So why aren't ranchers lining up at Animalens's door?
Wise admits things haven't taken off as quickly as he hoped they might, but he says he isn't worried. "Any time you're introducing something that's new and different, there's a natural lag." People need to get used to the idea, he explains.
In February 1988 Wise attended the International Poultry Trade Show in Atlanta, accompanied by his father and two associates. From a small booth, they showed a video and displayed the lenses for the first time. They met lots of chicken people and collected business cards, but nothing concrete developed. "People would say, 'We're not ready to do anything now,' " Wise recalls. "They wanted to see more data." The reaction to a $60,000 marketing campaign last summer -- which included a glitzy mailing to the top 200 egg producers and two-page ads in several poultry magazines -- was lukewarm as well. Lots of inquiries, but most of the discussions have led nowhere.
In some cases, chicken farmers think that Animalens's story is too good to be true. Some operators are skeptical, for instance, about the installation. "I don't think handling the birds and installing lenses can be as simple as they say," offers a poultryman from Iowa. Wise, however, sticks to his guns. "Yes, it's labor intensive," he says. "So is vaccinating. But two people working together can do 1,200 birds a day. I've done it myself.'
Many ranchers question how the product will perform in their specific setting -- say, a 700,000-bird operation in North Carolina. Given variations among breeds and management practices, Wise says one can't know for sure. "We tell ranchers to run their own trials." Animalens offers to help farmers design the trials and will assist in the initial installations. "If, based on the test, there's no savings," Wise says, "a rancher would be stupid to buy the lenses for his whole flock.'
A few ranchers have told Wise and Animalens's sales vice-president Jim Collier, who came to Animalens from the computer industry, that they'd gladly test the lenses if Animalens provided them for free. "We won't pay that kind of money until we know they work," says the manager of a million-bird operation in Georgia. A few months ago the company was willing to make deals to generate more data; it provided a few hundred pairs of sample lenses, for instance, to an egg farmer in Connecticut. But now, Wise opposes the idea of giving away product. "We want to work with guys who show a level of commitment." When people pay, he thinks, they'll try harder to realize the benefit.
Until last fall Wise thought that ranchers would be jumping at the opportunity to test his product. He still thinks that once ranchers test the lenses and are sure that they deliver, they'll buy them on a larger scale within a year. Wise had wanted dozens of trials happening simultaneously at farms all over the country. These farmers' decisions might influence others to adopt the product without additional tests. But it hasn't worked out that way. Why? Because the first step -- getting farmers to do the trials -- is taking a lot longer than Wise expected.
The product is now being tested in a few locations. Last December a major ranch in northern California began trying the red lenses on 20,000 birds; smaller field tests are being conducted in Connecticut, Oregon, Florida, and Virginia. There's an academic study in progress at Purdue University.
The company will pass a major milestone, says Wise, when the folks who are testing shift to full-scale adoption. "Having a few happy customers is a lot different from having three or four tests with good results.'
Ultimately, Wise thinks, egg farmers will act in their own interests: if it's known that a few ranchers are achieving superior results with the lenses, others will follow. From that point on, he thinks, the job of selling will get easier. "It's not like there are 2 million potential customers. In the United States there are fewer than 200 major farms. They'll know how to find us, and we have a directory with their names and addresses.'
Given the delays, Wise doesn't expect sales to materialize much before the end of the year. In 1989 he figures the company will lose about $336,000 on sales of $329,000. But it will turn profitable in the middle of next year, he thinks, once test results are circulated. In 1990 Animalens will be a $2.5-million company; in 1992 a $24-million company, with pretax earnings of $6 million. The 1992 number may be conservative, he says. "It's based on selling to less than half of the commercial ranches in the States and only about 5% of the worldwide market.'
Until early 1988 Wise was bankrolling virtually everything himself. In addition to $100,000 of equity, he personally guaranteed a $175,000 credit line. Since then, he's managed to raise a total of $825,000 from private investors (mostly friends and professional contacts). He still owns 55% of the company.
The rate at which the product takes off will determine how much additional outside capital Animalens needs. Because things are running behind schedule, the company has been tightening its belt. The vice-president of marketing was recently let go. On January 1 Wise and the three other employees took pay cuts ranging from 15% to 25%.
