Bob Loback | Working for George Lucas and Buying a $5 Million Business in a New Industry as a First-Time Entrepreneur

Bob Loback is the President and CEO of two companies: Darcoid and Crest Technology, also known as CrestTec. He is an expert in supply chain management and value-added distribution services, and he has acquired four different companies and merged them to create one larger company in the critical seal business. He has also acquired the operating assets of a semiconductor, fab sourcing, and distribution company. 

Prior to going into entrepreneurship, Bob worked for DHL for 14 years in various divisions. He holds a business degree from the California State University.

John Corcoran, host of the Smart Business Revolution Podcast, is joined by Bob Loback, President and CEO of Darcoid and CrestTec, to talk about what it takes and what it’s like to invest in a $5 million business. Bob also shares his experience working for George Lucas at Lucasfilm Ltd, how he merged four companies into one, and how working for DHL prepared him for entrepreneurship.

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Here’s a Glimpse of What You’ll Hear:

  • Why Bob Loback decided to start his own company 20 years ago
  • Bob shares what it was like to work for George Lucas at Lucasfilm Ltd. 
  • How working in different divisions at DHL helped Bob in his entrepreneurship journey
  • Why Bob decided to merge four different companies, how he managed them from a different State, and the issues he fixed after buying them
  • How Bob found financing to acquire a $5 million business and his advice to fellow business owners
  • The people Bob acknowledges for his achievements and success
  • Where to learn more about Bob Loback

Resources Mentioned:

Sponsor: Rise25

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Episode Transcript

Intro  0:10  

Welcome to the Revolution, the Smart Business Revolution podcast where we ask today’s most successful entrepreneurs to share the tools and strategies they use to build relationships and connections to grow their revenue. Now, your host for the revolution. John Corcoran.

 

John Corcoran  0:40  

All right. Welcome everyone. John Corcoran here, the host of the Smart Business Revolution podcast. And you know, each week I get to talk to really smart and interesting CEOs, founders and entrepreneurs of companies and organizations like YPO, EO, Activision Blizzard, LendingTree, OpenTable, x software and many more. I’m also the co-founder of Rise25 where we help to connect B2B business owners to their ideal prospects. And first I want to give a quick shout out to Alex Loback, who is the daughter of who I’m interviewing today. I know, Alex through EO here in San Francisco. And you know, her father, Bob Loback, of course is the president and CEO of two companies, Darcoid, and Crest Technology, also known as CrestTec. And he’s an expert in supply chain management value added distribution services. And what’s really interesting is he acquired four different companies and merged them to create one larger company in the critical seal business. And he’s also acquired operating assets of a semiconductor, fab sourcing and distribution company, as well. And it’s been about a 20 year journey of entrepreneurship and also a family owned business. So we’re going to ask him about that as well and some of his strategies for sales because he’s very good at sales. But first before we get into that, this interview In this episode is brought to you by Rise25 Media. Rise25 helps b2b businesses to get clients, referrals and strategic partnerships with done for you podcasts and content marketing. And if you’re listening to this podcast and thinking like should I start a podcast? I’ve been saying yes, for 10 years, it’s one of the best things I’ve ever done. And if you want to learn more, you can go to Rise25Media.com where we specialize in helping b2b businesses with high client lifetime value, you can also email us at [email protected]

 

All right, Bob. So I’m excited to talk to you about your entrepreneurial journey here. And you know, I think what’s interesting about you is that you’d worked in the corporate world for a long time working for DHL and, and other companies. And then about 20 years ago, around the year 2000. You decided to start your own company. So how did that come about? Because that’s, that’s a big undertaking, of course.

 

Bob Loback  2:56  

Oh, that was John. That was sheer luck. I mean, that was verbalizing my dreams. I am talking to people. So you know, I knew at DHL that every year they’d have an annual review structured organization. I started theirs when I was 32. And every year I’d say, Don’t worry about me. I’m eventually going to own my own business. And so what do you want to do? And I said, Give me something challenging, give me something I can sink my teeth in, that I can learn from. So I ended up going from spot to spot the spot and I ended up being the guy that started stuff. You know, they needed an industrial engineering group, they needed a value improvement group, they needed an import export group, they needed a gateway group, they needed a logistics supply chain group. I was the guy that started it also. So I moved on to something and then what I realized, you know, I come from Arthur Andersen and accounting degree

 

John Corcoran  3:56  

is gonna say you have an accounting degree, right?

 

Bob Loback  4:00  

I used to study financial I used to study financial systems

 

John Corcoran  4:04  

in DC. So that must have been helpful because you seem like a very personal guy to you. I would never have guessed you as come from an accounting background. You seem like

 

Bob Loback  4:13  

I wanted to be an accountant. And what I figured out is I’m really a salesman. So I moved out of Arthur Andersen and went to work for Lucasfilm. It studied George Lucas Films, financial systems.

 

John Corcoran  4:28  

Now this is in the early 80s. You’re working

 

Bob Loback  4:31  

at Lucasfilm early 80s. I was an Industrial Light magic in San Rafael and Sandra fell on

 

John Corcoran  4:37  

Cameron county where we both live Okay. What was it like working for George Lucas back then? That must have been a small operation back then.

 

Bob Loback  4:44  

Yeah, it’s very small. For me it was an unbelievable experience. But it was an awakening. They were my clients. They hired me to do an accounting review of their accounting systems. They’re just starting to make a ton of money and they needed structure. So I did that. And then they approached me after about a year saying, Would you be involved in a corporate competition like what do you mean? Then I go well, the general manager of Industrial Light and Magic Tom Smith wants to retire. And so we want to create a corporate Thunder Thunderdome. We want to put two men in one man out and we want a person with a corporate and business background and we want a person with an artistic background and we’re going to put them in the Thunderdome. We’re gonna do a three month evaluation of the two in the winner is going to be the heir apparent to Tom Smith as the general manager of an Iowa

 

John Corcoran  5:46  

how cutter I’ve never heard of that before. Oh,

 

Bob Loback  5:49  

it’s totally cutthroat. I go up. Hey, I’m in I’m, you know, whatever, whatever it takes. What a great opportunity. I love this company. And this is an opportunity and chance of a lifetime. So I jumped in first day I get called into Tom Smith’s office, George Lucas, Steven Spielberg, in my car in my competitor in the room, and they’re talking about a movie that they want to do Spielberg wants to do, and he’s just dialoguing with

 

Unknown Speaker  6:19  

the Raiders of the Lost Ark.

 

Bob Loback  6:21  

No, no, no. Okay. I can’t disclose it. I don’t remember. I think I think it was Dune or something. Okay, okay. All right. And

 

Tom Smith after the meeting, we didn’t say much of anything. We’re just taking notes. Warren Franklin and I were taking notes. He was my counterpart, the competition, okay, and wasn’t Warren’s great guy from the artistic side. Tom Smith turns and says, Oh, you guys are dismissed. Go Go come up with a budget for the special effects view of Stephens idea. And I walked away and I liked it. Shit, I have no idea. But anyway, so I had to learn it was a quick, quick learning thing we were. It was awesome. The creative talent at that organization is incredible. I met some great guys. But as a business person, what I realized is that they hate business. They love artistic people. But this is back in 1982. Yeah. So you know, I don’t know the organization since then. Yeah. But I lost. All right, Warren got the job three months, or three months in it you’ve worn didn’t have a job for very long. By the way.

 

John Corcoran  7:36  

What did you learn in that time working from George Lucas working for George Lucas?

 

Bob Loback  7:41  

Well, I learned, I learned that there is a tremendous amount of artistic talent. I learned that you as a business person have to know how to add value, and how to coexist with those folks. And I learned that, you know, the entertainment industry is not for me. I have to tell you, I think it’s a lot of people I like to mentor people, a lot of people think you always have to find the right thing. It’s just as important to find what is not your sweet spot. It’s really important to fail. Alright? failing isn’t a major portion of your journey. Okay? Because most people think you need to know like that. I’m one of these guys that has to learn, and has to experience. And that’s why I go from thing to thing. That’s why I went from thing to thing to thing. Because I just look at them as a learning experience. And what you take from your failures is, is I think, more important than what you take from your successes.

 

John Corcoran  8:47  

I couldn’t agree more and you say you landed at DHL and you had 15 years at DHL, so obviously it was a good fit. And did jumping from division to Division Two that taught you about entrepreneurship. And did that prepare you in a way for starting?

 

Bob Loback  9:02  

It did. You know I had an accounting background, I started as internal audit director. So I did a bunch of auditing. I found fraud and was in a division and the president ended up firing everybody in the division and he put me in charge. I remember, he came down for breakfast, he said, Okay, a little back, you found all these problems, I got rid of all these guys, you now own it until I get a replacement. It took them about three or four months to get a replacement I lived in. This is the very first year of my marriage to my wife, married for 30 3038 years. And I remember, you know, just Okay, I got to hold this thing together. And, and that’s when I realized, I don’t want to be an accountant anymore. You know, I’d like to be a general General Manager of some sort. I got a promotion and a regional controller and then of the western region and in Mexico. And then they offered me the job as a regional operations director. And so that’s when I made my job. jump from finance into general management.

 

John Corcoran  10:16  

And when did you get into sales? Did you have sales roles? And then any point there was later,

 

Bob Loback  10:22  

you know, it’s really weird. I’ve always been a b2b guy. I love to spoil clients.

 

John Corcoran  10:33  

It must be hard for you right now, because we’re recording this in the middle of July 2020. You get the pandemics been happening for a while?

 

Bob Loback  10:41  

Yeah, it’s hard but you know, I sell seals, we design and sell seals to manufacturing companies. And guess what? their factories you know, and anyway, so I jumped into that and I jumped into Darcoid and you know, it’s been an amazing journey.

 

John Corcoran  11:04  

How did you end up merging four different companies as the way of starting your business?

 

Bob Loback  11:10  

Yeah, well, first of all, I wanted to start a business, but I couldn’t figure out what to start. Okay. And I think that’s true of a lot of a lot of people. You know, they want to be their own boss, they want to do their own thing. They think they got to create the world. But what I was struggling with that, you know, I’d been in an internet startup I’d been in, in a life science research company, where we tested drugs on people, HIV positive people. And so I was finding I was trying to find something that would connect with me. And I wasn’t finding it, you know, in the.com, in 1990, it became the dot bomb. I went through that with an Internet startup. And I was just lucky. So I started talking to somebody I was saying, I want to own a business. And I remember a guy saying, I know a guy who has a business that wants to sell his business. He doesn’t have any family. He hasn’t done any succession planning. And I think he’d get along with you. And I said, Hey, if you know him, please introduce me. Because if he’s a class member, if he’s a client of yours, I want to meet him. And so and that’s how I connected and I connected with the owners of Darcoid. I worked out a buy sell agreement. We shared an office for eight years, l L. Armstrong and I shared an office for eight years. I

 

John Corcoran  12:40  

stuck around for eight years after you acquired the business. So he just didn’t want to own it anymore. He’s just tired or something.

 

Bob Loback  12:47  

He knew it was time. He was, you know, 78 years old. He knew he and he and Frank. You know, they owned it. Frank was the finance guy. I was the operating guy. They knew it was time out. You know, it’s interesting. thing you know, guys in their late 70s and 80s they start getting rid of stuff, you know, you spend your life acquiring stuff, and then and then they spend their last, whatever, getting rid of it all. And so they knew they wanted to turn it over to somebody. I was lucky enough to be introduced to them. We connected, we shared an office, there were no secrets, no secrets whatsoever. He taught me the business. I learned it on my own. And and then that’s

 

John Corcoran  13:30  

how I knew nothing about the seal business when you okay, I didn’t even

 

Bob Loback  13:33  

know I had no

 

John Corcoran  13:34  

idea what a seal was. And you somehow purchased Darcoid, but you also purchased three other businesses that you rolled into Darcoid.

 

Bob Loback  13:42  

Yep. And then I just started verbalizing once again, I wanted to be a Parker distributor. So I started talking to people about I called up the one of the Pirker regional managers, you know, and I said, introduced myself when I’d said if I’d like to be a tarkir distributor, if you have a need for a new distributor, or if you have a distributor that is not doing well, I would like to meet that person because maybe they would want to sell. And he said, I’ll get back to him. And that’s how I found NorCal seal, which was the oldest distributor partner seal distributor, you know, in North America, you know, and then the same thing with the semiconductor I told somebody I was verbalizing that I want to be in the semiconductor fab world. This was back in 2009. And some guy goes, Hey, I know a fab company down in Austin that, you know, there’s a really great guy that’s looking for a new partner. I said, Hey, I’d like to meet him. You know, and it was it’s, it’s for me, it’s always been verbalizing your your your dream what you want in networking. How

 

John Corcoran  15:00  

Was it to acquire businesses in Austin, but you’re in the Bay Area? how did you manage to oversee that business from a distance? And, and how is it culturally bringing the businesses together?

 

Bob Loback  15:13  

It’s not easy. I mean, it was a total turnaround situation. It was a very small business. Now remember, I’m a small business person, I got 60 employees. And what I’m trying to do is create what’s called a small giant, right? You don’t have to be big. You just have to be really good. Right. And, and I am technically focused, you know, I believe in focus, but anyway, so bringing in that culture was not difficult. What was difficult was that I bought it. It was at the bottom, it was dying. I bought it and I had to turn it around. And this is where my daughter Alex, and my wife Becky got involved. They were instrumental. We would fly down to Austin. We will live in Austin for a while. We would work out things we would like to put money in. But more importantly, we put in blood sweat and tears, because that’s what it took. And you had to regain the respect of the suppliers. The people in the customers will know that takes time. What?

 

John Corcoran  16:21  

What were a few of the things that you found that needed fixing when you took over the business?

 

Bob Loback  16:27  

Well, I think I think the biggest thing is that this is where my financial background really kicked in. I mean, the place was, you know, had a lot of financial problems. And so you had to put in, you know, what are the costs, what are the revenue, what are the things that drive financial success? What are you know, ethics, ethics, it was a very ethical organization, but they were like, once they got money, they, you know, they spent it on something else, and it’s You have to have discipline, you have to have financial discipline. So we started putting that. And then the other thing is ethics, your word, if you tell somebody, you’re going to do something, that’s your word, your reputation as a business owner, it’s your reputation. And so you have to deliver on that on your word, you have to make good on your word. As you start to build trust, trust is earned as you earn the trust of big companies, organizations that are important to you. In our case, in CrestTec, it was manufacturing partners. If I can earn the respect and trust of manufacturing partners, then they will start giving us terms we didn’t have terms. We were prepaid; we’d have to pay cash before we would get them to make a part. And so then they started giving us credit in terms because our word was good, because it helps with cash flow. Yeah, and then you can start turning . It’s a long journey. It took three years. But we have great people at CrestTec. Don’t get me wrong, we kept the good people. And we’ve now built it into a really successful small business. That’s great. And now, it says in your bio that you took Darcoid from 5 million in revenue to 30 million. So when you first acquired Darcoid was at 5 million, yeah, it was 5 million prestack was about a million.

 

John Corcoran  18:32  

How did you feel on the heels of the.com meltdown? On the heels of having worked for a DOD bomb? How did you put together financing to acquire a $5 million business having never run your own business before?

 

Bob Loback  18:49  

I financed it on my own? You know, I just I. I’ve never taken money from anybody. You know, and I am pretty conservative. I don’t like to borrow money. So

 

John Corcoran  19:03  

did you work out a deal with the owner that you’re gonna pay him out over time? Is that what I did?

 

Bob Loback  19:07  

I did it. Darcoid, I did in and out. Okay. It took me eight years to pay him off. I paid him interest. I paid him a fair interest rate. I paid them every quarter. In CrestTec, I paid cash because CrestTec was 10 years after Darcoid and I’d actually accumulated enough cash to actually pay cash.

 

John Corcoran  19:33  

And, and so you put in a lot on the line there to buy a $5 million business as your first purchase as your first entrepreneurial venture. Never having run a business for never having been in the industry before was going

 

Bob Loback  19:49 

I didn’t put it all on. You know I negotiated it so that I would not lose everything. You know, Becky, and I didn’t want you . We’ve been working now. We’ve been working for 20 to 25 years on the home and had daughters, all that stuff.

 

We didn’t want to lose it all. Because we didn’t know anything about this business. Right? Yeah. Right.

 

John Corcoran  20:14  

Yeah. And what did your wife say? What did Becky say when you decided to do this? She’s supportive or she

 

Bob Loback  20:21  

so she, she. She said, okay, honey.

 

There’s a book out there called Honey, I wanna own a business. anybody, anybody that wants to start a business should read it. I know. It’s like 20 years old. It’s a phenomenal business, because it talks about the partnership journey, the partnership journey, and she had had a friend who lost everything, because her husband had started multiple businesses to sign personal guarantees, they lost everything. And so she said to me, okay, You know, so I read the book I said, read this book, honey. First of all, I made her read it because I had already read it. She came back to me and said, I have only one condition. I go, what’s that? She goes, no personal guarantees, smart lady. And I said, Okay, I can live with that. With that. So I looked at it from a risk management standpoint, I said, Let’s, let’s go on this journey. But let’s not put everything in red. That’s not the rule. Let’s not put everything on one number because as a business person, I think the best practice I can advise somebody is to run your business with a healthy dose of paranoia. Always anticipate a little bit, always anticipate the worst that can hurt you because the worst or what is what will burn you. The good the upside? Is icing on the cake. Don’t think about the upside. Now, I’m not saying being a negative person. So I thought about what could burn me. And so I put, I put, you know, I put safety nets in place. I made sure. I didn’t personally guarantee anything. I made sure it wasn’t always my cash. I made sure that I was disciplined and in cost control. I made sure the terms cash flow terms worked, things like that. All right. And I’ve got to be frugal.

 

John Corcoran  22:29  

Mm hmm. That’s great. Well, I know we’re running short on time, the time flew by Bob. So thank you for taking the time to talk with us. But I want to wrap things up with a question I was asked, which is let’s pretend we’re at an awards banquet, much like the Oscars or the Emmys and you’re receiving an award for lifetime achievement for everything you’ve done up until this point. Who do you think and Asian family friends who are the people that you would acknowledge?

 

Bob Loback  22:52  

First of all, I think my mother, I mean, I was raised by an amazing woman. All right. I had a great dad. All right. But you know, my mom was an amazing individual, you know, you know, obviously my wife is phenomenal. I like to talk about how I married up. So I’m married to somebody, like, way smarter than me. And, you know, and so my wife, and then I add, you know, I had a teacher in high school that really impacted me. I mean, and then I’ve had mentors. I’ve had a guy that I worked for DHL for nine years, a guy named Steve Waller, who’s still a good friend of mine, he taught me so much. All right, so, you know, I think it’s important men need men. Men need mentors. Men need men. And it’s it and I think it’s forgotten a little bit. You know, I’m not an anti woman person, but, but guys need to learn from other guys and I’ve had some great, I’ve had some great mentors, plus an awesome wife and mother.

 

John Corcoran  23:57  

Grade. So Darcoid and crystek are the Good companies, where can people go to learn more about you Bob?

 

Bob Loback  24:03  

You know, our websites, you know darcoid.com cresttec.com. I mean, we’re, you know, we’re a business to business organizations, so we’re not a b2c and so we haven’t spent all this money, you know, developing these websites that are phenomenal. But, you know, you go there and contact us. Okay. All right, the best place. Okay. Thanks so much. Thank you, John. Take care. 

 

Outro  24:29  

Thank you for listening to the Smart Business Revolution podcast with John Corcoran. Find out more at smartbusinessrevolution.com. And while you’re there, sign up for our email list and join the Revolution Revolution, Revolution Revolution. And be listening for the next episode of the Smart Business Revolution podcast.