It was a rainy night in Texas when Jason LaValley came up with the invention that's created a new industry in Bemidji.
A massive pipe crushed the ankle of one of the men on his pipeline crew, and he figured there had to be a better way. He went back to his hotel and sketched an idea.
A few years later, LaValley Industries is looking to double its 2013 revenue of $5 million, and just signed deals with the pipeline division of Stanley Black and Decker and with Vermeer to distribute the Deckhand.
LaValley answered a few questions by phone from the company's headquarters in Bemidji.
Q: Can you describe your product?
A: It's an attachment for an excavator or a trackhoe. If you were to take the bucket off, we would attach our Deckhand to the end of the boom. I was working in the directional drilling industry, and I kept asking myself why are we using these slings and cables to handle this pipe from point A to point B? Why can't we take that bucket off and put on an attachment to handle pipe? The pipe and everything's coated, so you've got to protect it and handle it with a little finesse, but we've accomplished that.
Q: Can you tell me more about the day you came up with the Deckhand?
A: It was in Corsicana, Texas, it was slippery, it was muddy. It was the first time that it had happened to a member on my crew where someone was seriously injured and it changed their lifestyle. They were going to be hurt for the rest of their life. That was in 2005.
Q: Where did things go from there?
A: I faxed the design to my father, and asked him if he would be interested in building one of those attachments. We agreed to build the attachment in my garage and start a business together, and we actually hired my grandfather, so I had my father and my grandfather working together in the garage on nights and weekends. In 2007, I completed the prototype, and was able to rent the equipment to a company that I'd been working for at the time. We shipped it down to Fort Lauderdale, Fla., where we were working. I had spent my life savings on this attachment. I borrowed money from family members to get it there. And lo and behold, the damn thing worked.
Q: Once you saw that it worked, how did you get to production?
A: Conceptually it worked, but it really wasn't robust enough to handle the capacity of the large excavator I attached it to. So as I rented it to (Brownsville, Wis.-based) Michels Corp., the foreman from the site would call me and say they pulled a tractor out of a ditch or moved a steel plate with it and it broke. Really I designed it for handling pipe and it wasn't engineered for the specifications of that excavator's capacity. I had to go seek out engineering, create a business and find a way to fund getting this thing designed. At that point I was led to meet Jorge Prince, who is my partner now, who was working at the Small Business Development Center up here in Bemidji. He helped me build my business plan for developing what's now LaValley Industries. In the spring of 2008, I decided with my wife that we would go all in. I resigned my position at Michels Corp.
Q: How did you get financing?
A: At first I couldn't get financing from anybody. The bankers in town suggested my business plan really didn't follow suit and maybe I'd be better off seeking a professional to help me out. I was starting to get nervous that I wouldn't be able to get a loan even though I had a protoÂtype product that worked. After I met with Jorge, I went from a five-page business plan to a 30-page business plan, and went back out and met with some banks. This was 2008, not the best time to start a business. I did find a local bank called Security Bank USA that went out on a limb and gave me an SBA loan, along with the Northwest Minnesota Foundation, which made an economic development loan. It was $260,000, and it paid for engineering and the first preproduction prototype of the engineered model, and some shop space.
Q: How did you find your first customers?
A: I was fortunate enough to find a few businesses that still had work and were willing to take a chance on our new product. It's built by a pipeliner for the pipeline industry, so I had a certain level of respect from those groups. I was able to get by, onesy-twosy on these machines just to keep the doors open. I remember being three, four house payments behind. We were making risky moves, by building three prototypes instead of one, which is insane, because you're taking a risk on something that hasn't been really proven. But I knew if I didn't take the risk and bank on it being right, that one machine taking three months to get built and delivered at a time wouldn't pay the bills. We signed an exclusive agreement with Pipeline Machinery International in 2009 for handling this line pipe. They weren't really interested in directional drilling, but we didn't care, because they bought 24 machines up front. That was a big bold move by them. Looking back I don't think any of us would ever say we'd turn that deal down, but as we grew, we started developing larger attachments and smaller ones for different sizes of excavators, and with that we'd get opportunities from different industries. As we were growing, the exclusive agreement kept us from expanding.
Q: What does the new deal with CRC-Evans, a division of Stanley Black and Decker, mean?
A: It's exclusive for a field of use — pipeline. They're only interested in distributing our attachments to pipeline customers. Now we just recently signed a long-term contract with Vermeer in directional drilling. What we've done is created another field of use market. In 2008 I had two employees — myself and my father. Now we have 30.
Q: What other industries can you get into?
A: Right now we're working with a company in California for setting 95-foot telephone poles. We developed a prototype for them, they're currently using helicopters to set these poles. That's a game changer. A whole new industry. LaValley Industries as a whole now, is much more diversified and we're able to work with some big companies.
Adam Belz • 612-673-4405 Twitter: @adambelz
