With the recent passing of Tom Denig, which was not long after Gene Toombs’, we should take a moment to reflect on their stunning success, gained while working separately and together. They both took over highly technical companies in the early 1990s, Denig at Trus Joist and Toombs at MiTek, transformed them into world class businesses, folded them into top flight corporations, and then joined together to create winning software.
Both of their companies arose in the 1960s, capitalizing on their innovations in wood structures – Trus Joist in commercial, tubular-webbed trusses, and MiTek’s predecessors in residential wood-webbed roof trusses. Their businesses began overlapping in the 1970s as pioneering component manufacturers, led by Frank Novak’s Truss Span, went head-to-head with Trus Joist in the Northwest. Other CMs followed across the country, taking advantage of their local sales and manufacturing. Trus Joist had to ship from plants in the West until 1973 when they opened a plant north of Columbus, Ohio to service the East, and that year they became a public company. The same year, Gang-Nail also went public. And they became ardent competitors.
Trus Joist’s sales accelerated through the rest of the 1970s and 1980s, spurred on by its breakthrough LVL technology. Yet in its dizzying quest to reach $500 million in sales, it squandered its capital and energies on unwise acquisitions. In 1991, it suffered its first-ever loss. During this same period MiTek, without any comparable innovations, struggled as an also-ran in the plate business. Yet that would soon change.
In 1991, Gene Toombs took over MiTek and quickly transformed it into a software powerhouse. Capitalizing on his recent acquisition of a 3D layout software, he marshalled all MiTek resources to develop whole house software, releasing his own breakthrough product, MiTek 2000, in 1993. The following year, Tom Denig took over Trus Joist and rapidly expanded its manufacturing and sales. By the end of the 1990s, both Denig and Toombs had doubled their sales. Yet that was not enough for either of them.
Denig was the first to act in 1999, parlaying his company into the Weyerhaeuser Company, one of the world’s largest forestry businesses, for a thirty percent premium. In 2001, Toombs followed suit, selling his company to Berkshire Hathaway, one of the world’s largest investors. Now both were armed with the capital they needed for unbridled expansion. Yet that was still not enough. Denig realized that he needed a software tool that would enable him to put all of Weyerhaeuser’s full array of products into a single platform. Toombs realized that his component manufacturer customers needed the same thing, many of which were building supply firms, now known as LBMs. And it was their like-minded, entrepreneurial spirit that brought two competitors together to form the OptiFrame software joint venture in 2001, which shook the industry.
This became a very controversial move, igniting rivalries between the two companies, and upsetting customers who bought from Weyerhaeuser’s competitors. In addition, the OptiFrame developers realized that they’d have to discard their existing software and start from scratch, doubling the development time. Customer-facing associates of both partners became frustrated as the time frame to its launch stretched out even further. By the first software release in 2007, both businesses were in the depths of recession, and yet OptiFrame was far from ready for primetime. By 2008, the partners were at irreconcilable odds, and the joint venture had to be dissolved. Both companies faced the task of taking on more developers, at the very bottom of the recession. Yet Denig and Toombs never wavered in their commitment to investing in the promise of technology, pouring even more money into getting their respective programs across the finish line. And by having the courage to bite the bullet and invest during tough times, they increased the distance between themselves and competitors.
Denig and Toombs were cut from the same middle-class cloth. They attended mid-tier colleges, and served their country in the military, Denig in Vietnam. As implied by their pictures, Toombs would be at ease communing in a boardroom, while Denig would prefer entertaining on his boat [for photos, See PDF or View in Full Issue]. Yet both earned their way to the top, through the sheer force of their intelligence and personality. Beyond this day, Tom Denig and Gene Toombs will likely remain the foremost captains of this industry, separately and together.