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Ep009: The IC-DISC Difference with Cory Jackson

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Dave: Good morning, Cory.

Cory: Good morning, Dave.

Dave: So, how are you doing today?

Cory: It's great. Here at my desk looking outside, it's a bit of a cloudy morning, a little bit of rain so that's nice here in Houston.

Dave: That is. Well, let's go ahead and get started. So today, my guest is Cory Jackson, the president of CTG in Houston, Texas. And CTG is a manufacturer of premium seals and gaskets. Cory was also one of my very first clients when I entered the tax consulting business about 15 years ago. He was introduced to us by their CPA firm. And it's really been fun watching the growth of the business under Cory's stewardship. And I value our business relationship, and really appreciate our friendship too. So, I can't tell you how grateful I am that you made time to be my very first client on the IC-DISC Show.

Cory: Wow, what an honor. Thank you so much for having me this morning, Dave. And likewise, I very much appreciate your input through the years and your team there has helped us make some very good decisions for our business with regards to starting off the R&D tax credits, and then on to the IC-DISC. I didn't know anything about that at all. And you've just made it real easy and very impactful for our business, and I can't say enough great things about you. And you've always been a great sounding board for me. And I tell people all the time, you ended up being one of my very best unpaid salesmen. With your other clients, it's been a very good business opportunity for me as well, too. So, you've just done a great job, and I thank you very much for having me this morning, and thank you for being such a great mentor through the years.

Dave: Well, Cory, jeez, you're going to make me blush. That's that's very nice, and very kind of you. Well, let's get into the heart of things. So, let's talk about CT Gasket. Why don't you start from the beginning? Kind of give the the history and what point you became involved because you're the third generation in the business, I believe, is that right?

Cory: Yes, sir. Three generations, and it's very difficult to transition any business through one generation, much less multiple generations. So, it's been a fun ride and I've been very thankful for having a great staff and team and two great generations before me that sort of laid the groundwork and platform for me to be able to take the business forward. And so, definitely is not something that I did on my own. I had a lot of help, and very thankful for those that surrounded and helped me out through my career. I can give back in some way in the future as well, too.

But yes, so starting out, you have to go back to in 1940s in the gasket business, my grandfather was working for a company here in Houston. And he worked there for a number of years and through the '60s, and was actually part of another gasket company in the '60s. And then through the '80s, he sold out of that business. And he and my dad started this business in 1984. So, CPG, as it exists now has been in business for 35 years. And I was about seven years old when they started that. And so, my knowledge of the business going up through the years was really mostly about when I could get to a point where I could help out it was, "Hey, we need you to come up here, and work in the business."

And they started out back in 1984. for those that have been in the oil and gas business long enough and really lived in Houston, since then that wasn't a very good time to start a business. The old oil and gas business, the savings and loan business had crippled the economy down here. And so, I guess, when you're starting out anything that you get from zero is positive growth. So I guess that that is one good thing. But it was a difficult time to start a business and it started out with just one clicker press in Central Texas, that's what the CT stands for. And through the years, just with my grandfather, and my father having been in the business already for a little while just in the gasket business, in general, cobbled together some accounts and scraped just to make the business run.

It's very difficult to get any business to get off and start going. But that time was very difficult. But they were able to do that and had some good customers. In fact, the very first product that we took an order, for the exact piece and customer, we still have to this day 35 years later. That kind of gives you an idea of the loyalty with our customers.

Dave: Really?

Cory: Yes. And so, that just gives you an idea of we've been at this for a long time, and it gives you an idea of the quality and products that we manufacture. Now, what we were doing back then has changed a lot. The way that I got involved in the business, and I think I have to preface the detail of that by starting off saying that I didn't have any interest in getting in the business at all. In fact, when I was a teenager, I can remember thinking, "Who would want to get in the gasket business?" That doesn't seem enticing at all. And so-

Dave: Nothing sexy about it to you.

Cory: No, not at all. And so, in fact, it was more like, I felt like it was kind of punishment in a way. It's like I had to work. Anytime that I wanted wanted something, "Hey, go out in the shop, and work for it." And what that was doing was building in a work ethic. I probably didn't appreciate that as much back then. And we never do when we start out young like that.

Dave: Sure.

Cory: So, I graduated in the Cypress area, here in Houston, grew up in Houston area. And at that time, it was in the mid '90s, and my grandfather and father had moved the business from Central Texas back to Houston. And we were at that time about 15 employees. And as I was graduating from high school, again, I had no interest in the business. So, I actually went and worked for the restaurant business. Worked for a restaurant chain here in Houston, well known one. And worked up through the ranks while I was going to college. I went to the University of Houston because my future wife decided that's where she wanted to go. We met when I was a senior in high school. So, we both went to the University of Houston. And so I was working on my degree while I was working in the restaurant business. I thought I was going to do that long term.

As I was thinking about marriage and those types of things that have it, I was also getting a degree in Hotel and Restaurant Management. I decided that that probably wasn't going to be my career path, and I changed my degree to Information Systems Technology. And that's what I decided I was going to do was go into the IT business. And so, about 1997, 1998 came along, and I was making that transition out of the restaurant business. And so, I started working at CTG to just make ends meet, have another job, and go through the transition process. It wasn't a long term play for me. And what I was doing then was working in the machine shop. We, again, had about 15 people and two or three manual machines, lathes, and I was working by hand manufacturing Teflon, which we still manufacture to this day. I was machining parts, and you would set these parts up by hand. It was a laborious process. I just remember thinking, sitting there doing this going, "There has got to be an automated way to do this."

Dave: For sure.

Cory: And, of course, I was in the midst of switching my degree to Information Systems Technology, and so I did that part time for a couple of years as I finished my degree. And when I got to the end of my degree I graduated in 1999. That was just about in time for the .com bust. You had Y2K, and shortly thereafter that market melted away. So, what started out as a temporary endeavor in the business ended up being a little bit more permanent. Especially, considering the fact that I got married in 1999. So, I needed to have something as permanent as possible.

Dave: Sure. Makes sense.

Cory: So, the first thing I started doing was really looking at ways we could automate the business. And so, I looked at CNC technologies, which is an automated way to do the manual manufacturing process that I was doing before. And that was a big leap for us at the time to buy one of those machines was about $100,000. And when I went to my dad and said, "Hey, I think we should buy one of these." You might as well have been asking for a million dollars or something. It was a big investment. And he had the courage to do that. Put his faith and trust that we could make that work. And so, we brought that in, and sure enough that particular, those items I was working on, and our team was working on it took, say, three hours do one part. You could do that part in 30 minutes. I mean, so it was a huge savings for labor.

And that would be very significant in the evolution of CTG at that time because there was a trend that was just budding there in the late '90s. And then on into the early 2000s, where you had this offshoring going on where products that were manufactured for years commodity here in the United States, began to be manufactured in all kinds of regions. China ended up being one of the big ones that absorbed a lot of that offshoring. And for a business like ours at the time, that was a big deal because products that we were manufacturing that did take us a long time were being sped up by technology, but we also were competing against these other regions that had not typically had that kind of manufacturing capability.

I didn't know all of that was going on at the time. I was sort of just surviving, if you will. But that technology was a big, big part of CTG evolving into the next step and where we are today. And so, about that time my grandfather was ready to transition out of the business. And as I started working my way through the organization, and automated all of the different manufacturing processes that we were working on. Just tried to take any manual operation, and automate it to the degree that we could. A lot of the processes that we do here are still manual, and laborious, but there were a number of things that we could automate. And so we did that. And I mean we had dot matrix printers back then. And the ledgers were all handwritten, purchase orders were handwritten.

Dave: Sure.

Cory: That was the era that I started in with the business. And so, those were real easy, low hanging fruit for me because I was a technology guy. And so, started just working to automate that as well, too. So you have this offshoring thing that's going on in the background and-

Dave: Hey, Cory.

Cory: Yeah.

Dave: Can I just interject with two questions?

Cory: Sure.

Dave: Just clarify two things. One is CNC, I believe that's an acronym. Do you know what that stands for? As far as CNC...

Cory: Computer numeric control. Yes, sorry. I should have clarified that.

Dave: Yeah, no problem. And then the other question was you mentioned that machine cost $100,000. For context, what would the equivalent manual type machine have cost back then?

Cory: Oh, you could have found Clausing Colchester Manual 8, which I was running. That's just a brand. You could probably find one for four or $5,000 to give you an idea of the difference in cost.

Dave: Okay. Yeah. That really does. Yeah, that does. Okay. Well, thank you for letting me sidebar to clarify that.

Cory: No, no, that's great. No problem.

Dave: All right. So, please continue. This is a great story. I enjoy hearing it.

Cory: So, we sort of have that offshoring thing going on in the background. As I'm making my way through the organization, I'm getting involved in sales and seeing the different products that CTG was capable of selling. I wish I could say there were some brilliant marketing strategy that we deployed, that worked perfectly. And I tell people all the time, especially entrepreneurs. So much of growing a business, especially on the sales side is just grassroots making calls, doing a great job for your customers, and getting referrals. That's still a big part of our business even today. And that's really what we did as a team is just sat down and really just from a grassroots marketing standpoint got on the phone, started making contacts, working with people like Dave spray is a perfect example as I started evolving in the business.

And if you surround yourself with good people, then good things are going to happen both in your organization and outside of your organization. So if you do those two things, that helps a whole lot, your organization that just breeds this culture of success. It's just a grassroots get on the phone, and make things happen or make face-to-face meetings if you can. And so, that was the first step. And then as we started to grow we did find that we were... It was getting difficult to compete with some of the commodities that we'd been manufacturing for. So, what that... And again, this wasn't necessarily a plan that we had. But what that ended up doing was it pushed us into the niche of the products that we excel in, even to this day. And what that is, is being able to take dissimilar materials and put them together. That's kind of the secret sauce, if you will, that makes us unique from our competition.

There's lots of people that do certain manufacturing processes that we have, but there's not that many that put it together like we can. And so, we just worked real hard to grow that niche, and target our customers who were needing products that had multiple materials put together and made that our focus. And that worked out quite well for us. To give you an idea now, we've had as many as 100 people on our business. We're at about 75, 80 right now. And when I started out, it was 15. So, that gives you an idea that the size and growth are under about 60,000 square feet now under roof and started with about 10,000 or so. So we've had a lot of growth through the years, and that's been where that growth has come from.

And so, that took us out of that offshoring mode where competitors could come in and easily steal that business. They could not get to that business quite as easily. And so, even to this day, that's one of our specialties is we can manufacturer items that are high end, that are designed to be used in high pressures, and chemical resistance. And we can do them very quickly and efficiently for our customers, especially when they're doing R&D, new product development. And as those new products are successful, then we're able to reap the rewards on the back end as they move through the supply chains, and then they get used on a recurring basis. And so, the consumable is part of our businesses, still a big part of our business even to this day.

Dave: So, can you give me... So, thank you for that? Can you give me an example of some dissimilar products? What types of commodities or materials are you putting together?

Cory: Sure. So, probably the one that's most recognizable for people, if you think about a valve where you're controlling fluids in a pipeline. We'll manufacturer a seal that will have a metal component that is seated inside of the valve and also a rubber component that will actually do the sealing. The metal provides the stability and backup. The rubber provides the ceiling. And so, and that can be a combination then of plastic and a metal, a metal and say just traditional gasket material. So we can do lots of combinations of all of the metallics, the floor polymers, the plastics, and we can convert those into any shape and size. And we go up to very large sizes now, up to 60 inches in diameter to give you an idea.

Dave: Oh, wow.

Cory: Some of these seals... Yeah, they get quite large. And one seal might weigh two, 300 pounds to give you an idea.

Dave: Oh, really. Wow.

Cory: And so, but again, it's all centered around putting those different materials together in a way that the customers can solve harsh problems in their business. And so, and we can do that quickly and efficiently. We also do our own metal machining, so we can manufacture our own molds in-house. That gives us another competitive advantage as well too. So that if a customer does have a new product that they're after that they want us to combine, say a metal and a plastic, we can put all of that together in house and we don't have to worry about interfacing with a third party. So that's kind of one of the things that helps us out as well too. Again, it's all about exploiting that niche where we got being able to put those dissimilar materials together in a quick way.

Dave: So, as I understand it, the decision was made that rather than trying to be the low cost provider of just a pure commodity product that you knew you could never win that game against outsourced low cost competitors. So, you decided to focus on niches that you had a competitive advantage in that were not commodity like. That were mission critical that people would be willing to pay a premium for your capabilities. Does that about summarize it?

Cory: That does a perfect summary. Good. That's exactly right. And so, the markets that we serve, it's quite highly varied in the oil and gas space. And that's another key component is we're not just selling to, for instance, the oilfield service suppliers. We do, and that's kind of the upstream part of our business. But we also sell to the midstream, the pipeline distribution companies, and then also the downstream, the chemical plants and the refinery. So we've got a number of different companies across the supply chain in the oil and gas business that helps us offset those times where the drillers may not have a whole lot going on. The downstream part of our business usually will pick up during those times, not always, but most of the time, and then vice versa.

And then, of course, you've got the distribution of fluids, the midstream business, those customers are always busy doing repairs. And so, those are... And that's our, Dave you and I, I think originally got working together was through someone had originally recommended you to us, and then also one of our customers you were helping as well, too. And that was a pipeline customer where we were manufacturing seals to help them do the pipeline repairs. So, you can sort of get the vision there that we've got these dissimilar products. We've got our specialties. We've got our niche. And then you combine that with being very diversified in the industry that we serve. That just gives you a good platform to be able to grow the business. And so, that's how we've done that.

Dave: I was going to just say, I believe you've also through the years have diversified to some extent from the oil and gas business, is that correct?

Cory: That's our key initiative right now, and our future growth model really looks like where there may be some acquisitions. We had our first acquisition a couple of years ago, but we're looking for those opportunities as well that are maybe not necessarily the mainstream oil and gas business. We've had all through the years a part of our business, about 10% or so that is a combination of semiconductor business or computer chips manufacturer. There's a number of our last American plastic products that are used in that business. And so, we've started to exploit some of those opportunities as well, too.

And then also general industrial applications. There's a lot of electrical applications that need injection molded plastic materials, which we do now in-house as well. And so, those are where our growth opportunities are moving forward. And the oil and gas business is here to stay. And I think we will continue to grow that organically. But I think through the mode of acquisitions, and also exploiting some of those other industries outside of the oil and gas like the semiconductor market. I think that's where our growth is going to be as we move forward.

Dave: Okay, that is helpful. So what are some of the biggest challenges you've... Oh, by the way, and so when did you... I believe you said that your grandfather exited the business in 1999. Is that correct?

Cory: Yeah. It was the early 2000s. And then, so my father and I bought him out of the business then. And then I bought my father out of the business in 2012, that gives you the timeline there. He still comes in and helps and works on projects. And he enjoys doing that, and still loves to come in and be part of the team. He's very helpful and I'm very thankful for him. So, yeah, that gives you the timeline of transferring the business between the two generations. That's a challenge and it wasn't easy to do. That's the thing about small businesses is there's not like there's... Even when they grow and are successful, there's not typically... It's not like a big business that can go out and just raise funds very easily to transition a generation from one to the next.

So, you have to be able to work together as you pass to this generation. Number one, the preceding generation has to be willing to let go. That's number one. Yeah, I heard it said once that it's very romantic to think about riding off into the sunset on your horse, and dying on your horse as you ride off into the sunset, but it's really hard on the horse. And so, you got to be willing to let go. And I've been very fortunate to have both generations who want to see the business go to the next generation and be successful. And that is so key no matter what duration like I am. So in order to make that happen there's... I mean, it goes without saying that there will be sacrifices that will have to be made for both generations.

We were able to structure it in a way that we were able to move to the next generation through basically some self funding. It was combination of self funding, and then a payout over time through salary. And so, I mean, there's ways that you can do it. It was very helpful in doing that and helped structuring the deal. That's our accountants. That's another key too is having good consultants that can help you navigate through that process. So, that was probably the biggest challenge in my career was actually going through those two generations. And that's why most businesses don't succeed into the multiple generations because number one, you have to have this new generation being willing to take on the business, and the preceding generation being willing to let go.

That is just two monumental things that are very difficult to happen anyway, regardless of whether you make the transaction happen in a way that the business can afford it. And thankfully, I was in a position to be able to do that, and sort of lay the groundwork to be able to go in, and be successful. And again, it's not me. It's definitely a team. That's been the other critical thing to our success is putting together our management team. Without my management team being as strong as they are now we would not be able to do half of what we do. And so that's also the thing that if I can relay that to others.

If you're transitioning generations make sure that you run the business as a meritocracy, the new generation has the capability, the older generation needs to be willing to let go, to get past that hump then you need to surround yourself with a good management team. And then you need to have good third party, have people outside of your business like Dave Spray, and your accountant. And those need to be solid as well too. If you that, you'll at least give yourself the best chance because business is difficult no matter what. So those would, I'd say the biggest challenges.

The secondary was probably the offshoring. Early in my career because we had to transition the business into doing these more difficult, complicated items. And so, you got two things. Number one, you have to be able to develop the manufacturing processes to do that, and we did that. And then number two, really, the more difficult thing is the marketing part of that how do you exploit your customers? How do you get the visibility? And again, that was a grassroots campaign looking back on it. And even to this day, we track very closely through our CRM how our new customers are coming to us. And it's still majority of word of mouth, people that have heard about us or left and gone on to new organizations. And that still drives our business even to this day. So very, very important, critical piece of business, especially for small businesses as they're growing into bigger businesses.

And so, the offshoring part was the difficult thing. And that's where you really came in and helped us a lot with say, the R&D tax credit because to... And people in business know this intrinsically. It's not getting more friendly to run a business. It's getting less friendly. It's getting more difficult the tax burden. Until here recently, it was sort of this just escalating thing, the burden that a company has to take on, environmental burdens. And some of these things are good things, but they do make it more difficult to run the business and to be profitable.

You couple that with other countries that have a little bit different viewpoint on how to support businesses through subsidies, and you've got things like dumping, for example. Companies that have a lot of surplus in one, or countries that have a lot of surplus will come and then just sell those products into... And plastics are notorious for that. Plastics, and rubber, and steel as well, too. And so, you can imagine, you've got this heavy regulation burden that business owners are having to deal with and work within. And you've also got these new competitors in the early 2000s as they developed in their other countries that you're competing with.

And so, you felt like you're getting surrounded. So, to have the R&D tax credit, and the offshore IC-DISC, those were two ways that would help, especially smaller businesses at least have something working for us to be able to be more competitive. Research and development, we do a lot of that every year. Especially when you consider the fact that sometimes we have no idea whether something is going to work. We're just putting the two manufacturing processes together and hoping that that works. And I think as a society, we all benefit from doing that. And I think that that's a great thing to make available, especially to manufacturers because manufacturing is important to this country.

I would challenge anybody who doesn't think that that's the case. It's very important. I know it's not sexy. But so much of the products that we rely on today are manufactured from products and processes that we do even in this business. So, it's very critically important. And I think the R&D was a big one, the IC-DISC disk as well, too. Now, you've got this opportunity to sell product into markets outside of the US. And, again, that's helping level the playing field, if you will for manufacturers here who are having to compete with these other countries. I think I'm going to... I need to make sure that this comes across, and I think all of my fellow manufacturers in the industry would feel the same way. None of us are afraid of competition. I mean, we deal with competition every day. There's no issue with that. If somebody is better than me at making a particular product or whatever, well, then that's okay. We'll either get better ourselves, or we'll say we're not going to do that and concede.

The challenge is when you're almost fighting a whole other country. That's subsidizing in a way that is really making it difficult for you to even make the product at all. I mean, no matter if you had zero costs. And so, we're not afraid of competition. We're perfectly good with that. The question is, how can we run our businesses in a way that's on a level playing field? And so, I feel like at least I'm thankful for our congressmen and women that have looked at this and said, "Well, maybe there are some ways that we can incentivize businesses." And if it weren't for people like you, Dave, that are actually out, and trying to inform business owners like myself.

We're busy working in the business every day. We're not necessarily saying, "Hey, what is the next best strategy to help us be... For our R&D tax credits." We're not thinking that way. We're thinking about, "Hey, how can we make our next payroll?" Kind of thing and make sure that we've got opportunities for our people in the future. And so, I'm very thankful that there's great advice and people that know how to do that, and can help you go through that process and take advantage of it. I know that's a business opportunity for you as well too. But though, that has been very significant. If a business has not looked at those opportunities then they really need to. Does it work for everybody? No. Even within the manufacturing space, the IC-DISC, the R&D tax credits, some may work for you, and some may not. But you really need to look at everything because if you can deploy those things, it's going to help you be more competitive, no matter what space that you're in.

Dave: Sure. That's an excellent point. You've talked about some of the challenges of the business, and boy, they seem pretty daunting. Is there anything about the business that you enjoy or things that are... Let me rephrase this. What are some of the parts of the business that you are more excited about, and you find more satisfying and fulfilling?

Cory: Well, the people is number one. I love my people and love our customers. And I think that comes through in our culture here. I mean, I think anybody that does business with us knows that we really do try and make an effort to make things right for our customers, and make this a better place for everyone involved. And so, that's the part that I enjoy the most, with the employees, with the management team, now with the customers.

And then the technology is still something that I really thrive on. I enjoy learning and deploying new manufacturing processes. 3D printing comes to mind. You've got all kinds of new technologies and materials, nano materials that are coming out now. And I think that those opportunities... You've got artificial intelligence that's making the robotics become a reality. And so, I'm very excited about how technology is going to continue to evolve and make manufacturing even... I think sometimes people are a little bit afraid of that, but there's really no need to be because those manufacturing technologies are going to be what will make our society advanced and our economies advanced as well, too.

And so, now the risks that business owners are willing to take deploy those things are only going to benefit society at large. And so I enjoy this. The people and the technology are the things that keep me going on a daily basis. If I just had to worry about the tax part of the business. It's important, and I'm very thankful that we've done a good job, and you've helped us do that. But yeah, every day I wake up, I'm very thankful to get to work with my team every day and my customers.

Dave: That is awesome, and I've seen that firsthand through the years, your passion around your coworkers and your customers. So, one of the questions I was going to ask you about was 3D printing. And so, my question was going to be 3D printing, is it a risk or an opportunity, or both for your business?

Cory: It's both. From my perspective, where I stand at the moment, I think that technology is going to grow and it will become more integral with just your standard everyday manufacturing processes, say a lathe and a mill is sort of that standard. Now a CNC lathe and mill, like we talked about earlier.

Dave: By the way, hey, Cory, could you just help explain what 3D printing is for people who aren't familiar with it?

Cory: Sure. So it's a material additive process where instead of... So, traditionally, you would take a solid piece of material, and you would work it either on a lathe or a mill or some combination of those two, and you would whittle it away until you get the final product. In 3D printing, what you're doing is you're actually layering. You're depositing those materials a little bit at a time in four to five accesses all at the same time. So, if you think about a hollow sphere. Well, traditionally, in a manufacturing process the way you would make a hollow sphere is to have two half pieces that you would weld together. So, you have two shells, kind of a broken egg, if you will, putting it together.

Well, you don't need to do that in a 3D printing process. You can just print the egg, deposit those layers a little bit at a time starting from the very bottom of the egg to the very top of the egg and got a hollow egg. So that is probably the best way to describe how 3D printing is actually done.

Dave: Okay. Thank you. That's-

Cory: So, it's a risk from the standpoint of there may be products that were manufacturing now traditionally that a competitor could use 3D printing in the future to manufacture. We could too, and we already have 3D printers that we're manufacturing products. Now, the challenge is that the speed and the materials that the 3D printers utilize are not quite as good as the traditional manufacturing. I think they will evolve. How long that takes is a series of debates. You'll hear some people, the materials are already there. It's just expensive. I haven't really seen that to be the case. I just think that technology is going to take a little while to develop and that's okay. I think it'll definitely at some point be economical, but it definitely has to compete with the traditional manufacturing processes, which are when you consider injection molding now. You've got five axis machining. We've got a lot of really fast ways to produce things, traditionally.

Dave: I see.

Cory: 3D printing has a ways to go till it catches up because those things are advancing with technology as well, too. So it's not like the 3D printing is on an island on its own. It's still having to compete with the technology that's being put into your traditional manufacturing processes.

Dave: That's awesome.

Cory: Yeah, I think it will take time.

Dave: Yeah, that is awesome. So what I'd like to do now, I can't believe how quickly the time is going by. I'd like to talk about one or two customer success stories in the last few years, and just really walk us through it. What was the nature of the client's issue? How were you able to really save the day for them? So, could you just talk through one or two examples like that to give some context?

Cory: Sure. I think the two that jumped out at me the most. The first one is our trademark Energizer Gasket, which is a product that solved a whole host of problems in the oil and gas industry as it transitioned from some of the traditional metallic materials that were being used for flanges and valves and such to the plastic materials. You can't use the same sealing technology on a plastic product as you can on a metal product. So pipelines, for example, were made for years and still are to this day out of metallic products, metallic flanges, metallic pipelines. But as especially on the processing side of things, the chemical plants and refineries started to use more fiberglass, PVC, other plastic materials.

The seals that join those components together had to change with it, and our Energizer Gasket has solved a tremendous amount of problems and issues. And the reason that it does that is because we worked really hard to develop a sealing technology that is integrated into the seal. Here we go different materials. We've got a plastic material and our rubber material that we bond together. And it's got some ribbed seals on the outside of the seal, so that it reduces the total surface area that has made it together whenever these plastic pieces come together. And what that does is you can imagine a plastic flange or valve has a lot less stress capability than a metal, metallic one. It just makes sense. You can crash, just break a piece of plastic so much easier than a metallic piece of material.

And so this gasket reduces the surface area that is required in order to get the seal to set. And so that the people using the plastic valves and pipelines can then bolt those things together with a lot less force and still get a positive seal. And we can put them together with different materials so that they can use different fluids and temperatures and whatever. So I think the Energizer Gasket is sort of the one product that embodies everything we do, and we sell a lot of those. And that's been a real success product, a real success for us. I'd say probably the second thing that's here in recent times has been our combination of floor elastomers, and also Kevlar. You're probably familiar with the bulletproof material.

Dave: Sure.

Cory: And the reason that that has been so successful is because we had a specific application where a customer was using a product in steam and the traditional astrometric materials that were being used just failed all the time. And so, what we did is we developed a material, it's called Aflas, and also Kevlar, which is the fabric material that we're using. And we've developed a technique to be able to bond those two together in a way that whenever they go into the steam applications now that Kevlar helps hold the seal together while it's in service, and so that it doesn't fall apart. And that's what the problem that the customer was having in the past. And that's been something we were able to patent, and it's been a very great success story for us over the last couple of years.

A unique thing about Kevlar is that it's a little bit different than almost all materials known to man. And there's just a handful of materials that behave this way. Water is one of them. But when it gets cold, it actually expands, when it gets hot, it actually shrinks. And so, that was one of the unique characteristics that helped the material work the way that we want it to. I'm steam, it's actually shrinking a little bit instead of expanding. So, it's pretty neat material that we were able to put that in our manufacturing processes. Been a real success story, and now those customers can go in and do those steam applications much more reliably now than they were able to do before and that's been a big win.

Dave: Okay. That is great. Is there another specific success story you can think of or like a customer had some major issue that you basically were able to solve for them and make them very happy?

Cory: Well, I think the one that comes to mind was probably the Macondo. We had the oil spill a few years back. We were actually involved in helping manufacturers, some of the seals that were used to help eventually stop the flow of the oil. And some of our customers were deployed to help come up with solutions for that. And so, it was really a neat thing to be right in the middle of that and help manufacture the seals that solved that. That was a pretty big problem.

Dave: Yeah. And that's where your rapid turnaround really helped, right? Because you were able to iterate quickly.

Cory: Yes, exactly. And so, yeah. No, those are the ones that jump out at me, but the culture of our business has really been about solving problems for customers. I mean, that's really where our niche is. As soon as it becomes a high volume commodity, you still have that opportunity for other competitors to come in. And so, on a daily basis that's, hey, we've got this particular application where we've got to have this combination of chemical resistance and temperature resistance can you help us out. And so yes, like you mentioned earlier, being able to deploy that quickly is where we shine.

Dave: Well, there's one more customer success story, and this is unique. I've never asked this question where I could provide, I could answer my own question.

Cory: Oh, yeah.

Dave: And so, I would like to share because to me it was a huge customer success story just for the listeners. Cory was kind enough to mention that customer I introduced to them. But I think the backstory is interesting. So this client was a pipeline connector manufacturer. Is that technically what they did?

Cory: That's it.

Dave: Or what they do. And I was having lunch with them one day. We had done some work for them. And I said, "Hey, what's your biggest business challenge?" And they said, "Ah, gaskets, they're the bane of our existence. We might have a 50 cent part or a two dollar part, meaning kind of a disposable type gasket, I guess, that'll slow a whole project down for one or two days. A million dollar project, and it's costing the driller hundreds of thousands of dollars a day, and the whole thing's because of one stupid gasket." And I'm like, "Oh, wow, that's terrible. How do you address that?" They said, "Well, we have to have a whole gasket inventory." I'm like, "Wow." And they're like, "We hate it. It takes up all this space. And no matter how many gaskets we have, we never seem to have the exact one we need at the exact time." And I said, "Wow."

Dave: And of course, while we're talking, their offices were only about at the time, I think one or two miles from yours. And I just said, "Hey, I've got a client that's in the seal and gasket business. Why don't we have lunch, and you can chat and see if they can help you?" And they said, "Sure." So we had lunch, and you were great at just trying to assess the problem. I don't know what they were thinking you would do, but your solution was just brilliant. You just said, "Why don't you outsource that inventory, those gaskets to us?" We will, and I believe, and correct me if I don't remember the story correctly, but I believe that you literally started inventorying certain disposable gasket sizes that you might not normally have stocked, right? Just to-

Cory: Yeah, no. I mean, you've essentially got the story right. I mean, it was... Actually, just one step further than that. What we did is we just set an agreement with them that, "Look, just don't worry about that inventory anymore. We'll guarantee that you'll have the seals in two days. And we'll have our manufacturing inventory set at a place." And that's kind of where you were thinking there with the inventory set to where we can respond that way. And that eliminates the inventory carrying cost on your side.

Dave: Oh, wow.

Cory: We got a little bit…

Dave: You didn't actually carry it. You just developed the capability to just produce whatever they would need within two days.

Cory: That's right.

Dave: Oh, wow.

Cory: And so, what we did is we were able to charge a little bit of a premium for that. And they were able to offset that premium with the adherent cost of the inventory disappearing. And so, that was just a win-win situation for everybody. That's the epitome of what we do on a daily basis. Thanks for bringing that up.

Dave: Oh, yeah. It was fun to see. And the funniest part of the whole story was I think the next time I had lunch with you, you were so grateful. You insisted on buying lunch, and then the next time I had lunch with them they were so grateful, they insisted on buying lunch. So, it was like both of you looked at the other one as the hero. For you it was a new customer, and for them you solved this major pain point for them.

Cory: Well, Dave, there you go. There's your other business. You put people together right there.

Dave: Sure, sure. Well, and of course, it was easy to do since I knew you'd take good care of them and every time you refer a client to somebody, you're very cautious about that. So, I have one more question for you then we can wrap up. What advice would you have for your younger self? From, say, 10 or 20 years ago? What do you wish you had known then about the business or life that you wish you knew them? What advice would you give to your younger self?

Cory: Well, it's one that people hear a lot, and until you go through it I still don't even know that the advice that I would be giving my younger self would really stick, but don't let fear be a motivator for you. I mean, that's... I have so many risks that I've been willing to take. It kept me up at night, and really looking back on it, that really didn't need to be the case. You want to be wise and you want to get... Surround yourself with people that have been there, done that, and have a good success track record. Bounce it off of them and get their advice. Surround yourself with people.

I did do that and let that be enough because a lot of the things that you worry about, what I have found to be a truth is typically the things you're worried about are not the things that end up being an issue. And so, just be willing to still take those risks and that's even a challenge for you as you go through your career. And even where I'm at now, you become a little bit more risk averse the older you get, and the more you establish yourself. I don't really ever want to be that way because it's really that willingness to take risk is what drives our economy and what drives our society.

And so, I would tell my younger self don't be afraid. That goes all the way from hiring, right? Don't be afraid to go out and hire that A player because if you have a player, take care of them, and let them go out and perform. Same thing with customers. Don't be afraid of that customer you think that's just out of reach. Don't let fear drive you on that. Go out, and go do that. And surround yourself with people that have been there and done that and are good sources of information like Dave Spray. There's a number of people out there that can do that.

I would tell myself, "Just go out there and do that, and be confident in that." Don't let worry drive you, drive too much of your decision making. That's just a tough thing to go through no matter what in your career. But looking back on it, that definitely... There's probably a few things I didn't do that looking back on I think, "Wow, I probably should have done that where I probably would have been fine." And other things that I've done that I thought, "Hey, we're going to be super, super success stories." Oh, maybe they worked out marginally, but it could have been done in some other way. So you just try to work within the framework that you have as best of your ability and just let it ride, you'll be fine.

Dave: Yeah, you make me think of, I think it was a quote by Mark Twain, and he said, "I am an old man, and I've known a great many troubles, most of which never happened." I think that summarizes it that we spend all this energy worrying about stuff that ends up not even being an issue. So with that, so if people want to reach out to you. Say just an entrepreneur who would love to pick the brain of another entrepreneur or somebody who would be a potential customer of yours, what would be the best way for them to reach out to you?

Cory: Probably my email address is the number one. So, it's Jackson_Cory@ctgasket.com. And that's probably the very best way, and you can visit our website as well too. There's contact information, which is www.ctgasket.com.

Dave: That is awesome. Well, is there anything else you want to add before we wrap this up?

Cory: No, Dave. I appreciate you taking the time to have a conversation with me. And as always, it's a pleasure. Thanks again for all of the great advice through the years. It's been very helpful, and I appreciate it.

Dave: Well, it's mutual. Thanks for being such a great client to work with. Well, you have a great day, and I will catch up with you another time.

Cory: Okay, you too, Dave. Talk to you later. Bye-bye.