Seeing Red

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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%.

When the lenses begin to sell, Animalens wants to be ready. Wise has contracted the manufacturing to a Massachusetts plastic injection-molding company, and he's been accumulating inventory. With six machines cranking away, the plant can make about 80 million pairs annually, enough to generate $12 million of revenue.

As a matter of policy, Animalens intends to stay away from independent sales representatives and build a dedicated sales and service staff of its own. Eventually, Wise hopes to place sales-service representatives in satellite offices -- first in the United States and later in offices overseas. Not many, he says; perhaps 10 or 15. But he refuses to do anything until the revenues start to materialize. "I've learned from earlier experience that you shouldn't spend it until you've got it.'

That's where things stand. Randy Wise thinks he's got an awfully good shot at changing the way that egg farmers do business. "That's what kept me from letting this idea die," he says. He's put up a lot of his own money and convinced many of his friends to do likewise. In Wise's mind, it's not whether his product will succeed, but when.

The only people who haven't signed on yet are the people who will determine the outcome: the ranchers themselves. Wise thinks he's on the right track. "Chicken farmers aren't known for jumping the gun," he comments. Whether he'll be able to win their confidence before he loses his own remains to be seen.

Research assistance was provided by Leslie Brokaw.

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