Business Profile: From the Basement to the Penthouse

This profile of Basement Systems founder Larry Janesky was written by Michael C. Bingham for the February, 2009 issue of Business New Haven.

If they are candid enough, most business owners would admit that they are too busy working in their companies to effectively work on them.

Not Larry Janesky.

Janesky never spent a minute in college, but he is smart enough to have built a $50 million company from the ground up - actually, from the underground up. As founder and CEO of Seymour-based Basement Systems Inc., Janesky's outside-the-box business acumen has attracted the attention of luminaries such as In Search of Excellence author Tom Peters, who two years ago tagged Janesky a business "MVP" and placed him in the company of such then-high flyers as Carly Fiorina of Hewlett-Packard and California Gov. Arnold Schwarzenegger. Noted Peters: "[I] love it when there is a superstar performer in a mundane business. Larry Janesky has built a $50 million, fast-growing enterprise in the business of providing dry basements that are free of nasty mold and available as another (big) room in one's home."

To be fair, "mundane" may describe the average basement, but is hardly an accurate description of Janesky's company, an exemplar of excellence and innovation. Janesky's never-ending drive for continuous improvement distinguishes him from his peers and has earned him the title of 2009 Businessperson of the Year from Business New Haven.

Compared to most CEOs of companies the size of Basement Systems, Janesky's career has followed an unusual trajectory. The 44-year-old was born on Bridgeport's East Side. He attended Bullard Havens High School, graduated and went straight to work as a carpenter. He has never attended college, not so much as a night class.

Also odd is the fact that he has been an employee for all of 30 days in his entire career, during which time "All the [boss] did was swear at me," Janesky recalls. "I figured I was better off on my own."

Over the five-year span between high school and founding his company, Janesky graduated from simple carpentry jobs to building homes. "Back in 1986, kind of like now, the housing bubble burst," Janesky recalls. "Since no one was buying houses then, there was no sense building them. So I had to find something else to do.

"The last house I built had a wall crack that leaked," Janesky continues. "We fixed it and moved on, but in the process I became interested in the basement-waterproofing field and got into it."

So in 1987 Janesky founded the waterproofing company Connecticut Basement Systems Inc. out of his 900-square-foot Devon home. "I'd be brushing my teeth in the morning and the first employee would be walking in the door," Janesky recalls.

Originally the company installed basement waterproofing systems, plain and simple. And business was good: Within 12 months, "We moved to a building in Stratford [on Lordship Boulevard], and we just kept growing so fast and needed more space that we moved five times in 11 years," said Janesky, who purchased the 92,000-square-foot facility in Seymour in 1998.

But in 1990, three years into his new business, Janesky saw an opportunity to revise the business model, a decision that would supercharge the company's growth.

"I observed that there was a lot of room for improvement in every area - products, training, innovation, service, marketing," he says.

So Janesky began to design and create products to help keep moisture out of his clients' basements and crawl spaces. But even as he grew that business, Janesky made a logical leap that only the elect elite of entrepreneurs discover: "We had some pretty good ideas, but I realized: Maybe some other waterproofing contractors would like to use the products we had developed. So we started calling them."

While other waterproofing contractors were trying to recruit dealers, "I knew that we could do it a lot better," Janesky says. "That gave me the confidence to go out there and recruit dealers."

So he did, and today that dealer network is more than 300 strong, selling the company's products and services throughout the U.S., Canada, the U.K., and Ireland. Basement Systems earns the bulk of its income selling products and supplies wholesale to its dealers. (Its subsidiary, Connecticut Basement Systems, continues to perform "retail" basement and crawlspace waterproofing.)

"We learned as much as we could about what our customers were looking for, and what they thought would be great that did not exist yet," explains Janesky. "That made me think about new products - new and better-draining systems, new and better sump-pump systems, basement flooring systems, basement wall, paneling and covering systems, basement window products - we innovated in all those areas and took the industry to a whole different place than it had been before."

Over the years Basement Systems has devised a number of "breakthrough" products for basement waterproofing. Among them, Janesky explains, is a drainage system called WaterGuard, which creates a space between the floor and wall to drain moisture. The product "works better and saves [homeowners] money" compared to competing products, he says. "We've installed 1.5 million feet of it, and it's a giant success."

Janesky also praises Basement Systems' sump-pump systems, which he says "are the best in the world. We've made them better and better over the years, so now we can provide homeowners with peace of mind that when it rains, they're not going to get flooded."

Nevertheless, Janesky is clear about one thing: "Just providing products doesn't get you there."

Instead, he explains, "Our job is to make our dealers successful. It's an alchemy of products, training, sales tools, marketing tools, the culture, that we can create for our dealers so that they can be successful. They don't want products. That's only the means to an end. They want products to run their business. They want to run their business to make money. They want to make money to be successful - not only in making money, but by providing a place for their employees in Madison, Wisconsin, or Calgary, Alberta or Charlotte, North Carolina with a good place to work and a successful career."

Today in Seymour's Silvermine Industrial Park, some 150 Basement Systems employees work in departments ranging from national customer service, production and service dispatch, basement training center, research and development and administration.

On the retail side, "We fix over 2,474 basements a year [in Connecticut, Massachusetts and parts of New York] and our office in Connecticut is the largest individually owned waterproofing company anywhere in the world," Janesky says.

There are four companies under the Basement Systems umbrella: Connecticut Basement Systems; Total Basement Finishing (TBF), a network of basement-finishing contractors that sells the company's proprietary products through some two dozen dealers; the Omaha, Neb.-based Foundation Support Works, which works to address structural problems with building foundations; and the flagship division, which is eponymous with the corporate name, and has a nationwide dealer network. "We operate very similar to a franchise, but we're not a franchise - we're a dealer network," Janesky explains.

To visit Basement Systems' 92,000-square-foot headquarters in Silvermine Industrial Park reflects how its founder perceives the company. Different is a positive value here. Much of Basement Systems headquarters is standard-issue open floor plan, with one striking exception: the Treehouse, which houses the company's Internet department and manages 130 Web sites for Basement Systems and its network of dealers. The space was remodeled just last December "over 15 14-hour days in a row," Janesky explains. "We took it from drop ceiling and blue walls to this," he gestures with a sweep of his hand to what looks just like a sprawling treehouse with hidden nooks and concealed spaces. "Before we had 12 workstations, and it seemed crowded. Now we have 28 and it's more open. We have a very diverse and talented team." Janesky calls it "the most unique workspace in the United States," and it may be. Certainly on one recent weekday the employees who work there are smiling in their cozy new digs.

The headquarters building also houses two large training spaces that can accommodate up to 225 people for twice-monthly training sessions in subjects such as marketing, production, customer service and more.

It's not hard to see why Basement Systems flies high, its earthbound mission notwithstanding. Employees stay for a long time. The company has a keen sense of its own mission, culture and history, and workers embrace that shared culture and transmit it to newbies. One wall is a visual timeline of the company's history - an informal sort of corporate scrapbook with newspaper clippings, snapshots, etc. organized by year to commemorate Basement Systems' growth and maturity.

Basement Systems' workers voted their employer one of the "Ten Best Places to Work" in a 1997 Hartford Business Journal poll. One reason might be the company cafeteria, which recalls a 1950s Happy Days-era diner, complete with jukeboxes in each red-leatherette booth.

"We try to make this a fun place to work," says Janesky as he shows a visitor the cafeteria. "We also want to make a good impression on our dealers, who essentially are our partners when they come here once a year. Then they go back to their territories and remember our culture. We do our very best to make a good impression and get them to feel that they joined the right team."

Recession or no, Basement Systems continues to surge ahead. Just last year the company built a $4.5 million, 57,000-square-foot adjacent building housing 7,000 square feet of office space complementing the warehouse space. "It's bigger than a football field and 30 feet high," Janesky crows.

Right next door are four loading docks to service Basement Systems' fleet of 35 trucks that deliver Basement Systems' products to distributors hither and yon. "We ship out 85 pallets' worth of material a day to our dealers, so we're doing quite well," says Janesky. The actual manufacturing is outsourced to a web of subcontractors.

While some light assembly is performed in Seymour, the key to the company's success and the core of its mission is product design. Janesky says his company holds 25 patents on key products such as sump pumps and dehumidifiers, with more pending. "Our specialty in adding value is in innovation and business systems to be successful in this business," he says. "That's the only way we make money, is by selling products. We're not a franchiser and we don't collect royalties."

So, how did Larry Janesky learn all this stuff that no one had been able to figure out before?

"It's common sense," he says, modestly. "I personally get bored doing the same thing over and over again. So I continually ask: 'How can we do something really cool today? How can we do something much better than it's ever been done before? How do we re-invent something to add value along the way?'

"There are hundreds of places you can innovate in your business," Janesky says. "Most [business owners] see it as motions that you just go through - but I don't see it that way."

And this part is key: "Every process is an opportunity to add value," he explains. "Not just in the product, but in the way you pay people, the way you communicate to your customers, what your products look like, colors - something as simple as taking what the whole world thinks should be a black part, and making it red. It jazzes things up a little and tells the world, 'Hey - we're different.'"