Assemblies of God
As a man of faith, Pete van der Harst harbors no fear of blank slates. After all, in the beginning there was only a Word, and from there the world rapidly kicked into gear without the benefit of sophisticated modeling programs, industry benchmarks, or the counsel of experienced investors. So when van der Harst dreamed up Portable Church Industries, he was confident that customers' hearts would quicken to a wholly unprecedented service. "There's some education involved in any new venture, but there's more when you're selling a product that no one's ever heard of," says van der Harst, 36. "And we couldn't do market research on something that didn't exist."
Starting any company qualifies as an act of creativity. Launching Portable Church Industries, based in Madison Heights, Mich., required an exercise of imagination akin to inventing not only a better mousetrap but also a whole rodent-ambush industry. The industry van der Harst invented -- for which he coined the term portable church -- involves the physical outfitting of nomadic congregations. Having identified the niche, van der Harst fabricated out of whole cloth all the services, and some of the products, that his customers require. "There was no information source on how to do this," he says, "no place to go for advice." How much should such a company charge for consulting? He swiped a figure from a consultant he'd met. Should a business that serves the church operate as a nonprofit? No, he decided, and so he dubbed his company Industries instead of Ministries to broadcast its for-profit status. As for PCI's offerings, they represent a fusion of ideas culled from every job van der Harst has ever held. And then some. "I'd steal an idea from anywhere," he says. "I'd see something neat at the local Starbucks and say, 'I've got to use that!"
The beneficiaries of van der Harst's magpie-like proclivities are his customers: new, chiefly evangelical, churches "planted" by entrepreneurial worshipers who are bothered by the faint odor of mothballs wafting from established institutions. Since the cost of buying a church building is at least $5,000 per seat, these start-ups shelter like hermit crabs wherever they can. Harbor of Hope Christian Church, for example, launched itself last year in a hotel conference room in Lowell, Mass., and now docks in a middle-school auditorium. Two-year-old Gateway Community Church, meanwhile, takes over an Austin multiplex every Sunday, transforming six theaters into one adult meeting space and five children's classrooms. Gateway's leaders pay the cinema a fee and agree to vanish before the first matinee.
The challenge for those churches is to set up and break down their equipment -- thousands of items, including sophisticated audio and video systems, children's play sets, and coffee services -- with the speed and precision of Formula One racers. And they must do so using labor that is often unskilled and unpaid. Before starting the company, van der Harst explains, "every portable church that we looked at was an administrative disaster. People hauling armloads of junk. Shoulders drooping. Everybody whipped. One guy we worked with said it was like moving a three-bedroom house every weekend."
To solve that problem, van der Harst came up with an ingenious solution, or rather a series of ingenious solutions. Portable Church Industries assembles customized sets of equipment, many of the items engineered or invented by van der Harst himself. It encases that equipment in containers designed for easy unpacking, delivers those containers in tractor-trailers that provide transportation on Sundays and storage during the week, and then trains its customers in the choreography of efficient assembly and dismantling. "It would take us as least twice as long to set up without his system," says Toney Salva, family pastor at Harbor of Hope, who refers to van der Harst fondly as "Porta-Pete." "And it all looks so professional. Things don't start to wear and tear the way they would if you were carting stuff back and forth in tubs and Rubbermaid."
Reduced to business-model terms, PCI is an outsourcer: the company manages its customers' nuts-and-bolts operations so that they can concentrate on their core competencies. But it is an outsourcer whose mission addresses perhaps the oldest decentralization issue in the book. "Pastors are called to be in the life-change business," says van der Harst. "They're not project-management specialists. We are." Not that PCI can fairly be lumped into any generic category of businesses. In fact, it is difficult to imagine PCI being created by anyone other than van der Harst, and it's almost as hard to imagine van der Harst creating any other company. "There have been many strands in my life, and they all came together in this," he muses.
A briskly cheerful man with immaculately trimmed hair and beard, van der Harst looks and sounds like the engineer he is. Numbers dropped casually into conversation may extend a decimal point or two; output devices are lovingly described by their given names. His office -- in a light-industrial-bland building in a light-industrial-bland suburb north of Detroit -- is functional to the point of sterility; its furnishings include bookcases fashioned from the same carpet-covered plywood as his company's packing cases. "We rent as is, so we can't be choosy," says van der Harst. "It's ugly. It works."
The first strand of experience that would ultimately form the weave of PCI emerged during van der Harst's undergraduate days at the University of Michigan, where he supplemented his engineering courses with an internship at United Parcel Service. Assigned to a work-methods and measurement project, this son of a mechanical engineer was dazzled by the company's ability to translate exhaustive metrics into productivity gains. "At the end of the day, they can tell their drivers to the hundredth of an hour what their time should have been worth," says van der Harst enthusiastically. "And it's accurate! That's the stunning thing! It's accurate!"
However, after graduating in 1987, van der Harst turned down a job at UPS. "They said they would start me off in personnel, that I wouldn't be limited by my degree. I loved my degree!" he explains. Instead he joined Andersen Consulting's Detroit office, but found that working for the consulting giant was a disappointment wrapped inside an ulcer. "It's a little hard when you sign on thinking you're going to save North American business and end up messing around with COBOL for two years," he says.
Generally frustrated and unmotivated, van der Harst did warm to one aspect of Andersen: its training. "You go to their training center, and there are 2,000 people from all over the world learning all kinds of subjects," he says with admiration. "They have just got it down." For van der Harst, an emphasis on training became the second strand of PCI.
The last and strongest strand turned into the rope that eventually yanked the young engineer from his well-compensated existence into the enterprise that would become Portable Church. In his few leisure hours, van der Harst had been trying, in vain, to make the church he attended more appealing to a younger audience. "For my generation, the old choir-and-organ routine was incomprehensible," he says.
Then, in 1990, a friend invited him to help launch a progressive evangelical church that would serve 400 congregants amid the lavish trappings of a middle-school cafeteria. Van der Harst accepted the title of operations manager, a salary of $1,000 a month, and a room in the house of another church member. Over the next three years, van der Harst set his nose to the grindstone of Kensington Community Church, logging more hours than he had at Andersen. He met and married Mitzi Rodda -- the only other single person on the launch team. And he began to amass the expertise that would transform portable churches from "rolling garage sales" into "professional-looking, under-control organizations."
To do so, he invented things. The containers that allow volunteers to unload 15 large items instead of 10,000 small ones were inspired by the "igloos" that UPS uses to store packages inside an aircraft fuselage. Exhibits at the North American International Auto Show showed him how to cope with lighting limitations. From robotics, which he'd studied in college, he borrowed the idea for "quick connect" devices that allow nontechnical volunteers to wire up audio equipment quickly.
Soon those UPS-like efficiencies began to produce UPS-like results. At Kensington's parent church, which was also portable, 25 volunteers sweated for three hours to set up a space for 400 people. At Kensington, 6 people could assemble a meeting place for 800 in a little more than two hours. Word spread, producing a parade of camcorder-toting representatives from other portable churches who were eager to document Kensington's processes. "They kept asking, 'How did you make this work?" says van der Harst. "That was when I realized there was a market outside of ourselves."
Not that he instantly translated that realization into concrete plans to start a business. In 1993, with the Kensington project behind him, van der Harst, his wife, and their baby daughter took a monthlong vacation out west. "We were brainstorming about what to do next," says van der Harst. "We'd drive past a rubber-materials corporation, but it wouldn't make my heart beat any faster. We'd drive by a screw works -- high-capital investment and low-wage workers who would probably drive me nuts. A Laundromat? I didn't like it. A restaurant? The hours are horrible.
"Then we'd see a high school or a movie theater, and I'd say, 'Hey, a church could probably fit 150 people in there!' I didn't even realize I was doing it until my wife pointed it out. And I said, 'This is it. This is my passion. Low-cost Christianity."
Portable Church Industries was born in 1993 in the walk-in closet of the couple's two-bedroom condominium. At first van der Harst limited his services to consulting -- advising churches on what to buy -- and selling the cases, which he designed himself and had manufactured elsewhere. Still making things up as he went along, the company founder charged $1,250 per consultation because that was the fee charged by a leadership consultant he'd encountered. Eschewing a salary for three years, van der Harst drew on savings, loans from family members, and a home-equity line that also provided working capital to build the containers. "We agreed not to go more than $20,000 into debt," says van der Harst. "Most months we were tap-dancing within dollars of that line. The first time, we were scared silly."
To advertise, van der Harst had his eye on full-page proclamations in Leadership Journal and Worship Leader, must-reads for well-informed clergy. He approached Ivan French, the owner of an advertising agency and, not coincidentally, the Kensington member who had put van der Harst up in his home for a year. "He wouldn't touch it," van der Harst recalls. "He said we'd have to do education advertising, meaning we'd pay to create the vocabulary so people would know they could use our services. He said that was dumb."
French was himself an expert in launching churches, having consulted extensively with pastors of new congregations on leadership issues. Most pastors, he explains, "have their own philosophies and don't want the influence of outside consultants." Although French liked van der Harst's idea, he figured the only way to sell something so new to so resistant a crowd was through direct mail or, better yet, through personal interviews. "I told him he'd be better off spending time in an airplane," traveling to meet people face to face, says French. Unperturbed, van der Harst found a "starving advertising guy" to do his bidding. French later took over the account.
In 1994, its first year of operation, PCI brought in a less-than-exalted $14,000 in revenues. The following year, a phone call from a disgruntled customer changed everything. "This guy called up, hot under the collar, and says, 'Nothing you told us to do worked. The cases don't roll," van der Harst recalls. It turned out that the pastor had ignored van der Harst's procurement advice, conducted his own low-priced shopping spree, and then tried to pack too much weight onto casters that were unable to bear it. "It dawned on me that we needed to be in product sales as well," says van der Harst. "Customers can still just get a consultation and go live happily ever after at Wal-Mart. But if they want, we can buy and deliver the whole thing and train them how to use it." To date, almost all of PCI's customers have favored turnkey systems, which average $60,000 apiece. Product sales turned out to be far more lucrative than straight consulting. In 1995, PCI had $212,000 in revenues, and in 1996 it turned profitable. Last year, revenues at the 15-employee company climbed to $2.4 million, landing it at #241 on the Inc. 500.
"This is it. This is my passion," Pete van der Harst says. "Low-cost Christianity."
PCI's warehouse and manufacturing plant are located behind the company's offices. In one corner, swatches of nubby, charcoal gray carpet roll through a glue machine that coats them with liquid adhesive so they can be affixed to the finished containers. Toilet tissue, hand sanitizers, masking tape, highlighters, and batteries spill forth from metal cabinets like fruits from a horn of sundries.
This is also the scene of much of PCI's never-ending R&D, which is spiritedly ad hoc. On one day, a technician fashions a video box to keep glare off a screen used in a high school cafeteria that has 30-foot skylights. On another occasion, van der Harst scoots repeatedly down a diminutive plastic sliding board that he has modified to fold up easily. Workers standing on ladders clip hanging signs to ceiling tiles to make sure they leave no mark. In fact temporary signage has received van der Harst's most assiduous attention. Among his innovations: the use of WindMasters -- those spring-mounted, aluminum-frame signs that are ubiquitous outside gas stations -- and messages printed on vinyl bags that can be pulled over existing signs, a device employed by banks just after an acquisition.
Not everything PCI invents is strictly functional, however. There are, for example, the Solo Parent Parking signs, which designate prime spots for folks burdened with multiple children and their trappings. "My wife is a fanatic on that," says van der Harst. "On Sundays it's often just her and the kids because I'm traveling, and she's very specific that she's a solo parent and not a single mom. We're trying to keep the connotations down."
Van der Harst is also sensitive to the connotations suggested by his company's Christian roots. Consequently, he labors to ensure that suppliers take PCI seriously. "We're absurd about prepaying and rapidly paying all our suppliers," says van der Harst. "Anything with the word church in the title is typically slow paying and has a bad reputation. That really grinds me, but it's the reality."
On the flip side, van der Harst must maintain businesslike relationships with customers who aren't always businesslike. For example, some pastors believe that the very act of consulting is morally wrong, because "asking someone to pay for what resides in your brain cells is not right," he explains. Others want financing or heavy discounts, requests that van der Harst denies. "Usually, I'll make some snide joke: 'You know our employees are here in Michigan, and it's a really weird state. They cash their paychecks," he says.
Not all of van der Harst's troubles arise from the pastors' naïveté. Lately, more and more have been challenging him on pricing, claiming to have found comparable items for less money on Web-based auctions. Van der Harst suspects that, in most instances, the objects in question are hot. "We're being quoted $1,500, and we know that dealer cost is $5,000, so there's something wrong," he says. "But I have to say, eBay is bugging me quite a bit."
The other matter bugging van der Harst is his travel schedule: he takes as many as six trips a month, which puts considerable strain on the day-to-day operations of his company and his family. (The van der Harsts now have three children; a fourth is due this month.) But that won't change until he manages to recruit and train more consultants -- people who can sit down with the pastor, the music director, the children's minister, and other launch team members to determine their needs in excruciating detail. There's nothing cookie-cutterish about the process: churches differ greatly in their circumstances and desires.
But in training, as in advertising, creating a discipline from scratch has its drawbacks. There are no books, seminars, or trade publications that address the science of portable-church assembly: it reposes exclusively in van der Harst's brain, and in the brain of Bob Paige, 54, the company's only other consultant. Paige learned the game by trailing van der Harst for two months, but the "hang-around-with-Pete method is expensive and not at all efficient," says the company owner. "The job for me now is to do a massive brain dump and distill everything I know into some kind of tight, concise form -- maybe written, maybe taught in a classroom."
Van der Harst must also train more workers who can, in turn, train the church teams. He calls a paucity of skilled employees the biggest rock in PCI's road to expansion. So far the company has completed about 150 portable churches, but van der Harst estimates that there are 24,000 portable churches in the United States, many of which need help with a launch, an efficiency upgrade, or a retrofit for a new facility. Those churches have nowhere else to turn, and although van der Harst is not especially protective of his monopoly, he doesn't expect to lose it anytime soon. Having invented the industry, he can reel off the reasons why there aren't more entrants: the anorexic single-digit margins, the years of financial hardship, a travel schedule that would test Job. Frankly, he concludes, "I can't think of a coherent business reason why anyone would want to compete with us."
Leigh Buchanan is a senior editor at Inc.
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