steingroup1
Photo by Emily Moseley
Alan Stein and Sandy Canon have formed the SteinGroup, a business development and management consulting company.
Their new office is located on West Short Street near the burgeoning Jefferson Street district in Lexington. Stein recently retired from his leadership role with the Lexington Legends minor league baseball team and quickly decided retirement is not his cup of tea. Canon, the new company CAO, was most recently an executive with the Community Ventures Corporation and she now works with the CVC as a client.
Both Stein and Canon recently sat down for an interview with Business Lexington Editor-In-Chief Tom Martin.
TM (Tom Martin): For how long were you retired, Alan?
AS (Alan Stein): Three days. People make fun of me because we had this big retirement announcement, and I did sit at home for a couple of days thinking about the next thing — and three days was about it. I just simply say it didn’t take.
I’ve been pretty good at a lot of things in my life, but retirement wasn’t one of them.
TM: Why have you chosen to channel your experience and knowledge into business development and management consulting, and why now?
AS: I was in my retirement, but for about a year and one half prior to that, I had begun thinking that we’d accomplished just about everything I wanted to, at least in the Lexington portion of our baseball business. My partner, Bill Shea, and I had a plan of building a national company, and we were well on our way to doing that, but some things changed and he decided that perhaps we had expanded as much as we wanted to.
We really had accomplished everything that we had set out to do here in Lexington, in terms of our success and legacy in the community and our ability to be a key component of the quality of life here in Lexington. So about a year and a half ago, Sandy and I started talking about what the next act might be. We’ve talked for years about collaborating on our best assets that could be of value to the community while having fun doing it. And given our backgrounds, our successes, and frankly, the contacts and networking that we have both done for so many years in the community, we thought we could do the most good, not only for ourselves but for our clients, by going down this path of management consulting and business development. And so far, I think we’ve hit on the right notes.
SC (Sandy Canon): I agree. Alan and I have very different skill sets, but they are very compatible. And (regarding) our contacts, while many overlap, many extend beyond those here in the Bluegrass — also nationally. And so we’re hoping to capitalize on that and see where those synergies are. So we really want to work on fun things that actually propel people and companies to a better place.
TM: That takes us into how you structured your business plan. How does it work?
AS: The model that we’ve created we think is a bit unique. I actually have investors in our company, including me, but others, (including) some names that you would recognize in the community, so that we were able to go into this business without being fee-based to pay the rent, if you will.
We’ve raised enough money so that if we don’t generate a single penny, we’re going to exist for two or three years. That gave us the freedom to create a new paradigm in terms of compensation, where sometimes we’re fee-based but sometimes it’s a hybrid, where we might make a commission if we raise capital for a project. In some cases, we actually take equity positions in some of these companies and ideas and projects for whom we are working. So it gives us the flexibility to look at virtually everything. It’s really good for some of these clients, too, who have good ideas, good products, good management teams in place, but maybe not so much capital for us to be able to help them improve their position.
Our tag line is “making business better.” That’s cute, and we like it. What it really says is that we can do just about anything. And it gives us the flexibility to look at an awful lot of different opportunities and pick and choose the places where we think we can do the most good, including in the nonprofit world. Sandy and I, from our backgrounds, have so much nonprofit experience and commitment that we promised ourselves that this would be an important part of what we do.
SC: Alan and I are working, and we have two associates with us, but what we are really looking for are strategic partnerships with PR and marketing firms, with accounting firms, with strategic planners. We’re pulling other people in, based on client needs. And there are two different segments that we’re looking at: one is a business or a company or a nonprofit organization that’s having an issue or a problem and, for whatever reason, just can’t quite get over that or move forward with that. So we’re really looking at how do we provide that entity with strategic direction, support to solve that problem or issue? And then the second is for that company or entity to get to the next level. They are a successful organization, but they are looking to have more success. What is going to create the energy, the capital, the knowledge to move them to the next level? Whether it’s a market issue, whether it’s a personnel issue, whether it’s even folks knowing who they are, broadening the capacity for people to know what it is they can do for someone else.
TM: One of the most difficult challenges for a startup business is to find that balance between proper capitalization versus overextending. Are you advising in that area? Can you help a business actually secure startup financing?
AS: The answer to both of those questions is yes. We actually have clients in both of those categories right now. In some cases, we’ve been asked to match products or company ideas with folks who might have an affinity interest in that category and be able to make an investment. Call them venture capitalists, call them angels, whatever term might fit.
At the same time we are helping a lot of folks model what their business plan ought to look like. In one case, we’ve been asked to take a look at an ongoing business that, in general terms, is barely above water, but they are making a little bit of money. It didn’t take us very long to recognize when we did our analysis that one part of the company was making a whole lot of money and one part of the company wasn’t making any money at all and was losing about an equal amount. Well, I’d like to say that our strategic planning skills came to the fore, but frankly it wasn’t rocket science. We said you need to do more of this and less of that. But it works.
TM: But sometimes that is just not obvious when you’re so close to the forest?
AS: There’s no question that a lot of what we do is put a set of eyes on the entire forest, because the people inside are looking at the trees.
TM: Alan, in your most recent past, you crossed paths with none other than Warren Buffett.
AS: Mr. Buffett was, until just very recently, a minority shareholder in what was the Omaha Royals and now the Omaha Stormchasers, the Triple A minor league baseball team in that community that our company bought in 2005. And so we were the managing partners, and Mr. Buffett a minority shareholder.
TM: How has that experience informed where you are now as a businessman?
AS: You know, Mr. Buffett is an incredible guy. He’s everything that you imagine he is. He’s homespun. He’s direct. He’s funny, and he has a skill that I am still overwhelmed by and that is his ability to know every single thing that there is to know about a particular business or topic. And he hones in on it and he recognizes what the key elements are, so I’ve tried to learn that skill from him. I don’t want to overplay it. We’ve had lunch a few times and dinner a couple of times, maybe 20 meetings over the last five years. So we’re not bosom buddies.
TM: That’s not bad.
SC: I haven’t been invited to any of those.
TM: Now Sandy, you’ve been very involved in social justice in this community for quite a long time. You’ve been working to help the less advantaged get a leg up in business with the CVC. How do those experiences inform and shape your role and responsibilities with the SteinGroup?
SC: Well, they inform a lot, I think. One of the things, in my current role as chair in the Lexington Human Rights Commission, looking at employment, public accommodation and housing, is how people have access to basic quality-of-life issues, period. With Community Ventures Corporation, the housing issues for low and moderate income folks, the small business loans and large business loans — because they give loans from $1,000 up to $25 million — really focus on making sure people have technical assistance and information that they need to make good business decisions. All of that feeds into the support that I am bringing to the table with SteinGroup.
With social justice issues, it is a sometimes plotting advocacy around certain issues. I’m not a plotter. I like to go from A to Z pretty quickly. Sometimes I kind of bowl people over in the process, but I think that my tendency to move issues and products forward will really lend itself in the social advocacy and social justice arenas.
TM: What is your growth and development vision for the SteinGroup?
AS: It’s somewhat, and we use this word a lot these days, organic, in that it has to do with our skill sets and the clients who come to us. One of the great things about this and at our stages of our life, we want to make sure that we’re going to have fun doing this. So we don’t want to get pigeonholed into a particular box. We’re representing folks that range from sports, professional sports, to churches who have real estate issues, to manufacturing facilities, to startup Internet companies. I mean, it’s all over the board. In fact we’re going to be adding a whole new division of our company that will be similar to our professional sports division, in the aviation world. We’re going to be examining emergency preparedness and readiness based on federal guidelines and in small and medium-sized airports. We’re expanding into that because it has come to us. We found it to be an area that really needs some help, and so we’re going to be concentrating on that. So we’re open to virtually anything — small businesses and large businesses.
TM: We’ve just come out of a terrible recession, and it’s still a rocky road. We seem to be seeing a percolation of entrepreneurialism here in our community. What do you think is behind that?
SC: I really think you are absolutely right. I think people are stepping up to make sure that they have a quality of life that they want to live. And I think Lexington is a wonderful incubator for that, because there are lots of people with wonderful ideas who know how to sit down and get pragmatic about it. For me, being on Jefferson Street corridor is a perfect example. On my gosh, I mean we’re delighted to be at 601 West Short. We’re at one end of that whole burgeoning, vital street, with us and Wagon Bones and Stella’s and Nick Ryan’s and Grey Goose and Wine Market —and then at the far end, West Sixth Brewery. And that whole Bread Box concept, that is bringing in artists and nonprofit organizations and for-profit organizations — that’s what Lexington is doing. We’ve got entrepreneurs who are saying, “Let’s make this a really great creative place for us, for our kids, or our neighborhoods.” It’s pretty cool.
AS: I think there is a corollary to that. I think one of the things that has really shifted the paradigm is Americans have recognized, for better or worse, that it’s a new world. You can’t rely on finding that job and staying there and relying on the company to take care of you. Pensions are being cut, and all the benefit packages that used to be out there are just not there anymore. So what has happened is people are recognizing that they need to take control of their own economic futures. And in many, many cases, that means being involved in a new business, a new concept, a new idea, or at least to some degree having some opportunity to grab a piece of the action themselves, without counting on someone else. And so that percolation is playing directly into our hands, we think.