What is luck, really? Some attribute it to four leaf clovers and horseshoes. Others think of luck as a symptom of good karma or something that only happens to people at the right place and time.
However, to Darryl Schoen, one of our new WAVE Advisory Board members, luck is none of these things.
“People love to talk about luck: things like winning the lottery or having beginners’ luck, but really 50% of luck is just that—luck. The other 50% is being able to recognize an opportunity for what it is and make the most out of it.”
As the President and founder of Manufacturers Financing Services (MFS), Darryl credits much of his success to his definition of luck: being given an opportunity and turning it into a reality.
The other part of it, he recognizes, came from boredom.
Growing up in Southern California, Darryl’s first push at entrepreneurship was selling the excess fruit that his family fruit trees would produce. Along with his twin brother, Darryl would take a wagon, collect old strawberry baskets from the store, and go up and down the street selling the fruit to his neighbors.
Later in his life he would get his lifeguard license to teach children how to swim at the local YMCA during the summers. “I would do these 10 day courses Monday through Friday for two weeks. I had two mothers who thought I was an amazing swim instructor. Instead of teaching their kids how to swim at the YMCA, they asked me to come teach them privately in their backyard pools.”
So, Darryl did that, and even though the minimum wage at the time was $1.85, he ended up getting paid $8/hour after the mothers deemed his work worth double what he had asked for.
After high school, Darryl attended California State University, Chico. Being an hour northwest of Lake Tahoe, Darryl learned to ski during this time and quickly developed his love for the snow. This heavily impacted his decision to apply to the University of Wisconsin-Madison for graduate school.
Upon finishing his MBA degree at Wisconsin, he had not gotten enough of the snow. Darryl decided to go work at the then largest bank in the state: the First Wisconsin National Bank of Milwaukee.
“It was great being able to work. I was in a management training program so I spent the first year going to a whole slew of different departments within the bank. I trained as a teller for two weeks, did commercial lending collections and worked in the foreign lending operation. Afterwards I went to work in what they called the money center of the bank. There I would buy and sell money to other banks, and invest excess cash on behalf of corporate clients. It was an incredible learning process for me.”
After a tough winter in Wisconsin, Darryl finally decided he had enough of the snow. “It was my first year in Wisconsin with a car and I didn’t know what a block heater was. When I went hunting for one in mid-October, they had sold out of all the ones that would fit my car. That winter when the forecast would go 25 below, I would set my alarm for three in the morning, and I would get up, get dressed, and sit in my car for about 10 minutes warming it up so that it would start. Well, come late January when my alarm went off, I just decided I wasn’t going to do it that morning and my radiator froze. With a friend we eventually managed to get it started, but ironically, while the radiator was still frozen, my car overheated on the expressway. I knew what to keep in my trunk for earthquakes, but not for my car dying in the middle of winter. Long story short, I ended up getting frostbite on four of my fingers. So Sunbelt….here I come!”
After leaving Wisconsin, Darryl went to work at the large fortune 500 company, Brunswick, in LA. However, after about four years he realized banking and big companies were not for him. Darryl began searching for a new position in a smaller company and eventually found a job at a company that distributed robots and computer controlled machine tools, initially helping them with budgeting and credit.
“It was exactly the working environment I wanted. If I made a mistake, I didn’t have to worry about getting fired. In fact, the first time I made a costly mistake I couldn’t sleep at night thinking I was going to be fired, but when I went in to work the next day the owner said, ‘Hey, you learned, don’t worry about it.’ “
After six years working with them, Darryl became bored. “I was in a meeting with the four executives of the company and after the meeting ended I said, ‘I really like working with you all. This has been so much fun, but honestly, I feel like I am getting bored. Someday, I want to manage my own company.”
Being the true entrepreneurs that those four executives were, Darryl gained an opportunity that changed his life. “The President said to me, ‘You’ve done a stand-up job for us. Think of a company that you would like to start, write a business plan and pitch it to company’s Board of Directors. If they sign off, we will fund it for you. I spent nine months working on the plan, and then met with the Board of Directors, went through my entire business plan and they actually signed off on it that same afternoon. That was the beginning of my company.”
Darryl’s company, Manufacturers Financing Services (MFS), set up a simple vision which still guides the company today: Provide custom-tailored, quick turn-around financing to promote equipment sales. Since its founding in 1991, MFS has expanded nationally, opened multiple offices across the country, and has originated nearly $3 billion in financing.
“Then in 2007 I had two companies (one American, and the other Japanese) approach me out of nowhere. They asked if I would sell the company to them. I was shocked. I didn’t even know what it was worth. I sold MFS to the Japanese company, but didn’t know the real reason why they were so interested in MFS. Once we closed the deal, their intent was clear: the Japanese investors saw MFS as the answer to a big problem they were having with two already-existing American financing subs. Since MFS had never lost money, they thought of it as a cash generator to save them from significant future losses.”
After the sale in 2007, and following the completion of the three-year earn out period, Darryl was asked to stay on and continue management of the company. As of today, Darryl continues as President of MFS and sees this continuing for the next two years until he begins the process of looking for his successor.
Outside of work, Daryl is passionate about his family and maintaining his athleticism. He and his wife have been married for 40 years. Darryl’s wife is a marriage and family therapist whom he had meant in Wisconsin. Darryl and Jaci have to boys. One son completed his MBA at the University of Texas, and lives in Austin with his fiancée. The younger son is in the third year of a Ph.D. program at Columbia University in New York. He loves being able to spend quality time with his family and pursue various sports interests.
“Many years ago when we celebrated my father’s retirement, I asked him ‘Dad, when you look back at your life, what are your two proudest accomplishments in life?’ and he said to me “That’s easy! One, my children. The other thing is that I have felt for many years that when I leave this earth, I want to know that I did something to make it a better place. I think I have done my share to make this world better than it was when I came into it, and for that I am proud.”
Hearing that, Darryl became even more inspired by the idea of helping people and making change. That is why, come retirement, Darryl is excited to spend this next portion of his life committed to philanthropy. His favorite part of this is volunteering as a mentor for future entrepreneurs at Chico state and the Weinert Center for Entrepreneurship.
Darryl would like to share some thoughts of entrepreneurship to those reading this article. “Entrepreneurship attracts many people for a variety of reasons. For me, it was a desire to manage a company, create a culture in which would people enjoy coming to work, and to escape the boredom of my first three jobs out of the Wisconsin MBA program. I believe the culture point mentioned above, is critical to the success of a company.
Many companies, especially large well-known companies, talk about the value of their employees. But very few of them “walk the talk.” In today’s working environment, both parents in two-parent families work full time to support the family. And in many other families, single parents work full time to support their families. In either case, there is a tremendous amount of financial and time stress in the lives of working parents.
I believe it is critically important to truly align a company’s values with the personal values of its employees (which at MFS are referred to as team members). Every parent who is a team member would like to attend his/her child’s school play, music recital, or baseball game. I enjoyed coaching my boys’ teams when they were young. That required me to leave work early to get to the field on time. As the President of the company, I could of course make that decision. But why not allow and even encourage other team members to do the same thing? I advised my team that I didn’t plan on missing these events in my children’s lives, and would encourage each of them to do the same. But we would still need to meet the needs of our customers. So I asked each of them to figure out a way to get the work done. Initially this was in a pre-Zoom world, and even a pre-laptop world. And as a team, we figured it out. One year, my family and I, and another two team members went to a 7:00 p.m. Anaheim Ducks game on December 23. After the game ended at 10:00 p.m., we drove back to the office and worked for 2-3 hours to finish the work which required completion.
Taking a paternalistic view of team members’ families is very important:
- When a team member has a large bill for which there is no cash, why not offer that team member an interest-free loan?
- Reward team members and their families to trips to Disneyland and give the kids Disney bucks to spend while at the park.
- If a single parent’s child is home for a school holiday on a normal working day, why not tell that team member it is ok to bring your child to the office?
- If a team member comes down with cancer, don’t choose to put he/she on long-term disability. I was asked to do this by Human Resources after I sold MFS. As I told HR, I would never add financial stress to that family’s real-life nightmare, especially when that team member is fighting for his life. And when his cancer care didn’t seem top notch, why not fly that team member and his wife to a top-rated cancer institute to save his life?
Truly taking good care of your team members will create immense benefits for you, the entrepreneur: a sense of extreme personal loyalty from each team member which results in almost no turnover for decades. Think seriously about how you will create the ultimate work culture in which your team members and the company will together thrive.”