Building a Marketing Juggernaut

How did Aquascape's Greg Wittstock--the "Pond Nazi" to his rivals--get so successful so quickly? One key reason: He created an army of loyal customers by teaching them how to make money.

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Clyde Wilson, who owns a 14-year-old landscaping business in Bracey, Va., didn't know much about Aquascape Designs Inc. until last January, when his wife insisted he attend a two-day seminar in a nearby city. Her reason was straightforward: She was scared. Their company had lost so much money in 2002 that they'd had to borrow $65,000 to get through the winter. They clearly needed to do something different, and Aquascape, which designs and sells pond-building supplies, was promoting its seminar as a chance for landscapers to learn how to succeed in the pond business. Whether or not pond-building proved to be their salvation, Mrs. Wilson hoped her husband would pick up some profitable ideas.

It was on the second day of the seminar that Wilson had his revelation. It came in the form of a simple formula he could use to figure out how long it would take his business to reach the breakeven point in any given year (see "Are You on Track to Break Even?" page 67). As soon as he got home, Wilson and his wife plugged in their numbers and discovered that they would need 540 days to break even in 2003. "Omigod," Wilson thought, "we're going out of business." But the formula also gave him hope--by making him more aware of his gross margins. Clearly, his prices were too low. A $300 lawn-cutting contract, for example, should have been $400; a $50 contract for delivering mulch should have been $150. So he raised his rates, and most customers paid them without complaint. In July, Wilson's wife sent him back to school, this time to attend Aquascape's third annual Pond College in St. Charles, Ill. By then, he'd improved his overall gross margin from 6% to 35% and was on track to break even by August 10. At the Pond College, he lost no time in seeking out Greg Wittstock, Aquascape's 33-year-old founder, owner, and CEO. Wilson just wanted to thank the man. "If I hadn't gone to that seminar," Wilson told Wittstock, "I wouldn't be here today. I'd be out looking for a job."

Chances are you're not familiar with the pond industry. You may not even know it exists. But exist it does, with sales of $1.4 billion a year and growing, and its driving force is the company Wittstock started in 1990 when he was still an undergraduate at Ohio State University. Today, Aquascape has 130 employees, 35,000 customers, and $44 million in annual sales. It has been on the Inc. 500 list three times, and its ponds have been installed all over the United States and Canada, as well as in parts of Europe and South America. Most important, it has built an army of loyal customers--mainly independent landscape contractors and pond-supply distributors--who gather every July at a resort near the company's headquarters in Batavia, Ill., to learn, network, and celebrate the joy of ponds. This year's event was a weeklong extravaganza called Pond-erosa--not to be confused with Pondapalooza, the industry trade show that took place two weeks later in Atlanta--and included both the Pond College and the 11th annual Parade of Ponds.

Ponds are, in fact, more than a business to the Aquascape crowd. They are a passion and a calling, and no one is more passionate about them than Wittstock, who is also known as the Pond Guy--a name he has trademarked--and who is an intense, athletic, notoriously volatile, utterly ingenuous former fullback on his state champion high school football team. "My philosophy is that everyone wants a pond," he says. "A lot of people just don't know it yet."

That's a situation he intends to rectify. One of his current projects involves placing pond kiosks in malls around the country. He displayed a prototype at this year's Pond College. "How 'bout that sucker, huh?" he asked the assembled throng, looking and sounding more like an overgrown Bart Simpson than the CEO of a company that has revolutionized its industry. "Do you think we can take ponds mainstream with this? We're going to educate the masses, man! That's what's so awesomely cool about malls!"

By and large, Wittstock's employees share his enthusiasm, and he is venerated by his customers. But, as devoted as his followers are, Wittstock is an object of fear and loathing in the rest of the industry, where people refer to him as the Pond Nazi, call his company "the Dark Side," and regard the Aquascape empire as a cult-like phenomenon. "He's very egotistical, extremely aggressive, and incredibly intolerant of any views that deviate from his own," says one of his industry adversaries. "He looks at business as war. In his own company, he's a tyrant, yet he has this loyal following. That's the cult aspect." Wittstock is even shunned by his father, Gary, who used to be his partner and is now his competitor.

Some of the hostility is related to Aquascape's controversial pond-building methodology, which aims to create a natural eco-system that can keep water clear without the use of chemicals or ultraviolet light. When Wittstock began marketing the system aggressively in the mid-1990s, he raised hackles in the industry because his approach broke many of the rules of conventional pond-building. Wittstock responded by suggesting that promoters of other pond-building techniques were, at best, morons who didn't know what they were doing or, at worst, charlatans who were ripping off their customers. That didn't go over well in the small, collegial world of ponds, where people hold deep convictions about, for example, whether a Japanese koi fish prefers a gravel or cement bottom.

Fear is also a factor--especially now that Aquascape has moved beyond its original niche of contractor-built ponds and begun targeting the do-it-yourselfers who constitute more than 85% of the market. On the surface, the two market segments are very different, at least from a pricing standpoint. Contractor-built ponds start at about $3,500 for a small backyard job and can run to more than $500,000 for a two-acre commercial project with stepped waterfalls cascading into pools. Do-it-yourself pond kits, on the other hand, sell for as little as $200. But no one is underestimating Wittstock's ability to do for the latter market what he's done for the former. "Aquascape has turned itself into a marketing juggernaut," says Steve Stroupe, an industry consultant and independent sales rep, as well as one of the few people in the pond world who has maintained personal and business relations with the various factions. "Greg is creating such a hypercompetitive environment that only the strongest will survive."

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Bo Burlingham

Burlingham joined Inc. in 1983. An editor at large, he is the author of Small Giants: Companies That Choose to Be Great Instead of Big. The book was a finalist for the Financial Times/Goldman Sachs Business Book of the Year Award in 2006. Burlingham is also the co-author with Norm Brodsky of The Knack; and the co-author with Jack Stack of The Great Game of Business and A Stake in the Outcome.

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