How I Did It: Howard Dahl, President and CEO, Amity Technology

Negotiating with commissars. Bartering for payment. Surviving the crash of the ruble.

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As told to Mike Hofman

Howard Dahl was among the first American entrepreneurs to stream into Moscow in 1992, following the collapse of the Soviet Union. Fifteen years and two currency crises later, Amity Technology, his Fargo, North Dakota-based farm equipment manufacturer, is still there. Exports to Russia, Ukraine, Kazakhstan, northern China, and Azerbaijan will account for $30 million in sales in 2007, about 40 percent of revenue at Amity and its two sister companies. Dahl has found doing business in the former Soviet Union to be intellectually exhilarating and spiritually rewarding. He was in Kiev during Ukraine's Orange Revolution, for example, and serves on the board of the first Western-style liberal arts college in Moscow. Through it all, Dahl has developed an abiding affection for the people of these countries, especially the farmers.

My brother Brian and I are third-generation manufacturers in Fargo, North Dakota. My grandfather's company created the Bobcat loader, which was sold all over the world and is still made here in Fargo. My father and my uncle ran a company called Steiger, which made four-wheel-drive tractors. They took it from sales of $2 million to $105 million in five years.

At my father's behest, I traveled in the 1970s to Hungary, where he set up a joint venture with the government to manufacture tractor wheel axles. My wife, Ann, and I also spent the summer of 1974 living in Vienna. At the time, what struck me about the other side of the iron curtain was the grayness of the place. Homes and businesses were in disrepair and the people were mistrustful of almost everything.

In 1977 my brother and I started our own company, called Concord. The original idea was to develop technology to help farmers in the Third World ease poverty and famine. But then reality set in. Global poverty was a bigger task than I could handle, so I put my energies into creating a sustainable business. We eventually became the market leader in pneumatic seeding equipment, which is used to plant wheat and soybeans.

In 1996, we sold the company to the Case Corporation. As part of the deal, we retained ownership of several product lines that Case didn't have as much interest in: some specialized farm implements used to take soil samples, as well as large equipment used to harvest sugar beets. On the day the deal closed, our present company, Amity Technology, was born.

Mikhail Gorbachev's reforms played a role in leading us to expand the business overseas. Two of Amity's shareholders are brothers from Canada. Their father fled Russia in 1919, not long after the Bolshevik revolution. Their mother got out in 1929. When Gorbachev began to open the Soviet Union to the West through the program known as perestroika, the brothers went back to visit their roots in the Kuban region. On those trips, they saw collectivized farms that were 10 or even 50 times as big as farms in North America. They instantly saw an opportunity for Amity. Our equipment is ideally suited for large farms, and these were the largest farms on earth.

We shipped our first five units into Russia in 1991. Back then, Amity had only about $10 million in annual revenue, so expanding into a foreign market was a big deal--let alone expanding into a market like the Soviet Union, which was in such extreme turmoil. Only months before, hardliners had tried to take control of the government in a coup d'état. Boris Yeltsin had foiled their plans and then overseen the breakup of the Soviet Union into independent states. The risk for us was only heightened by the fact that we sell big-ticket items: A typical deal might be $125,000 for two pieces of sugar beet harvesting equipment.

On my first trip to Russia in 1992, I found myself standing in Red Square looking at the Kremlin. It was thrilling. But I understood that it was a time of both hope and fear for the Russians. The ruble had just gone through a terrible devaluation, and I saw many old women on the streets, standing in silence, trying to sell bread or cakes in order to make ends meet. It was very poignant.

Amity's earliest customers were government-run institutions in Stavropol, the province that Gorbachev came from, and in Siberia. Most Americans think of Siberia as a cold and desolate place, but there are fine farms there. The region reminds me of northern Minnesota or Manitoba or Alberta near the Peace River. Doing business with the bureaucrats who ran these farms could be extremely frustrating. They had no concept of what we think of as basic business practices and negotiating with them could be awful. One time, I felt so bullied by an official that I blurted out that he was acting like a dictator. That hit a nerve and the meeting ended abruptly.

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