Ian Cassel Ian is a full-time microcap investor and founder of MicroCapClub.com and IntelligentFanatics.com to help him fine-tune his qualitative lens for finding and investing in exceptional leaders.

When Community and Business Come Together

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I recently wrote about Milton Hershey, the founder of the Hershey Chocolate Company. Not only did he create the largest chocolate company in the world, but he built the town of Hershey. In fact, 70 years after his death his trust still injects $300 million into the local community. Members can read about it here: The Greatest Example of Effective Capitalism in American History.

Milton Hershey, Hershey Chocolate Company, and the Town of Hershey, got me thinking about other great examples of community and business coming together.

Clair Global - Lititz, Pennsylvania

In my home town of Lititz, Pennsylvania there is a private company called Clair Global. They are the largest live touring production company in the world. Clair Global creates the sets, stages, and sound rigs for the largest musicians in the world including: Elton John, Lady Gaga, U2, Jay-Z, and virtually every other major artist.

Brothers, Roy and Gene Clair, founded the company in 1955 when they were kids. Their father bought them a public-address (PA) system, and they started to rent it out to bands, churches, and schools. They used the rental income to buy more equipment, and then more equipment. Their big break came when the brothers were in college and they provided sound equipment to Frankie Valli and the Four Seasons at a local show at F&M College. The band was so impressed with the sound quality that the Clair brothers were asked to travel with the band and set up the sound. Then other bands starting noticing. Fast forward to today, and Clair Global has a worldwide presence. During this time they attracted other major entertainment companies to Lititz, such as TAIT.

Clair Global partnered with TAIT to construct a $100 million facility just outside of town. The 52,000 square foot Rock Lititz Studio is the largest rehearsal space in the world. Famous artists are constantly flying in to Lancaster, PA and driving up the road to Lititz. You can go to the local pub and literally see Taylor Swift, Lady Gaga, or someone else sitting there eating after they rehearse.

Clair Global, TAIT and other top music vendors are in the process of completing the 96-acre Rock Lititz Campus to enhance collaboration between all the companies. Just a few days ago they completed the Rock Lititz Hotel, a five star hotel, where artists as well as tourists can stay and enjoy the Rock Lititz experience. Lititz is now a major music hub in the United States.

Clair Global has pumped over a hundred million dollars into a community of 10,000 people. It’s a big reason why the town of Lititz is normally ranked as a top five “coolest town” in America.

Living in such a cool town reinforces what business and community looks like when they come together in a positive way.

Missouri Star Quilt Company – Hamilton, Missouri  

Another great example is the Missouri Star Quilt Co. (H/T member Brent Beshore) and the small town of Hamilton, MO.

The rural town of Hamilton, MO has a population of 1,800. The town had been known for being the birth place of James Cash Penney Jr., the founder of J. C. Penney’s. Just like the retailer, the town was slowly decaying. The town had one traffic light, one restaurant (Subway), and not much hope. Many of the buildings on its main street were vacant, abandoned, and deteriorating.

In the early 1990’s Jenny Doan and her husband had to declare bankruptcy due to mounting medical bills from one of their children. They needed a new start with a lower cost of living.

In 1995, Jenny Doan and her family moved to Hamilton, MO.

After the move Jenny started quilting for fun. She had some patchwork done by a local machine quilter and it took over a year to finish. Spotting opportunity, Jenny’s daughter Sarah got a second mortgage on her home to buy Jenny a computerized quilter. They figured Jenny could make $40,000 per year finishing other people’s quilts.

From those humble beginnings, Jenny and her family started the Missouri Star Quilt Co. Today, the company employs 450 people, the largest employer in the town and the county. The company has purchased 15 buildings on main street and opened two restaurants, and Hamilton, MO is now known as “Quilt Town USA” with over 8,000 quilt loving tourists visiting every month. Jenny Doan’s YouTube Channel has over 500,000 subscribers. Revenues across brick and mortar and online are now $40 million annually. You can learn more about this great story here: The Disneyland of Quilting.

R Thyagarajan – Shriram Group

R Thyagarajan of Shriram Group similarly epitomizes the spirit of true giving. His willingness to give freely is born out of his sense of duty towards his fellow human being.

Consider the genesis of the Shriram Group; the group was born out of a sense of duty to the community. R Thyagarajan, due to his deep empathy, felt the pain of the small entrepreneur- the truck driver. And it is to serve this underserved and misunderstood community that Shriram Transport Finance was created. Before this entity was formed, the truck drivers suffered heavily at the hands of merciless moneylenders. Similarly was born the Shriram City Union Finance, which was formed to serve the small businessman. RT’s philosophy was that Shriram should enter only those businesses which would add value to the community.

His sense of fairness and responsibility carried to how he rewarded his employees as well. When the time came, he reduced his ownership in the business in one stroke - reducing it from around 33% to less than 3%. His belief in righteousness led him to conclude that people who participated in creating the wealth should participate in sharing it as well.

He did his giving with no fanfare or publicity; in the spiritual dictum of true giving - let the left hand not know what the right hand is giving. He has donated millions to various mathematical institutes in the country. He is a tireless advisor to many successful entrepreneurs. He has contributed immensely to musical artists so that they need only to focus on their music.

Shriram Foundation, the charity arm of the Shriram group is a partner to the group firms in furthering their commitment to the community. The foundation gives considerable focus towards education, and also skill development of marginalized communities. It has started a few schools in its core geographies and supports many other schools in infrastructure development. Members can read our case study on R Thyagarajan [HERE].  

Hank Rowan – Inductotherm Group

We highlighted Hank Rowan, the intelligent fanatic founder of privately held Inductotherm Group, in our second book: Standing on the Shoulders of Giants.

In 1992, Hank Rowan donated $100 million to the small public Glassboro State University in New Jersey. This was an unprecedent amount of money to give a large university, let alone a small one. At the time it was the largest gift to a public college in the history of public education. The school was so honored they changed their name to Rowan University. The Henry Rowan College of Engineering is now ranked 19th in the nation. It wasn’t even ranked before his gift.

Hank Rowan was proud of his gift but thought it was insignificant compared to the contributions his business made to the communities where the company operates. He said, “Inductotherm had been averaging $200 million a year in sales in New Jersey. Over the years, we’ve probably paid out $3 billion in salaries and expenditures locally. That’s worth far more to South Jersey than $100 million to the college.”

“The responsibility of anyone running a successful business is to generate jobs and wealth in the community so there are opportunities for people to work and perform. You’re creating wealth on which the community exists. We have 5,000 employees worldwide and I’m proud of that. Five thousand families are working and contributing to their economies because of the business we generate.”    -      Hank Rowan

Great businesses are loved by their Employees, Customers, Suppliers and Communities. Great leaders look to form win-win relationships with all four groups. You need all four to have an enduring business. Whether you are starting, growing, or investing in a business, focus on these four areas. The Community relationship is one that often goes overlooked, but is equal in importance.

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