How To Make An Unpopular Decision

Changing your grandfather's business is a risky and unpopular move--here's how one man proved everyone wrong and followed his gut to success.

It’s not always easy to take your business in a new direction, especially when that business has been in your family for decades.

You’ll have your critics. You’ll face your naysayers. You’ll inevitably hear something along the lines of, “If it ain’t broke, don’t fix it.”

Therein lies the problem--something may not be broken today, but tomorrow is a whole other story. And it’s your job to make unpopular leadership decisions.

I had a different upbringing than a lot of people. I grew up as a third-generation member of an HVAC (heating, ventilation, and air conditioning) business in Ohio. My grandfather started the family business more than 60 years ago under the following values: integrity, family, and innovation.

That last value would become the driving force for our current success, but it’s also the reason why so many small businesses are going under today.

Out with the old

After years of working in the heating and cooling business, some questions crossed my mind: "Was it possible to build one simple website with a wide range of products to help customers maintain and improve their home and business environments? Could there be a way to simplify the buying process for consumers looking for heating and air products, while also connecting contractors with these potential customers?" Enter e-commerce.

To say e-commerce isn’t exactly accepted in the HVAC industry is an understatement. It’s seen as an unpopular move, mostly because those who have been in the space for years do not necessarily embrace technology. Even though customers love online shopping, contractors are threatened by this new approach because they don’t know how to benefit from it.

However, think about the initial pushback musicians had against iTunes. Law professionals were opposed to LegalZoom. Video stores turned their backs on Netflix. Auctioneers weren’t into eBay. Although these old-school industries didn’t like the idea of moving their companies online, many have made the switch--and it’s due to this “unpopular” decision that they are still in business today.

Predicting industry shifts

I saw this issue arising way before it became one. Even though our family business was generating sales of more than $12 million in a good year, just how sustainable are mom-and-pop businesses in the age of the Internet?

The Small Business Association notes that only one-quarter of small businesses survive 15 years or more. In addition, only 30% of family-owned businesses are successfully passed to a second generation--and it gets more difficult over time with a mere 12% transferred on to the third generation.

Like me, I’m sure you wouldn’t want that fate for your family business--you want to be in that 12%. In order to avoid the quicksand, you have to predict paradigm industry shifts that will inevitably happen.

For example, take Research in Motion (RIM), the company responsible for devices including BlackBerry and PlayBook. While RIM’s Blackberry was once the most popular smartphone device on the market, they weren’t as fast to predict industry shifts like Apple’s iPhone or Google’s Android. According to The Verge, the mobile landscape shifted dramatically with new players, new customers, and new alliances. Unfortunately, RIM made costly missteps scrambling to adjust.

While many consumers were loyal to RIM and the BlackBerry empire, something needed to be done to salvage some sort of competitive advantage. Despite the initial hesitation and the slow adjustment period, noticeable steps were taken, including licensing the BlackBerry OS to hardware partners and enabling Android app for the PlayBook. Though RIM has a long climb ahead of them, successfully pivoting to the new technology landscape is clearly better for the company--and the user--in the long-run.

In the case of my family’s HVAC business, the industry was shifting to e-commerce, connecting people with local contractors, providing variety, and offering low prices. We could have taken the RIM approach and waited until we were underwater, but I decided to jump ahead of the competition. Enter Housh, Inc.

Change is necessary, even if it doesn’t seem like it

Starting in 2006, I built Housh, Inc. during evenings and weekends. It is a diversified online distribution and retail business that is home to HVAC.com, PoolParts.com, Filtration.com, Humidifiers.com, and soon, FixtureFarm.com. By 2012, I sold the original business my grandfather started in his garage in 1954 to focus my efforts on Housh, Inc.--and this gamble has paid off handsomely.

Whereas our old school HVAC business never made more than $12 million in annual revenue, Housh, Inc. has doubled revenue annually in the past three years and expects $20 million in revenue for 2014. In 2011, our business had three employees--it now has more than 20.

Here’s the thing small business owners need to realize: We may not have seen issues for some time, so it pays to look ahead. After all, there are obviously people who do not embrace the Internet and e-commerce as a whole. Older generations in particular are used to looking up their HVAC supplier in the phonebook or checking out bulletin boards for a referral. However, consumers like these new services. Ultimately, every industry has to change to serve people the way they want to be served.

Take a look at the many on-demand cab services out there. Hailo, a smartphone application that revolutionized the experience of booking a taxi, was invented by two former cabbies in the U.K. By noticing the personalities of cab riders were shifting, Hailo has changed the user experience by providing transportation to the user wherever, whenever. Confirmation they’re onto something, Halio has even made waves for securing one of Europe's largest ever venture capital funding rounds.

While sales weren’t falling with my family's HVAC business, they likely would have at some point if we didn’t pivot to the online community. Over the next four years, e-commerce sales in the U.S. will increase at a compound annual growth rate of approximately 14%, surpassing $434.2 billion in 2017. E-commerce is undeniably the way our industry is moving, even if it’s not widely accepted.

Looking at the bigger picture

Looking at the the bigger picture can actually work out in your favor. For example, these days, consumers want feedback, testimonials, and ultimately, the best person for the job. In fact, according to a survey conducted by Dimensional Research, 90% of respondents claimed that positive online reviews influenced buying decisions. In comparison, 86% said buying decisions were influenced by negative online reviews. HVAC.com does this and more.

Here’s a great example about looking at the big picture: McGraw-Hill, a major textbook publisher, realized the shift toward digital learning. So, they partnered with Time to Know to develop a digital training platform for K-12 schools. The goal of the partnership is to bring together the best digital teaching and learning tools with leading instructional curriculum to improve both teacher effectiveness and student achievement. This has solidified McGraw-Hill as a leader in education since they saw where the market was headed.

Today, HVAC.com is a growing e-commerce powerhouse with an expanding team built upon the values my grandfather embraced. We’re still a family-owned business. We still put integrity at the forefront of our work. And we clearly use innovation to continuously improve what we do. While shifting our old school family business into the modern tech age was an unpopular pivot at first, the payoff was far greater than staying stagnant and falling behind.

What do you think? Should all family-owned businesses make some unpopular moves in order to create future success? What unpopular moves have you made?

--Will Housh is the founder and CEO of Housh, Inc. a diversified online distribution and retail business. Connect with Will and Housh, Inc. on Facebook, Twitter, and LinkedIn.

[Image: Flickr user Nicolas Nova]

Add New Comment

2 Comments

  • Fantastic article. Applicable to so many small businesses that think areas like e-commerce, digital marketing and branding are for other larger companies. Kudos to Housh for having the vision, courage and FAITH to make likely the most unpopular decision in the history of the company.