Brett Graff’s Mixed Company
Larry Mendelson, Victor Mendelson & Eric Mendelson
Brett Graff is an award-winning journalist and a former U.S. government economist who under her trademark The Home Economist contributes to The Miami Herald, USA Today, Fox Business News, Yahoo! Finance, Maxim and more. She has appeared on CNBC, CNN, PBS and Headline News in addition to being frequently quoted by outlets including Los Angeles Times, Cosmopolitan, The New York Times, and Wikipedia. She lives on Key Biscayne with her husband and daughters. Visit www.thehomeeconomist.com to see her reporting.
Eric Mendelson, Victor Mendelson & Larry Mendelson
Beginning at the ages of 6 and 8, the children spent their leisure time after school and on weekends working with their dad, looking at potential real estate investments and, later on, sitting in on high-level meetings. Today Mendelson with his sons Victor Mendelson and Eric Mendelson run Heico Corp., a technology-driven aerospace, industrial and defense business that Victor Mendelson identified as an investment opportunity while he was still in college.
When they first took over the Hollywood-based corporation, it was earning revenues of $20 million — a figure this year analysts expect to reach $900 million. In the first quarter of 2012, the company reported record sales and operating income. And for the past five years, Heico made the Forbes magazine list as one of the country’s 100 Best Small Companies.
We sat down with all three executives after work to learn about their formula for taking strong family values and creating from them solid financial ones.
To Larry Mendelson: We’re all trying to keep our kids close – what’s the secret?
Larry Mendelson: I wanted my children to be interested in the three of us going into business together. And back then, I was converting rental properties into condos so I would take the boys to buildings we were considering and I would ask them, “What do you think of this building?” or, “What do you think of this piece of land?” I wanted their input.
Children are sponges for information and also very creative. If you ask them questions — even very young children — and give them a free table to write on, they’ll come up with good ideas. When looking at real estate — even at 6 years old and 8 years old — Victor and Eric would make important observations, noticing details such as paint color or neighborhood conditions. And they’d say things such as, “This is a good neighborhood because the people keep their patios clean and are proud of where they live.” They noticed particulars that sometimes escape adults. Kids will give you tremendous feedback if you ask questions, listen to their answers, and let them do their thing.
Did you expose them only to properties or people, as well?
At one point we had scheduled important meetings in New York, at a major law firm, and I walked into the conference room with Eric, who was a teenager at the time. The lawyer was very serious — a tough mergers and acquisitions attorney — and he said, “What’d you bring a kid here for?” I answered, “I want him to learn and being here is the best way for him to do that.” During the meeting, Eric asked a few questions that made a lot of sense and afterwards, the lawyer seemed to change his position, saying, “I didn’t realize he understood that.”
To Eric Mendelson: What was a lesson you learned way back then that you employ today?
Eric Mendelson: When I was about 12 years old, my dad was converting a 144-unit rental apartment building into condos. During the renovation process, we installed new kitchen appliances, washers, countertops, cabinets and also painted the walls, laid carpet and fixed the electrical work. This was before electronic spreadsheets so to control the costs he’d created a list containing each unit and the work that had occurred inside. My dad sat me down, taped the list to the top of a desk, gave me a stack of invoices and instructed me to look for cost overruns and double billing. That was my first experience in controlling expenditures and it taught me to be very thorough. That might be obvious to a small or mid-sized business. But when a company becomes big and departments behave as silos, people can lose track of details.
To Victor Mendelson: And what do you remember?
Victor Mendelson: When I was a kid my dad gave me a poem called “Never Give Up” and now I have difficulty walking away – from almost anything! Our work at Heico is a great example. We started investing in the company and later asked for a board seat, but the company said “No.” So we made an offer to acquire it, which was rejected. Later, there was a proxy contest for control, which we lost. Meanwhile, the stock was falling like a lead weight but we sued the company for breaking the rules, got control, and in 1992 faced a recession that shrunk markets. There was a series of setbacks but we stuck to it — and there have been many more examples since that time.
So what advice would you give to today’s parents?
Larry Mendelson: Teach your kids through real life experiences. It doesn’t have to be large amounts of money, let them invest a little in the stock market. Guide them properly but let them make their own decisions. In the military – I was in the infantry and the reserves for six years —they teach you to set an example for people to follow. You cannot be profligate in personal spending and at the same time teach kids the value of money.
Adds Eric Mendelson: It’s true; my dad was that way and continues to be. I also learned from him some important interpersonal skills. I saw my dad shaking peoples’ hands, saying ‘hello,’ and really appreciating everyone around him. Everyone can always tell he’s truly grateful to them. That respect for people has remained with Victor and me to this day.
Adds Victor Mendelson: We learned that tenacity, diligence and hard work will ultimately lead to success. But that it’s also about remembering we’re lucky and that good fortune plays a large role. We don’t come to assume we cracked the code. I can never mislead myself into thinking success is purely a result of ourselves.
Victor Mendelson, Michelle Bernstein, Larry Mendelson, Brett Graff, Lee Brian Schrager,
Tony Hernandez, Eric Mendelson