Four Generations & Counting | Scott Felsenthal

Emily: Alright. Scott's gonna join me up here. So I've known Scott for, oh, a decade. Pretty close. So Scott hails from Memphis, which is where part of my family is from.

But we actually got to know each other, I think primarily through Twitter and investing, nerding out, and small business nerding out. So tell them a little bit about your family business and the generation you represent.

Scott: Yeah. So our business is called Whitmor. We're 4th generation family owned and operated business. After listening to all you guys, I'm wondering if we're doing things, the right way, but, maybe that's part of our success as we're doing it a little differently, which I'll talk about. But, we distribute home storage and organization products to retailers.

The way I often describe it is if you go into a container store, it's representative of a lot of those types of products. Business started in New York, moved down south over the generations, were a manufacturer for 40 plus years, and then in the late 19 nineties, had to become a an importer very quickly in order to to survive, that generation. And, here in the 4th generation, it's, that hopefully the generational challenge is what we're coming out of now, and that's been the supply chain crisis that has plagued a lot of consumer goods companies. And it's been, it's been a tough period, but we're we're making it through.

Emily: Yep. So talk a little bit about your personal journey. So, to Jamie's story, like, what what was your relationship to the business growing up? And then, you know, you're you're leading the organization now as the executive. So what other you know, how how is the rest of the family involved at this stage?

Scott: Yep. When I'm asked when I started working in the business, we our everyone's response in the family is when we were born because we were exposed to it at such a young age and never pressured to feel like we had to go into it, but something we me, at least, was always very naturally curious and and wanted to learn more about. Today, I work with, my uncle as our president and chairman, and he's got a couple of kids in the business in different areas. My father retired 3 years ago. Another uncle retired 6 years ago, and we've been blessed to really be able to finance their retirements internally instead of taking on, outside capital.

So we do remain a 100 percent family owned now. Where that goes from here, we'll see. But, that's kinda where we are today. So long story short, I went off to college, law school, into the business, which is kind of the exact same path my father took. So I kinda followed his footsteps and he mentored me, up through his retirement.

And, 3 years ago is when I stepped into the the CEO role.

Emily: So when you walked into the business, you know, you're educated. You'd known the business as a family member growing up. One of the things that I talk to people about is, like, how much do you follow what the previous generation did and what they wanted? And how much are you, you know, coming in with your own ideas and, like, what are the things we're gonna do differently going forward? Can Can you talk a little bit about that tension and sort of the mentality that you all have internally around that?

Scott: Yeah. I remember coming in and quickly realizing, wow, that's gotta evolve or change. That's but the most important thing that I was told and taught, which is so true, is that you just need to go in. You need to listen. You need to ask questions.

You need to, not tell people what to do for quite a while. That's what I did. I 5, 6 years before I really started making decisions that impacted the business, and I think that's, was the right way to do it when I look back on it. It is sorry. The heart of your question was about.

Emily: So what what are the things that you like, from a pattern matching standpoint, the changes you wanted to make, and what do you want to not change?

Scott: So one huge challenge, but a really cool challenge, I think, to me and the business is we have we have several employees who have worked for the 1st generation, 2nd, 3rd, and now the 4th. And they've been with the business for 40 plus 50 years, 55 years, which is amazing. Right? But at the same time, it's kind of like the business evolves, and it's hard for that generation to to keep up. And we've had to make tough decisions over the years, but really trying to melt all the generations together and get everyone to work as one team has been a massive challenge.

But it's but it's really cool when you get to a good spot and you see the the 75 year olds working well with the 20 year olds and kinda watching that dynamic is, has been interesting. So there's a lot of forward progress we have to make, but it's taken it takes time to get everyone on the same path given those generational differences.

Emily: Yeah. From a governance standpoint, what what was the family dynamic like? You said, you know, some of the things that you heard are maybe not what you all have done. You talk a little bit about the comparison and what's worked for you?

Scott: Yeah. We so our kind of internal motto is as we grow, we wanna stay small. So and that's true when it comes to family governance as well. We have always, we don't have a formal board. It's just the family, and we just make decisions based on what's best for the business.

And, what's really worked well for us is every family member has very distinct roles, and I think that is, yeah, if I had to kinda summarize big picture what has made our company last, I think that has been a huge a huge factor in it. The 3rd generation were 3 brothers, one being my dad. They each had very distinct responsibilities within the business. The 4th generation being myself, into Cousins, very distinct roles in the business. There's weeks where we never talk.

There's weeks when we're talking every day. So we really just like to build a foundation of trust and, what I decide over my part of the business and what my uncle decides over. What he oversees, we just trust, roll with it. And if we have disagreements, we have disagreements, but we always just work through them. So nothing crazy formal, but that has worked for us, and, it's just kinda how we do it.

Emily: Yeah. Super personal, but, like, on the liquidity control reinvestment Mhmm. Growth parameter, like, do you all talk about that as a family, or is it by role and by area of the business sort of in terms of priorities? And there's a huge tension. Right?

Like, I wanna buy a house. You wanna reinvest back into the business. Right. We both work there. How are we making that decision?

Scott: Yeah. That that is one that we often come together for. Really, the younger cousins in the business, they're not haven't yet been a part of those conversations. So we've kinda let them continue to learn before they absorb kind of the the real heavy stuff. So myself and my uncle will just sit down and and decide where where investment needs to be, where we need to be reinvesting.

Our business is very inventory heavy, so all of our all of our reinvestment goes majority goes into to inventory to keep to keep, bringing it in and growing. And that's, generally the answer to that question is Yeah. We keep reinvesting in inventory.

Emily: Yeah. And it's a huge pathway to growth for you. Right? So, so in that way, like, as you think about the future now having it had now having had the business exist for as long as it has, what do you think about from you know, there's been probably periods of facing obstacles. There's been periods of pretty significant growth, and there's also periods of stewardship that, at least in my version, it's like just steward well.

Right? Like, don't rock the boat. You've got a good business. Like, what are your ambitions for your own generation, and then how do you think about what you're handing off in the future?

Scott: It's interesting because we're we like to say we're 77 years young instead of 77 years old. But at the same time, it's kinda like we're even being a 4th generation company, we we're still trying to figure out who we wanna be when we grow up. And that's a question we ask ourselves a lot. And, we do we wanna be a much bigger company, or do we wanna be a smaller company or relative same size, but a much more profitable business? And there's 2 paths there that are very different, and we bounce around there a lot in terms of what what we should do, what's the best thing to do.

But at the end of the day, what we take the most pride in is just employing 120 plus people, and just running a business and operating it well. And if we operate it well, then the growth is generally kind of taking care of itself. And that's just the mentality we take. Just operate well, do the things the right way, and, let the growth happen.

Emily: Fundamentally. Yeah. I we use metaphor internally of, like, the kingdom versus the crown. Right? So and what you're speaking to is, like, the forward thinking of the kingdom, like, build the kingdom as opposed to thinking about I am in charge, and I what do I want?

Right? And most of the owners that I speak with who are forward thinking, you know, there's such an optimism to what it can be in the future, and that plays into the stewardship role and is empowering. Whereas if people are looking backwards, right, it's much more easily said to just say, look, Like, I don't know where this is going, and and I'm exhausted, and I'm ready to be done with it. Right? Yeah.

So the continuity is very cool. So you have children.

Scott: Yep.

Emily: What's your what's your hope, ambition, and what are you trying to restrain yourself from doing in terms of their involvement?

Scott: Well, I've got a I've got 2 daughters, 14 and 11. And the 11 year old, when you ask her what she wants to be when she grows up, she says Wendy, and Wendy happens to be our front desk receptionist. So there's an interest there, I guess, to come into the business, but it's kinda the same my parents were with me. It's never yeah. Really never talking about, do you want to or having deep conversations.

They're too young for that anyways right now, but just whatever they whatever they wanna do. Yeah. You know? It's, all of our no family so a couple unique things about us. No family member can come into the business without bringing something into the business.

For me, it was a law degree because we needed, that kind of presence within the family and the business. Other cousins has been different backgrounds before jumping into the business. There's no family member that owns any ownership that's not active in the business. That's kind of a hard line we've we've drawn. That is that has been good for us because I've heard plenty of horror stories about, nonactive members that have some control, and that's that's messy.

So, yeah, that's, I hope my kids want to one day. I hope the business gets to the 5th generation, that we have an opportunity to to pass it along one more time, but we'll see.

Emily: Thank you all very much. The, main stage is gonna start here in, about 7 minutes. But since we have so many of us, we'll stand at the front here for a few minutes. And if you have individual questions you wanna ask us on your way out, please feel free. But really appreciate your all's time this afternoon.

This transcript was generated with Transistor AI