Daddy Dearest

Tama and Jonathan Starr set out to destroy the legacy oftheir father in order to save the family business

Every family business contains the varied seeds of its own destruction. Hard work yields to sloth, genius to mediocrity. The world changes, and management doesn't. Family members multiply, and so do their ideas of how to run the business, not to mention their demands on the payroll.

Family businesses are so programmed to failure that there has arisen a consensus from one culture to the next that it takes no more than three generations to kill one. In Mexico one maxim reads, Father -- merchant; son -- playboy; grandson -- beggar. The Chinese say, From peasant shoes to peasant shoes in three generations. And in the United States one folk saying goes, From sleeveless to sleeveless in three generations.

That hasn't happened at The Artkraft Strauss Sign Corp., though by all rights, it should have. Now in its third generation of family control, Artkraft has all the elements that often doom a family business. Its founder was an irascible genius and autocrat who built his company into a legend. His son, the frustrated heir for many years, was every inch the autocrat his father was but nowhere near the businessman. Under him, Artkraft declined. His heirs, a son and a daughter, were more interested in riding motorcycles and writing rock-and-roll music than in reviving the family business. When they did return to the fold, they were confronted not only with the excesses of ego and harebrained genius but also with the burden of Artkraft's mythic past.

Since the 1920s Artkraft has been the dominant maker of spectacular outdoor signs in New York City. Its history blazed in neon, from Coca-Cola to Camels and, more lately, to Fuji and Sony, Artkraft has built virtually every sign that ever lighted Times Square. It has also been a force in lighting the Great White Way of Broadway. A recent reading of The New York Times revealed that of the 25 theaters staging Broadway plays, 23 hired Artkraft to build their marquees. That is one tough act to follow.

But today the company has about 175 employees and revenues approaching $17 million, more than double what they were five years ago. Somehow, in the case of Artkraft, the family-business pattern of third-generation decay has not held.

Artkraft occupies a two-story brick building on Manhattan's West 57th Street hard by the Hudson River. It is an industrial space of heavy metal doors, dank staircases, and scuffed walls, where workers muscle leviathan pieces of sheet metal amid the high-pitched whine of power tools. The spectacle of all this metal, glass, and wiring coming together is magical. "One thing my father always said was 'Make your trademark a landmark,' " says Tama Starr, Artkraft's chief executive officer and granddaughter of the founder. "You take something very small and make it surrealistically large and incorporate it into the architecture of a city. That's something transcendent. It's startling from an artistic point of view."

Tama is an engaging, spirited woman of 44. Her voice carries a gravelly edge from smoking too many Camels. Artistic and intellectual, Tama now spends a lot of her time sweet-talking New York City real estate magnates into paying their bills on time. In one notable case, a developer -- known as much for his yacht as for the declining value of his properties -- offered to pay Artkraft in gambling chips. Tama declined. Two weeks later a new deal came down -- undeterred, he offered to pay in the form of tickets on a certain airline operating between major cities on the East Coast.

Jonathan, Tama's brother and four years her junior, is Artkraft's chief operating officer and decidedly more deadpan. He is soft-spoken and earnest, the foil to Tama's winsome nature. "I have a real love for this industry. It's in my blood." He uses the word destiny to describe how he came to work for Artkraft after years of rebellion and exile.

Two strong-willed siblings running a company like Artkraft at this point in its life would seem the kiss of death. Tama acknowledges the peril: "In a family business you are subjecting an emotional relationship to a great deal of stress. You've got to be really enlightened about overlooking what that other person does that bugs you."

Enlightenment seems to have prevailed at Artkraft thus far. The company is building more and bigger signs than ever before in its history. Tama and Jonathan's acquisition of other sign companies has revived Artkraft, broadening its base and making it a more vertically integrated company. The Starrs have aggressively modernized the business and hired a core of skilled managers, supplanting a past in which autocratic decision making and computer phobia held sway.

Artkraft's story raises provocative questions about what it takes for a family company to survive into the third generation. Do the qualities a family business is founded on -- genius, loyalty, hard work -- lose their power after 60 years of operation? Do rebellion and subversion become necessary to keep the enterprise vital? How can a company survive when bitterness divides one generation from the next? How can it possibly hope to improve on the legacy of a brilliant founder?

The genius and force behind Artkraft was Jacob Starr, known by all who did business with him simply as Jake. Jake started out as an ironworker in the Ukraine, but his talents exceeded banging hot metal. He built some of the first electric signs in his native country, and after immigrating to the United States, in 1902, he developed the first electric automobile starter, which he sold to Pierce Arrow for $500 -- a business giveaway he would not soon repeat.

In New York City, Jake landed work for a small sign company on the Lower East Side. At night he went to school, earning a degree in engineering. He saw the advantages of adapting assembly-line techniques to the sign-making trade while preserving the craft component of the business. He also understood the value in adapting new technologies to signs. One such technology was neon lighting, invented in France, and Starr acquired the North American rights to it. By 1930 Jake had risen to control his own sign company. His fortunes soared in tandem with those of the burgeoning industries of motion pictures and advertising.

To many, Jake was a quick-tempered tyrant, far tougher on his family than on his other workers. His nephew Philip Marshall, who has worked off and on for the company since 1954, recalls Jake as "a self-made man of the school that the only way to succeed is if things are not made easy for you; he went out of his way not to make things easy -- particularly for his relatives."