Podcast: Judson Kleinman has plenty of reasons to be smiling

Bob Tullio: Is there anything over the years that, as a company, you look back and say, “We took a wrong turn, but we were able to correct it.” You know, and it’s okay if you have no answer, but I thought I’d ask because it generates some interesting responses.

Judson Kleinman: You know what, Bob? Anyone who sits there and says that they never took a wrong turn, is lying. You have to take some wrong turns. As an entrepreneur, you’ve got to take chances, and sometimes you make mistakes.

If you’re successful, the good decisions outweigh the bad ones. But the bad ones aren’t necessarily bad — because you learn from them, and they help you shape your thought process, your decision-making, your vision for where you’re going to go. And so… this is a crazy one here. I like when we make a mistake at a customer. You know what? People know everybody’s human. And if you’re perfect all the time with your customer, I think sometimes they take it for granted that what we do is easy. And if somebody else comes in like, “Yeah, we’re happy, but eh….”

But if you have a mistake, and you show up and you fix it — and you’re authentic and you apologize and you make it good — that’s worth more than being perfect all the time. And so yes, I’ve made a lot of mistakes. A lot. We’ve lost our biggest customer several times, and we’ve continued to grow. And we’ve certainly made, yeah, we make mistakes.

And this is another thing about the trusting people, because sometimes people get afraid to make decisions. My conversation with those people are, “Look, I don’t want you to not make a decision because you’re afraid of making a mistake. No decision, I promise you, that you make, is gonna put us out of business. It might hurt a little bit, but make the decision, and make it with the best information you have. And if you’re not sure, we’re all here to support you. Run it by me. You don’t have to, but if you’re afraid and you’re just on the fence about it, you’re not sure one way or the other. Or, talk to one of the other managers.”

Collaboration, working together, communicating. We work together, but don’t ever be afraid to make a decision. That’s not good.

Bob Tullio: That’s good advice. So, as you know, I’m interested in your view about endurance, which seems to be a perfect word to describe the operator experience. Would you agree that endurance has been an important defining characteristic of operators over the years? And can you please expand on that?

Judson Kleinman: I think life is all about endurance, right? I mean, there are so many challenges that we all face in life — good, bad, health, not having health, financial problems, family problems, friend problems.

In business, it’s no different — lots of challenges. 9-11, obviously, the first bomb that went off in the World Trade Center — downturn in the economy. You didn’t experience this because you’re on the West Coast. Superstorm Sandy happened right after we moved into this building, and boy, that was scary. It was crazy.

So, there have been so many massive challenges to the business. And, what do you do? You just have to keep going forward, and you just have to have the perseverance, the confidence, the determination, the team and the creativity to figure out a way to work through those things. And again, to that other question that we talked about a couple of minutes ago about problems, those are all learning opportunities and how you become really good.

I mean, COVID was probably the worst of the worst. And I definitely don’t wanna ever live through that again. That was bad. And I reacted very quickly to that. I’ll tell you, in that first week, I laid off probably 115 of my 125 employees. And I have friends, obviously, like you do — you’re a friend in the business. People are like, “What are you doing? What are you doing?” I said, “What do you mean? Like, aren’t all your offices closing down? What am I gonna do with these people?”

And there was no package that the government had put together yet. PPP, without a question, saved us. I didn’t pay myself for a year and a half — not a dime. That was rough. But all those things make me who I am as a person, and as a business leader And, as our company faces these challenges — we got hacked. We lost a month of sales in our computer system. We had to recreate all of it on paper and ship stuff without a computer. We had to get Bitcoin to some bozo somewhere.

Bob Tullio: So that’s a real problem — computer hacking — for businesses just like yours.

Judson Kleinman: Absolutely. Fortunately — thank goodness — we’ve only had a couple of instances. We had a banking fraud one. Somebody said, “Hey, we changed our bank. Wire the money to this account instead of that one.” It all looked legit on the surface, but there was a couple little things that we didn’t know, and we wired a significant amount of money — that is gone.

Everybody has to have a strategy for that, and there is insurance for it, by the way. Fortunately, I had an insurance broker, Jeff Teitel, who said you have to have cyber insurance. It was about a year — not even a year later — that we had that problem, and thank goodness for that. Thank goodness.

Bob Tullio: But a lot of anxiety though with that.

Judson Kleinman: Yeah.

Bob Tullio: So, look at the new normal in the office environment, in the workplace. You know, you hear about this thing called coffee badging. Have you heard about coffee badging?

Judson Kleinman: Yeah.

Bob Tullio: At least they’re staying in for a cup of coffee. What do operators need to do to adjust, especially on the OCS side, to be successful?

Judson Kleinman: You know, I’ve seen a lot of people post-COVID kind of get fearful of or very particular about where they’re going to put their equipment now, because that asset might not generate the same kind of income that it once did. You know, “I have 50 people in the office — we have 50 employees — but there’s only 10 here.” So, it’s really no different than before, you know, you’re not going to put $10,000 worth of equipment into an office with five people. It’s looking more closely at things.

Bob Tullio: Yeah.

Judson Kleinman: And I think we just have to be more broad-line sellers and look for other opportunities to generate income within the accounts and not let some of those products that you could sell to them go to someone else, like an office products company or something like that. Again, it comes back to the relationship with the client. You can’t tell them to make their employees come to the office.

Many of them want their employees to come to the office, and it’s trickling more and more, but we’re still at least 20% below. We’re losing at least one full day, and it’s probably almost two full days, maybe a day and a half.

So, we all have to get — again, be creative, think out of the box, look for new ways to make revenue, be more agile. Those people I think that are in the office want to do things to keep the people in the office and have more come to the office. So, I think it creates more of an opportunity for us to have those conversations about broadening their offering to more snacks, more beverages, increase their budgets. Again, I mentioned we have Martin and Fitch here, we do food, people are doing lunch — not necessarily every day, but weekly. And those are, again, opportunities. And you don’t necessarily need to have a catering company, like we do, and have a whole commissary kitchen with dozens of people working in there. You can form a partnership with somebody and find a way to provide that food, take a piece of it. That solidifies your relationship with the client a little better because you’re offering more services. Selling more upscale coffees, better machines, changing filters on the machines so that they have good-tasting water, which is important to producing a great cup of coffee. I think most people are doing that today, but if you’re not, you should be.

Bob Tullio: A lot of ancillary income opportunities out there.

Judson Kleinman: They are. And, you know, listen, I’d rather have all the employees in the office, but I can’t do anything about that. So, I try to work with what I have to influence the business and make it better and more profitable.

Bob Tullio: How do you feel about micro market business in general? I know for the most part, you’re a pantry-heavy company, but you are in the micro market business.

Judson Kleinman: So, we do not do any micro markets, no.

Bob Tullio: Not at all.

Judson Kleinman: No.

Bob Tullio: Not one micro market.

Judson Kleinman: No.

Bob Tullio: You were planning on it.

Judson Kleinman: I did, and we dabbled in it. A lot of companies out there are doing pantry and micro markets — and doing it well. But we do pantry — I think — the best, and I don’t want to be really good at this, and really good at that. I want to be the best.

And, I felt like it was going to take away from our focus on being the best and continuing to strive to be better — if we did micro markets. We had a couple… it is a little bit of… There’s different nuances to it, that I think, I just didn’t want to deal with. We do not do any micro markets, no.

Bob Tullio: Is Shafi still up and running?

Judson Kleinman: No, we took that down a long time ago. It’s still there, but no, we, we shut it down. The business completely changed. Obviously, we still sell Keurig. I was one of the first Keurig distributors in the country. Big fan of the company and their innovation, and how it helped me grow actually. Now that, it makes me realize that that was a big part of it. It was so new.

Bob Tullio: You ended the relationship with Keurig.

Judson Kleinman: I did. I did, because I felt it was a little bit too one-sided, and things were changing with other products coming out. And, I formed a relationship with Mother Parkers, but I always respected my agreement with them. I always did everything above board. I never snuck new or other brands in here while I had that relationship.

I live my life with integrity. I don’t mess around with my word, and my reputation means everything to me.

We’re back selling Keurig now. We don’t have a signed agreement. I don’t know what everybody else is doing, but we sell Keurig. We sell a lot less of it than we once did. We obviously… bean-to-cup and fresh beans are much more popular and are great. We have our own line of pods now. We do everything. And that’s always been my kind of philosophy is look, you know, we want to satisfy the customer.

Bob Tullio: You started out as a salesman. How has selling convenience services changed over the years?

Judson Kleinman: It’s just changed enormously. Like we were talking about before. I mean, I don’t know how many SKUs we had, but maybe it was like 30 or 40.

Bob Tullio: Yeah.

Judson Kleinman: We have 3,000 SKUs that we have here. We have a 50,000 square-foot warehouse. We use … our radio-frequency devices to track stuff and barcoding. And I mean, all that stuff is just like, “Wow, look at how it’s changed. It’s exciting. It’s fun.”

I mean, I bore easily. If things were the same today as they were in 1985, I’d be losing my mind. Now it’s like, it’s fun, it’s exciting, it’s new. You get young people coming in and saying, “Hey, why are we doing this?”

Bob Tullio: Yeah.

Judson Kleinman: I’m like, “I never thought. That’s great.” It’s fun.

It’s like... I’m not old, but I’m older, let’s say. And there’s a lot of young people that just think about things that you might not think of. I still have a young mind and believe in the innovation and the creativity.

Bob Tullio: Yeah. Well, along those lines, obviously, you’re still having fun. What do you love about the business?

Judson Kleinman: Everything. I sold the business. I don’t advertise it and make a big deal of it. I’m still here. That was a journey because I had started the conversation with a couple of national players before the pandemic, and then the door got shut on that when the pandemic hit. And then gradually they came back, and I ended up selling to Canteen, and I got to tell you, I couldn’t be happier with the quality of people. I say my boss, and he kind of makes a funny face at me now when I say that to him, but Joe Benti is my boss. I think he’s — I think a lot of people in life that you meet, 80% or so, I tell this to my kids, they’re just not real. They’re either lazy, full of crap, or just lie. So, when you meet one of those 20%ers, I think you really should appreciate them.

Joe’s definitely in that 20%. I love working for him. I love the people around him. Travis, David, all great, great people. I think they enjoy working with me. There’s a lot of respect that goes around, and I’m having fun. We’re doing good things together. and I’m still learning.

Bob Tullio: So, I ask everybody the same question. What’s the secret sauce at Corporate Essentials?

Judson Kleinman: You know what? There is no secret sauce. There isn’t a secret sauce. You have to do so many things well, and you have to be good to your people. The culture is essential. Obviously, you gotta have good people that care. And not everybody’s gonna care. Let’s not be naive here. There are people that come here, and it’s a job, and it’s a paycheck. If you can get 75 or 80% of your people, yeah. If you can get 75% of your people to really truly care about what they do every day — every day — you have a winning formula. You’ll succeed. They’re the ones in front of the customers that deliver the product, and if they make a mistake, they own up to it. But if you care in your core, you have a winning formula. So, the secret sauce, I guess, would be innovation, creativity, great people, caring about your people, and just being a good person.

Bob Tullio: So just trying to make sure that everybody can be the best they can be.

Judson Kleinman: Absolutely.

Bob Tullio: Yeah, that’s a good formula. So, you’ve got a great travel companion, a great life companion right now. You want to expand on that?

Judson Kleinman: I do. Oh boy. Yeah. So, I’ve been dating this woman for 10 years. Our lives met by pure randomness in a restaurant in New York. She bumped into me and… listen, I’m a guy. I turned around, I looked at her, “Whoa.” And we started having a conversation.

And she has stood by me through thick and thin, and through COVID, where I thought I was broke, and I love her. I’m blessed.

Bob Tullio: It’s good to find love, Judson.

Judson Kleinman: It is.

Bob Tullio: Good for you.

Judson Kleinman: It is, thank you.

Bob Tullio: So, what’s next for you?

Judson Kleinman: I don’t know. I got a little teary-eyed talking about my love. What I’d like to do, I haven’t had this conversation with my boss yet. We’ve touched on it. I would really love to stay consulting with Canteen. I think there’s a lot that I’ve learned over my 40 years in the industry and 30 years of being in my own business that I could help the company. Where that is, I don’t know. That’s one thing.

Definitely fitness and riding my bike and volunteering, maybe teaching entrepreneurship at somewhere. Travel for sure, as you know. The world is just such a beautiful place, and meeting people from different cultures and all that is in my plan. Where it ends up, we’ll see. The story has yet to be written.