Fear of loss is an old technique, but it's new to Dychtwald. He'd spent his career as a gerontologist building a national reputation as an advocate for the elderly. Then he met Fred Rubenstein, executive vice-president of Institutional Investor magazine, and James E. Bernstein, M.D., the president and founder of General Health Inc., an INC. 500 company in 1985 and '86, and had his own eyes opened.
Age Wave is an experiment, an attempt to combine Dychtwald's decade and a half's expertise in gerontology with Rubenstein and Bernstein's 31 years of experience in growth companies. Dychtwald provides the content expertise and a social agenda. But Rubenstein makes the marketing recommendations, and Bernstein is in charge of operations and finance.
"I'm the student -- they're teaching me how to be a businessman," Dychtwald says. It's how he's always learned his skills -- "the mentor model," he calls it.
Rubenstein and Bernstein set him a rigorous curriculum, aimed at transforming what seemed, at best, a personal-services business into a fast-growth company, as asset he could sell. He would start with no capital -- no debt and no outside equity. He would have to live on cash flow, creating product and management as he went. They would show him how to use the leverage of the marketplace to spread his message further and faster -- and produce a business they could convert to $100 million in cash at the end of five years.
Dychtwald claims to feel "incompetent as a businessman half the time," but so far he's ahead of the projections the three men created at the company's initial planning session in the spring of 1986. By the end of that fall, Age Wave had reliable cash flow and 3 products in development. By year's end, the company was breaking even on sales of $300,000. By the end of 1987, with another 20 products in development, sales were up 900%, to $2.7 million, with profits of about $200.000.
In a few years, if the business keeps growing according to plan, Dychtwald hopes to be able to spend less time on the road. For now, with overhead running at $200,000 a month, the company still needs the cash flow that comes from his presentations. It is still his star power that dazzles the clients, too, which is why he has come to Community Memorial Hospital to see New Jersey's first Aging Resource Center launched. His presence adds value to the sale: two speeches and a press conference are schedule, plus a reception and a one-hour videotaping session.
"Having Ken here is a good as creating the center," Community Memorial vice-president Jim Martin marvels. "We pay him a hefty fee -- but it's worth it to position ourselves with him in our corner, the leader in the market.
"In the long run, these programs are going to draw big bequest money. If someone wants their name on our center, it's going to cost them $2 million."
By the end of his speech, Dychtwald is running on adrenaline alone, eyes red and voice ragged, his fever up to 103. But a bar and four buffet tables have been set up at the other end of the room -- cold shrimp and hot fettuccine, the best the hospital kitchen has to offer. Dychtwald sticks to herbal tea, working the reception until the last guest leaves and he can head for his room in the Holiday Inn.
"Are you OK?" Martin asks him as he leaves.
"Fine, Dychtwald reassures him, smiling wanly. "I've worked sick before."
And what is a fever, after all, when you're trying to change the world?
Friends in the hills around Ken Dychtwald's Berkeley, Calif., home profess to be baffled by his newly discovered fervor for company building. Until 10 years ago, he still had long hair and an earring. But the novice CEO himself see Age Wave Inc. as a natural, if unexpected, life passage -- a consolidation of all that had gone before. He's 38 now, a baby boomer eager to build something substantial for his wife and daughter, grateful for the Jaguar in the garage and the holiday in Hawaii. But he's convinced the goals haven't changed, that the inspiration that once led him to Esalen led also to entrepreneurship. He's still dedicated to "proving we can control our own evolution, through acts of will and risk taking." Trying to build Age Wave has been a way to test his capacity for both.
Dychtwald was just 20 years old when he plunged into California's nascent human-potential movement in 1970. The son of a retail clothier from Newark, one of the first in his family to go to college, he had never been west of Pennsylvania before he left Lehigh University and a planned career as an electrical engineer/physicist to move to the Esalen Institute. "It was another world," Dychtwald remembers.
He immersed himself "3,000%," studying t'ai chi, sensory awareness, and meditation, building his own biofeedback machine, experimenting with massage, practicing yoga up to five hours a day. He convinced Lehigh to accept part of the work toward his degree in psychology. He began writing a book called Bodymind, eventually published in 12 languages and still in print today.
But after three years at Esalen, Dychtwald started to get restless. When he was invited to run a year-long pilot program in human development and health in Berkeley, he jumped at the chance. Only after he gave up his shack at Big Sur and packed up for the move to Berkeley did he find out that the students would all be over 65.
