if you don’t
have a good driver who cares you know and then figuring out okay well I’ve
got customer a and this is his stuff and customer B and this is his stuff
customer that’s why it’s really hard to get a trucking company to do sort of
partial partial load um well unless you put it in a crate and the crate goes
to the warehouse and then but putting a garage door in a crate what’s big and
heavy is now really big and really heavy and really expensive and it just
yeah well Freight is notorious for all of the issues once you put it well
putting it getting it on the truck correctly taking it off the truck
correctly damage not on time like Freight is notorious for all of the issues
and so that that could have been potentially a huge nightmare for you guys
and yeah and and it sounds like the way that you managed is you got engaged
with a company and they really understood the importance of doing all of the
things necessary to deliver that item correctly I mean what would you do what
do you do in in the case where a garage door is damaged damaged in transit I
mean that’s a huge cost for you it’s terrible it is and they just waited six
8 12 weeks for their door now they have to wait another 6 8 12 weeks because
that steel once the Steel’s dented you can’t you can’t fix it I mean you can
pound it out but it’s never going to be perfect and um yeah it uh it was a
it’s a is still to this day it’s a huge problem in the industry well I think
that we could probably spend a whole hour more talking about Martin and the
garage door industry and I know that you’ve you were now back in the garage
door industry industry but I’m going to this is kind of like a movie yeah
we’ve gone to this point where we talked about your most recent success and
and now we’re going to go back okay we’re going to go all the way back and
figure out how you got to this this point so uh obviously grew up in Utah
right as a huntsman was that ever I I mean I I almost wanted to say burden
but was that ever something that you thought about like I’m a huntsman and
there’s all of these things that go along with being a huntsman in this state
I mean for me I’m very prickly about people thinking so every single dime I
have in the bank I have earned myself my Dad paid for some of my college
tuition and that’s it it’s the only money I’ve ever gotten for my family so a
lot of people just assume and it I am so prickly it that will set me off when
people make that assumption so I go more I bend over backwards to distance
myself from that probably more than I need to and has that shown up in your
in your life as well in your business life as well that kind of attitude like
I’m going to prove everybody I want to prove to everybody that this is not
I’m I haven’t been handed anything I’m going to and and going to accomplish
yeah I don’t know if I’ve thought of it in those terms but now that you
mention it probably I probably have a chip on my shoulder that you know I’ve
I’ve uh and people who know me I don’t think associate me with that at all I
would um yeah I uh yeah it’s probably probably one of the drivers for sure I
think people who know you and I always have this feeling is Scott Huntsman is
the most interesting guy in the world like that all of your life experience
and how you relate to people and everything you’ve been through and what
you’re willing to go through is is really fascinating and and I think that’s
the part that people may not get to know I’d like to try and get let people
understand that or get people to understand that through this so okay uh you
went to Highland High School local high school right and uh and then off to
at that point did you head off to Colombia was that a goal Columbia was it
ivy league what what did you want to do with your education just the best of
the best I mean I I don’t know I just I wanted so my dad he had one rule he
said you you can’t go to school in Utah you can go wherever you want you just
can’t go in Utah like well the education the U is a great place you can get a
good education there MH it’s like yeah but you’re not going to get you know
you’re just going to be with a bunch of Hometown people you’re not going to get
that perspective you’re going to get from bunch of people who grew up in a
different culture driven by different things and he the other thing he used
to say was even if you’re going to go into a trade or a business get a
liberal arts education because it teaches you how to think critically and how
to question assumptions and that’s the only thing I think college is is good
for it’s not really the facts you learn or I agree yeah and Columbia has this
amazing and my son is there now and probably because I you know kept I’m
always talking about this because you kept wearing the sweatshirt but they
have this uh it’s a little bit old school but they have this uh Core
Curriculum where you study first two years basically you study Plato and
Homer and Sophocles and Aristotle and all these guys most of whom at the age
of 17 when I went to college I don’t didn’t understand and I probably
wouldn’t today either but just really like every single kid in the class
could write a different essay and they could all be right or they could you
know it’s it’s just you were graded on how well you thought through things
and how well you argue the point you weren’t just given a bunch of dates and
facts that you memorized and then regurg regurgitated on a multiple choice
test or something I thought that was awesome I still to this day think about
that underpinning and sometimes I like think oh that’s why that’s that’s why
we studied Herod like I’m just getting now why you I did things 30 40 years
ago but but um yeah so that was the goal is just okay go get this this
education where you’re going to be taught to think critically and then
whatever you go into in life you’ll learn the specifics of It kind of later
and at that point did you had you determined that you wanted to be in the
business finance kind of world because you translated that into I had no idea
I had no idea I didn’t know what so these days if you want to go to Wall
Street my son’s going through this right now he’s a sophomore he’s he’s
intensely engaged in trying to get an internship for his junior year which
will translate into his final job and he’s a sophomore in the first semester
for me I didn’t even think about it till April when I was graduating in May
and I saw the Wall Street firms come and interview because we’re just up the
street from Wall Street and so they it’s convenient and Drexel Burnham was
one of the firms the Michael milin firm yeah and I went and interviewed with
no preparation no nothing and I mean back then I mean today if you haven’t
been networking and preparing for years you won’t get a Wall Street job um
but back then and and and I had no idea idea what I wanted to do until I did
that and then immediately I found my calling and you know a lot of kids you
go do those two-year investment making internships and they work you like a
raw dog and I remember specifically One Night 2 a.m. sitting at my desk and
thinking okay I could be at home in bed I could be out partying didn’t didn’t
really party at the time or I could be sitting here working on this lbo model
and I would choose option three like I’m having so much fun and if you don’t
have that kind of attitude where you love that type of thing you’re going to
hate your job and you’re going to it doesn’t matter how much money they pay
you because they pay you great money but if you’re working till between 11:
and 2: or 4:00 a.m. every night on the weekends that just gets to be too much
and will just grind you to a nub unless you just love it but you loved it
that’s what you wanted to do how so I think that’s critical because I see
regularly people who are good at what they do not but not necessarily aligned
with what they do and how important was it you for you to find that alignment
and how it oh it’s so critical you know my my daughter also went to a good
school and got a great job in New York and she hated it she hated and I said
I said well just just be patient because once you get to a certain level then
you can kind of go do something else and already at this high level and she
could have she could have this is not how the way I want to spend my life and
she left it without another job and you know so you you really have to you
know the the the money and the whatever you mean you read you read you read
about your deals in the Wall Street Journal and it’s like just heady stuff
and it’s everything about it for me was just so fun and to this day the
funnest thing about my job is now we haven’t talked about what I’m doing now
but is um buying and selling companies and structuring Deals and and taking
you know distressed companies and trying to make them better and it’s just so
much fun like when I left Martin um jumping forward again just for a second
sure and my wife’s a a a partner at a big law firm and she took a a one-year
sabatical and I was in between I had Soul Martin and we basically went and
traveled the world and I was chomping at the bit to get back to work and so
now I know everyone says oh that would be so nice I want to go sit on a beach
or I want to go to Italy and France and whatever well I just did that and I
know that I would rather be down in the trenches with this company in Idaho
trying to run this is so much fun and doing the trip and all the fancy stuff
besides the fact it cost a fortune was just not that fulfilling it’s you know
so yeah you really have to find your passion and a lot of people don’t I mean
it’s just I’m not saying that that I just feel very lucky that for me I found
something that resonated because a lot of people spend a lot of their lives
trying to figure that out maybe their whole lives absolutely you know uh
there’s a there’s I I listen to a lot of podcast and there’s uh there’s kind
of a theme about um people talking about finding your passion and it’s not
necessarily about finding your passion but finding what you’re good at doing
and then doing that over and over and over again and maybe you develop a a
passion about that but I I don’t know I feel like that’s kind of already
aligned if you’re if you’re good at do I don’t know if you’re good at doing
something maybe you’re already that’s your passion is already already there
maybe but I feel like I talked to a lot of people who are really good at
doing things but they don’t love it the passion isn’t there and then I don’t
know what kind of advice to give them because I feel like I just locked into
my thing you know and there’s you know I remember a friend of mine who is
actually I think a brother-in-law of yours whose dad was This brilliant
scientist yes um Dr stockham yes and I remember as a kid the father of
digital audio yes as a kid he would say to us so he went to MIT undergrad MIT
Masters MIT PhD and then became the head of the computer science um at the U
and and he said ever since I was a kid I had more ideas in my head that I
wanted to develop than I knew I would have time in my lifetime to do and he
knew from the time he was a little kid exactly what he wanted to do and I
always thought well that would be so awesome if you just and I think but I
think that’s rare I don’t know what advice I would give to someone who said
you know I just don’t know what I want to do like he just it’s just I I feel
like it’s a blessing that I figured that out and you know I guess you just
keep trying different things things sure but on the other hand you know I say
to my kids like well you can’t just keep bouncing around and you’re suddenly
you’re going to be 30 3540 you you haven’t developed any skills and expertise
so you’re always going to be at the kind of Bottom Ru