Ken Creasman has set up camp in a corner on the 44th floor of the Sears Tower.
He has a desk, a phone and business cards that say he’s an Internet CEO. He’s got 60 days to line up his first customers and then move out. After all, his backers don’t want him getting too comfortable in high-rent, high-rise digs.
Fat chance.
The start-up he was hired to run is competing in a less-than-glamorous industry. His firm is so new, it doesn’t have a name yet, let alone a Web site.
“My overhead is my shadow,” says Creasman, 48, a big-boned, 6-foot-5-inch executive who worked 21 years at ServiceMaster Co., then three as a division president at S.C. Johnson & Son Inc.
The prize he’s chasing now, from his temporary perch in the Sears Tower, is a chance to alter forever a decidedly low-tech industry.
His firm is competing for a slice of the $20 billion spent annually on the mops, pails, floor waxes and toilet-bowl cleaners that keep U.S. hospitals, schools, and commercial buildings shining.
Known by insiders as the “jansan” industry–short for janitorial and sanitation supplies–it’s not a simple business.
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Think about it.
Supermarkets keep floors gleaming, but not so slick that people fall. They clean bacteria off deli meat-cutters. They stock bathrooms with toilet paper and liquid soap. Jansan distributors orchestrate it all.
“Internet Jan San”–the working name for Creasman’s firm–started early this year as little more than a detailed business plan cooked up by global strategy consultant Bain & Co. at its e-commerce incubator, Bain Lab, in San Francisco.
Now Creasman is setting out to prove that a bunch of strategists, when teamed with people who understand the industry, can deliver supplies faster, cheaper and better than thousands of brick-and-mortar distributors or the flashy new dot-coms entering the business.
Yes, even the jansan industry is sprouting dot-coms, from online marketplace BigMop.com to e-commerce wizard JanCentral.com.
They’re looking to take business away from players like the independent distributors affiliated with buying co-op Pro-Link in Massachusetts, where chief information officer Timmy King recently installed a Web server to bring members online.
No doubt, the industry is ripe for change. There’s plenty of wasted time and effort when bulky supplies move from a few big, unrelated manufacturers through wholesalers to 7,000 distributors before reaching 8 million end users.
Yet Bain figures that a lot of dot-comers got it backwards when they put up Web sites and set out to get customers.
“The Internet is a great tool. It’s not a business,” says Edward B. Rouse, who heads Bain’s Chicago headquarters, across the hall from Internet Jan San’s unfurnished space.
So Creasman is hiring managers, lining up key customers and finalizing contracts with eight big suppliers. Three are investors, along with Bain.
United Parcel Service’s e-logistics business, another partner, will provide warehouse and delivery services.
With everybody on board and about $2 million in start-up money, they’ll jointly develop a Web site and systems.
Technology costs will be higher than for traditional distributors. But Bain figures to trim 15 percent to 20 percent off total distribution costs, thanks to the UPS contract and Net efficiencies.
Creasman plans to have a demo site up in about 60 days, but there’ll be no rush to sign customers. He plans on having as few as 10 customers in the first two years. Turn a profit by the third year. Hit $200 million in sales by the fourth.
These numbers aren’t eye-popping. The business isn’t sexy. But if they get it right, Internet Jan San could clean up financially while offering a valuable lesson for the dot-com world.