 The Business in Hawaii with Reg Baker. We're a show that broadcasts every Thursday from 2 to 2.30 in the downtown studios of Think Tech, Hawaii, and the Pioneer Plaza. We've got beautiful weather this week, as compared to last week, when it was very foggy and nasty out, but it got all blown away and it's a beautiful downtown Hololulu weather right now. We're a show that focuses on successful stories of businesses and their owners here in Hawaii. We all know that there are challenges, but there are a number of people who have figured out how to make it work, gotten around those challenges, and have successful companies. We have two of those individuals here today, husband and wife team, Jerry and Sharon Griffin. They are the owners of Windows Discount and Doors, based in Kaniyoi, but they work around the islands. And I just wanted to say welcome to Sharon and to Jerry. I'm glad you can make it on the show today. Nice to be here, Rich. Thank you. Now, Jerry, you've been in town for quite a while. Can you give us a quick little bio on how you got here and how you got into what you're doing? Yeah, absolutely. It actually goes back quite a way to the U.K., Rich. I got in the window business in England. I was about 24 years old. My father was running a large window company there, and I worked with him for a while before I moved over to the States in 1983. I actually followed my dream to become a commercial airline pilot, which I did for about 20 years or so. Eventually moved to New Zealand after that. I had a business I sold, technically retired to New Zealand in 1997. And then basically missed America, so I had two young girls at the time, so we wanted to come back over here. So we thought Hawaii would be a great place. We used to visit here from Arizona pretty much every year for about 10 years. That's how we settled in Hawaii in about 2000, 2001. So that was around 2001, so that's almost 15 years ago. Absolutely. And so you came back and set up shop here in Hawaii. Did you jump right into the business, or did you do something before that? Actually, no. It was kind of interesting what happened. It didn't go along with my plan. My plan was to join an airline, so I applied at Hawaiian and Aloha. Pretty much got accepted with Aloha Airlines, and then they probably want bankrupt, so that kind of left me high and dry, literally. The only two things I really knew, I was an aircraft engineer, I was an aircraft pilot, and I'd sold windows for a number of years in the United Kingdom. One of the things I noticed when I first got off the boat here is the amount of jealousies in Hawaii, and the poor condition, the corrosion, the obviously burglaries are fairly common because of it, and even when I first landed here, I thought, wow, it could be potential for a window industry here, and kind of odd-jobbed around for a few years, didn't really know what, because I really want to follow my dream of being a pilot again, but there really weren't that many options at the time, because the airline industry was actually going on a spiral down once. So I actually, through a friend of a friend, started working for another window company, about 2001, 2002, did that for a little year, about a year or two, that sort of got me used to importing into Hawaii, learning more about the climate, the sort of windows that work and the sort of windows that don't work in Hawaii. And then after a couple of years of doing that, I started my own company in 2005, just initially as a sole trader, more of as a sort of consultant than anything else, and then actually officially started Discount Windows and Doors in 2007, spring 2002. So you pretty much started this from scratch then, right? Yeah, I had $500 my bank account at the time, true story, and I was in an 8x6 bedroom, that's all I had, and I had a laptop. And I had contacts, I've been in the industry long enough, I knew a couple of good suppliers, a couple of which have become very good friends of me, but one of them extended me a 30 day credit, which with my $500, I remember our very first ad, it was about an inch square ad in the local free paper, seriously, cost about $75 at the time. And that would generate just enough business for me to be able to sell a dozen windows and do another ad, and we kind of kept this cycle going for about a year. One of the things I'd learned really in prior businesses is if you're better than average and you have good customer ethics, you're honest and you have a good product, and people know you're trying your best to do the right thing, one of the things I discovered in Hawaii, which I'd never seen before, is a word of mouth is incredible, and very, very quickly the majority of my business was from referrals. We worked hard at the installation, worked very hard with customer service, put the customer first all the time, tried to lead my ego at home, and when we did that, we were very successful. And then within a year, I had one other salesman and a part-time secretary all operating at this tiny little bedroom, which was absolutely insane. And so we started looking for another facility. We found a small warehouse in Kaniohi. We still didn't really have much money to do anything. I mean, our showroom was in the trunk of our car, literally, with his window. But it led to better things. And then we found this waterlog warehouse that we picked up for a ridiculous, cheap amount of money. And then we were very fortunate. The Hawaii Hilton, one of the Hilton's down there, was throwing out all their old carpets. And we had to go and pick them up. So we got free carpets, a few gallons of paint. We literally worked for about two or three months building this, which was our very first showroom in a dank warehouse in Kaniohi. But it was enough to get things going. And we slowly built up our staff to where we are today, so in the rest of history. Now, it will point to Sharon enjoying the team. Well, I think it would probably be better if I let Sharon answer that. Apart from being a brilliant salesman, of course. I think I've been doing marketing for a couple years now, maybe about two years now. But I originally met Jerry, and we started dating. And through dating, he actually never stopped being a good salesperson. And I sold me some very awesome windows, I'll have to say. So you're a satisfied customer. Yes, and now our whole house is filled with Jerry's wonderful windows. So yes, satisfied wife, satisfied marketing director, and satisfied customer. So a couple of times now. It's grown quite a bit. I mean, in 15 years, starting with basically nothing, to one of the largest distributors of windows and doors in the state, right? It's been remarkable, Reg, it really has. We first really put our foot on the stage about 2009, 2010. We'd been going three years. We went through a tremendous amount of growth because Hawaii was still relatively new to me. One of the problems we discovered very quickly is virtually all of the windows that are sold in Hawaii are made on the mainland, mainly California, Washington, Oregon, where they don't have a lot of UV. They don't have the salt corrosion here. And they don't have the combination of temperature and humidity, which is so destructive to metals. And we're not likely to get hit by a hurricane on the main coast, which we are here, and it's becoming more and more apparent every year. So what happened about 2010, we, believe it or not, sold 22 different window and door lines. So not only was it incredibly confusing to our customers, it was even harder for us because people would come in and say, OK, well, one of those, one of those, one of those. And it was just nuts. See, that's interesting, because I never knew there was 22 to choose from. I mean, that's hundreds to choose from, hundreds. The main problems with windows that were sold in Hawaii at that time, first of all, is the vinyl. Vinyl stands for ultra-polyburic chloride, excuse me, basically plastic. It's a very high quality plastic. If it isn't, if it hasn't got a certain blend of chemicals, like titanium dioxide, for example, which is a chemical in sunblock, very, very quickly, it will get brittle, it'll yellow. And it does a thing called chalking, where you can literally rub your finger down the face of the vinyl that comes off like powder. Most mainland companies do that within 10 years. But unfortunately, as a new homeowner, you're not going to discover that till it's too late and the company's often gone bankrupt and disappeared back to the mainland, which is all too common, unfortunately. So that was one thing. Secondly, was the hardware. Now, the main operators on awnings and casements and what we call projecting windows is stainless steel. It's pretty much always been stainless steel. Now, stainless, to make steel stainless, is covered in chromium. Now, there's only two things that dissolve chromium. One is ammonia. Can you guess what the other one is? Salt. Salt. So people have got this wonderful stainless steel they're bringing over here. They've opened their windows in Kailua Beach and they can't understand why in six months they're covered in rust, because they don't wash them well enough. And so the chromium dissolves and here you got steel with rust now. Well, now that's an interesting point. They don't wash them enough. So I guess if somebody has this, they're supposed to wash the mechanisms. Exactly. Well, it's in a very fine, fine print. Yeah. No winery. This is one of the gotchas out there that most window companies won't tell you about is they'll very, very happily sell you a window with yes, we've got stainless steel hardware and the customer doesn't ask the right questions. If you were to look at the warranty on virtually every window company in Hawaii, it very clearly states not basically, you're not covered in Hawaii for the simple reason that natural corrosion is not covered on warranty. Therefore you're buying windows with screen and hardware lifetime warranty, which is the most ridiculous thing to say, because they will literally dissolve if you don't take care of them and we've seen it. Now what we do, the two things that make us very, very unique compared to any other company here is the main, what I call the operators, that's the main bars that push them out. They're all stainless steel. Now, what customers won't be told unless they ask the right questions is that every other screw, popper of it and hinge on that window is a thing called E-Guard, which is basically a fancy name for Cami and Plated Steel and that will corrode very, very quickly. So two things we do that are very, very unique. Every single component on our windows, not only stainless steel, it's a marine grade of stainless steel, which is the highest grade you can get. However, if you don't wash that and you don't protect it, it's gonna corrode and any window tells you, company tells you different, they're not telling you the truth. What we do though, before they get delivered or installed, we coat all of our stainless steel with it, it's called a corrosion X, a corrosion block and what this does, this puts some molecular coating above the chromium, waterproofing the chromium and stopping the salt dissolve it and nobody else does that in Hawaii. We're the only company does that. Now, in theory, you could just leave it on the beach all day and it would be fine but if you had a Mercedes parked it on the beach, even if it's got corrosion block, it's gonna corrode. So what we do to educate our customers is after they buy the windows and before they're delivered, twice they get this information, it's a three page, it's basically a simple maintenance agreement. It basically tells you, if you live on the beach, you need to keep salt off this hardware. Any stainless steel will corrode badly if the salt isn't kept off it. And it's this educational process that you go through with your customers that set you apart. I mean, that's why the word of mouth has gone out there. That's why you've got such credibility. You've got people referring you business all the time, right? I mean, because they hear these good things and it's because of this information, there's knowledge that you're sharing. It makes a big difference. Absolutely. And one thing I would like to say, Reg, is to talk to all our customers out there, if it wasn't for our customers and our loyal builders, we certainly wouldn't be the number one window company in Hawaii. And about 60% of all of our business now is direct referral, word of mouth. We work extremely hard to do a really good job. One of Sharon's jobs, not only she did a wonderful job with our website and all our marketing, is she's basically, I'm forbidden to talk to customers about complaints, because like any other guy, my ego gets in the way and I get very upset. I think we're in the right and the customer thinks we're in the wrong. So Sharon does all of that. She does a wonderful job. She's a customer service coordinator, whatever title she likes. She's my wife because she can do whatever she wants. But she basically, and part of the reason Sharon does that and not me or any of my sales guys, is she is unbiased. She's a third party that can honestly look at the situation. And there has been an occasion where she's come back to me on my salesman and said, I think we're in the wrong. We need to do this for the customer. So she's almost like an advocate for the customer. Exactly. Well, I don't have all that much marketing experience kind of coming to the, a little bit late to the game, but I do have a lot of experience being a customer. So what I try to do is bring that into our interactions with respect to customer relations. You know, that's a great combination and a good distinction to have. Every company should have that type of function or person that handles that. Somebody that's not biased, they can kind of step in. Now, we've got a code break, and I want to come back and talk a little bit more. I know you've had some challenges along the way, but I also know there's some great opportunity too. So I want to kind of touch on both of those, but we're going to go on break right now. This is business in Hawaii with Reg Baker. We're here with discount windows and doors and talking to the owners. We're going to go on a 60 second break and we'll be right back. Hi, I'm Donna Blanchard. I'm the host of Center Stage here on Think Tech. This show is so very dear to my heart. We talk with artists of various different ill care about the process that they go through for their art. So we talk about what they're doing, why they are doing it, how they do it. And it's a show that is inspiring. This is what I hear from people all the time and a show that will teach you something sometimes something about yourself. I hope you'll join us. The show is Center Stage. It's on Think Tech every Wednesday at two o'clock. We'll see you then. Oh, huh. How you doing? It's me, Angus McTech. Wishing you to welcome and join us to see us on Hibachi Talk on Think Tech Hawaii. Show my co-hosts, go to the tech center and enter the security guy every Friday from 1300 to 1345. We look forward to see you. We'll talk tech and we'll have some wee bit of fun. And remember, let your wing gang free where you be, aloha. Aloha, and welcome back to Business in Hawaii with Reg Baker. Today we're talking with the Kaneo'i Discount Windows and Doors. The owners are here kind of sharing with us their story. They've got an amazing story. They started from scratch. They've got something very big, probably the biggest window and door company in the state. And we're going to talk a little bit about, did this happen with smooth sailing all the way or did you encounter any challenges? I mean, sometimes they're all against wants to hear about maybe some issues that you had to deal with and how you got around it. What's one of the roadblocks that you may have encountered? Wow, it's interesting you say that, Reg. When I came here, I was about 300 pound. I got in the window business and I basically dropped it really, really quickly. I'm not kidding. And that was all because of stress? All because of stress. Not my lovely wife, it was stress. Actually, I'm glad you mentioned that. 2009, 2010 sort of absolutely collapsed in the construction industry in Hawaii. We literally halved our sales in one year. Wow. And it was a really double whammy. It was particularly difficult because we just expanded. We just moved into a big showroom in Kaneohe, 4,000 foot showroom. We had free warehouses. We were stocking about $50,000 worth of windows. And this whole turnaround happened about three or four months. So we had huge overheads. And we lost nearly a quarter of a million dollars to contractors that went bankrupt. So that, it's like, it was hitting us more sides. We nearly went bankrupt. It was like that for two or three years. Luckily... Two or three years? Two or three years. That sounds like a survival mode. It was. We had to let go of people. We had to sub-lease everything we could. It was very, very hard. We were able to secure outside financing because the last thing we wanted to do was for any of our customers to suffer. And the other thing that really helped us, we had an excellent team. They were hardworking. Still after this day, we've got a fabulous team of guys back there. All of our vendors were wonderful as well. And for a little bit of advice I could give to people in thinking about business on you to business, it is crucial you maintain a good, strong, honest, reliable relationship with all of your vendors. If it wasn't for our vendors, particularly VPI quality vendors who manufacture all our windows for us, and a number of others, Oceanic, Time Warmer Cable, they were fabulous. The local newspaper helped us. I mean, we literally had six or seven months of back due bills we couldn't pay. And they just said, okay, we trust you Jerry, we've got a good relationship. And they just extended our credit as long as you need it. Not only does a company have to have a brand, but the owners have to have a brand. You've got to have that integrity and those ethics and you've got to brand yourself because that's where that relationship with those vendors comes in and it pays off. Yeah, we would never have even survived let alone get here as well as we did. So it was tough for about three years. From my personal standpoint, there was, I even actually had an accountant at the time who recommended I go and solve it. And I don't like to do that. That's A, I don't like to quit. I don't like to give up. But more importantly, if we'd done that, a lot of people would have lost an awful lot of money in their windows. And so we just hung in there. We just kept doing the best we could. We pulled out all the stops, we called people, we kept in close contact with customers. I mean, we were delivering windows 14, 15 weeks as opposed to four to six weeks. And a lot of customers were very, very happy. They were actually happy in spite of it because we communicated very well. I mean, we came through and everything worked well. And I think part of the other benefit which I wasn't expecting at the time is it taught us to run a company extremely efficiently. We cut out the, you know, we just slashed and burned. We didn't, we started analyzing our leads, for example. We knew to the penny what marketing costs per lead, what areas to focus on as far as contractors, areas within Hawaii that were more productive than others. Certain modes of marketing just weren't working for us for advertising. But without being beaten down the way we were, we would have never looked at it in such finite detail. You know, that's a common theme. And I've worked with turnaround and stress company situations before. And when you're in a growth mode, kind of take the eye off the ball a little bit and you kind of let things slip that you normally maybe might not. And then when all of a sudden things start going a little south on you and you have to start tightening the belt and looking for all those opportunities, all of a sudden you find all this fat that just kind of accumulated that you can get rid of. And having gone through that, I'll bet you you'll never make that mistake again. Well, we've already done it. We really hit rock bottom about, say, 2010, 2011. We were doubling and tripling in size every year. So in my mind, wow, we've got this growth thing here. I'd better get more buildings and more staff and, you know, wow, that was our big mistake. And so what we've done now, it literally took us till about four or five years ago to wipe this lake clean. Everybody got everything paid back and then we started accelerating. Only this time I decided until we are tripping over ourselves and we've got containers and crates sitting on sidewalk, we're not gonna expand. That actually happened to us two years ago. We literally had to leave crates outside our facility because we couldn't get them in. And only then did we get another warehouse, which we have now. We've got our own fleet of vans now. We've got a full-time warehouse manager and we're growing very, very carefully one step at a time. And that's the key is it's a controlled growth that you're knowledgeable about and you're managing it. And that makes a huge difference in any organization. So any company can learn from that. Any other thing as well as we're, you know, even though I like to pat myself in the back that we started from scratch, the reason we need to went bankrupt is I was totally under-capitalized. I should never have tried to start the company without getting strong capitalization behind me and I would never do that again. And the same now. We don't even look to even buying a vehicle until we know we've got a very, very strong green balance sheet and a very long order pipeline as well, which we have currently. Well, and talking about the pipeline for a minute. I mean, there's, this is an industry that is it static or is it changing? Is there new technology coming out? I mean, there's, you know, I guess science related to the windows and how they function. It's actually, it's quite surprising. A lot of people look at a white vinyl window and they see it as a plastic window. The fenestration industry, as they call it, is actually becoming quite high-tech and scientific. We developed our own brand of windows a few years ago. We call them a Kai brand of windows. And what we did, we literally got hold of an engineer and we did a scientific survey analysis of the whole market here. The biggest thing that's happening in Hawaii, 10 years ago, the average sea surface temperature here in the winter was 25 and a half degrees centigrade. Today it's 27 degrees centigrade. Now, what that basically means is anything above 26 and a half degrees, a potential hurricane is going to expand and grow. Below that, it'll go down. And what that basically means, if you take a look at 2015, we had 15 category three hurricanes and higher came within 500 miles of our shore. I can only imagine a lot of people would pray because they should have hit us really badly and caused the same sort of damage as Aniki did. So when we designed this window, we designed one with vinyl that's not going to rot in any way, shape or form. But it's what they call virgin violence, a pure form of vinyl that never deteriorates in any way. It's literally got 100 year guaranteed lifespan. The glass we use, it's a double strength glass, literally twice as thick as normal glass. It's insulated. So we've got four times the protection of a normal single glass window in Hawaii. The hardware is not going to corrode, of course, because we talked about that. All of our frames are aluminum extruded reinforced as well. Now what that basically means is they can take a tremendous amount of battering in a hurricane before they'll fail far more than anything else. So high winds like we had this past weekend? Yeah, that was never. I mean, they were gusting up to 80 and 90 miles an hour? Our lowest rated window is 145 miles an hour, up to 220. Now this is just Armacai vinyl range. We do a whole range of heavy duty aluminum impact. I'm going to call bomb blast tested. These are literally used by the military now. In theory, a bomb can blast outside, and it won't come in. They're tested to that extent. You can actually fire bullets at them, and the bullets won't go through. And we're getting a lot more call for that with military material, even the commercial contracts within Hawaii. Hawaii itself has actually got the second highest amount of cranes putting up new facilities in the states today. That was something I read a couple of days ago for the size of the city. So our condo market, the high rises, is booming right now. We've never been so busy in the retrofit market. New home construction. There's about a three to six month wait for permits right now. So the industry is looking really good. I see nothing but strong growth. A lot of good growth potential there. Yeah, absolutely. Now I got to ask, I mean, these sounds like super windows. I mean, they're bomb proof, bullet proof, wind proof. I mean, are there a significant price difference between these windows and others? Depends what you're looking at. Our basic Makai range, which are the Illuminum Reforce double strength Virgin vinyl, they are absolutely the same price as any other good quality window out there. I mean, obviously, we believe that far better. When you get into what they call the large missile hurricane proof windows, these are the ones that you can fire the way they test these. They fire a 12 foot 2 by 4 at 35 miles an hour. Three times at the frame, three times at the window, and it's got to stay there. Our windows don't do that because they're storm proof windows. They're not hurricane proof. But we sell both. We sell both. But to answer your question, typical price for a high impact hurricane proof product is about triple what you pay for our standard storm windows. And the standard storm windows for the weather that we have here in Hawaii is pretty much all you really need. Well, here's another odd thing about Hawaii. In spite of the advent and the potential for hurricanes, we still have a wind zone of 105 miles an hour, which is woefully inadequate and very dangerous, in my opinion. And it's in the works to raise that up to 140 miles an hour. No, and that's a regulation or a building code? It's a building code. It's what they call the IBS, the International Building Code. Anyone on the mainland in the same zone is mandatory to have hurricane proof windows. Hawaii, we're behind the ball there. We need to get it done. It's in legislation, but nothing's been approved yet. Wow. Well, I guess we are in session, so maybe there's something that's going to happen this year. I really hope so. And with respect to the cost, I just would like to throw in that if you're looking at improving your house, your home as an investment, or if you're looking to improve your house in terms of reducing heat, having a cooler home, and, of course, the very important aesthetics, buying windows is the number one way you can do all that. And compared to the cost of a home, it's incredibly a very valuable investment. So it's one of those improvements that you can do the house that you actually can get your money back on. Oh, more than get your money back on. That's a good point on the money, Reg. Our windows qualify for a tax credit of up to $700 as well. So not only do they reflect over 90% of the heat, they are virtually impossible to break into. And as you have a sledgehammer, as Sharon says, you're enhancing the value of your home as well significantly. That's very interesting. It sounds like you started a company from almost nothing. You grew it. You got over some challenges and hurdles, and you've made a success of it. Great partnership and team here. You're truly one of those success stories in Hawaii. So congratulations on a job well done. Thank you. But we are out of time. So we're going to have to maybe come back again at some point and get an update on what's going on. But thank you for being on the show. This is Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30. And we highlight successful businesses in Hawaii. Until next week, aloha.