After buying Excel Dryer, entrepreneur Denis Gagnon realized he had to build a better product. The company spent three years (and almost went bankrupt) creating this new product that would save the company.
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Video Transcript00:08 Denis Gagnon: I was violating my bank financial covenants and I was having a hard time paying the payroll.In 1992, Denis Gagnon bought an equity stake in Excel Dryer, a commercial hand dryer manufacturer. Over the next five years, he increased his equity position, and by 1997 was the sole owner.00:29 Gagnon: Having been now in this business for five years, I realized that we made a product people didn't like. They didn't like using hand dryers. Why? Because they take too damn long to dry your hands. There were always a major cost savings, and they would help keep your restroom neater and cleaner but that end-user did not like the experience of using a hand drier. And they would actually dislike it with vigor, they do the mannerism of wiping their hands on their pants, "The damn things don't work." So, I realized that if we were gonna survive into the 21st century, we needed to build a better mousetrap.In late 1997, Denis and his team set out to build a better hand dryer. The research and development process would take them more than three years.01:20 Gagnon: We spent thousands of hours studying, how to make the hand drying process more efficient, and creating prototypes and testing them. Towards the end of the third year, I was getting very concerned about running out of money. We were spending more on R&D than we were making in profit, so I was literally losing money, not making my bank covenants. And God bless him, one of the former owners lent me some money to finish the project, and a family member, and both gestures will never be forgotten. At the end of the three and-a-half years, the business sold me back two years of salary. I had re-mortgaged the house, I was maxed out on the line of credit and running out of options.Denis had spent more than $500,000 creating a prototype of the Xlerator hand dryer.On July 25, 2000, he unveiled the prototype at a trade show in Atlanta, Georgia.02:23 Gagnon: We would have people wash and dry their hands, and I would time them. And then wash and dry their hands using XLERATOR, and you could just see the expressions in people's faces when they tried XLERATOR. There was a real, wow factor to it. "Wow, this is drying my hands, I like this product." And this caught the eye of a Wall Street Journal reporter who was very, very polite and stood to the side, and just observed people's reactions, waited till they left the booth, tracked them down in the aisle, then introduced themselves and asked them questions about the product, what they thought of the product. He decided it was food for a good story and he did write it up, and the article appeared in the Wall Street Journal. And the next morning, I walked into work at eight o'clock and ABC, Good Morning America is on the phone, and they want me to bring the prototype on Good Morning America.03:20 Gagnon: And while I'm talking to the producer for Good Morning America, one of the gals in the office knocks on the door in a panic and said, "NBC is holding." So, NBC Today Show was holding to make the same appointment for the world to see XLERATOR. And it was very intimidating... Very exciting in one sense, but very intimidating in another sense because you don't wanna fail on national television, and it was a prototype.Denis decided not to bring the Xlerator on either talk show--instead he spent more than a year retooling and perfecting his product.On September 21, 2001, the first shipment of Xlerator hand dryers was delivered to the Animal Kingdom in Orlando, Florida.For the 2012 fiscal year, the company's revenue was more than $30 million.
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