Transforming a Traditional Business into a Cleantech Firm

Transforming a Traditional Business into a Cleantech Firm

Cleantech companies needn't be made from scratch, nor must they be born as startups.

If you can easily spot trends and know how to make the most of opportunities, you can transform an old-school business into a successful cleantech firm or add a new dimension to an on-going enterprise.

That's the lesson Dan Lieberman brought to the GreenBiz Forum and traced the history of his family's businesses to share a few pointers in a "One Great Idea" presentation.

Building on What You Know and Taking Action

Today, the family-owned Lieberman Companies includes lines of business that distribute ATMs, vending machines and arcade-style amusement equipment. There's also an investment firm with a focus on cleantech.

The progenitor was founded in 1907 and originally operated penny slots in what was rural southern Minnesota, said Lieberman, co-owner of Lieberman Companies Inc. and president of Lieberman Green Investments.

That very first business morphed into a one-stop service for jukeboxes, which in turn evolved into a national rack jobbing concern whose customers included Target, K-Mart and Wal-Mart. The record business, Lieberman Enterprises, went public in 1982 and was sold eight years later.

The family also developed an interest in food service and started the Carousel Snack Bar chain, whose restaurants became fixtures in shopping malls. A single location grew to almost 300 in 40 states under the A&W name. They were sold to A&W in 1998.

Earlier the same decade, Lieberman Companies acquired a small parts distributor for amusement and vending machines. The business grew from $2 million at its acquisition in 1994 to $16 million in sales, then was sold to a private equity group in 2006, Lieberman said.

Across the decades, the family developed a pattern of using their prior ventures to inform the choices for their next move, whether it was knowledge of the record business to become a national rack jobber, or long-ago experience in penny slots to recognize the enduring popularity of high- and low-tech arcade games.

Understanding Your Environment to Succeed

The venture into cleantech investment, launched in 2006, may appear to have no immediate predecessor in the family tree of Lieberman firms. But it too built on expertise developed during the family's almost 100 years in business in Minnesota: the ability to recognize solid prospects, understanding the business culture and needs of the region, and knowing what success can look like.

Perhaps the most important tenet of investment 101 is realizing that "the weakness of most plans is 'how,' " said Lieberman. Having back-to-front experience in distribution, the investment company is very familiar about "what it takes to grow a business," he said.

The firm also recognizes needs and opportunities. The medical device business tends to dominate venture capital funding in Minnesota and there wasn't a network of angel investors for green tech, Leiberman said. So the latest family venture came to focus on investments in solar, wind, energy conservation and green building industries.

Lieberman offered four thoughts on business success for cleantech enterprises. It can be found by:

  1. Connecting people.
  2. Realizing that government can equal big business as a customer.
  3. Building on clusters by tapping into areas of expertise in a region, such as water purification and bio industry in Minnesota or auto glass in Ohio.
  4. Pursuing business the "old-fashioned" way.

"Everybody can't be Google, but they can be nice a $5 million to $10 million business," Lieberman said. "Sometimes there's an emphasis on hitting big, but singles and doubles will help grow the economy."