Conversation Series: Dane Scag, Great Dane Power Equipment

If you want to learn about commercial lawn mowers, there really is only one place to start, and that’s wherever you can catch up with Dane Scag. It is unlikely that any one person has done more to influence the development of mowers to where they are today than he has. But be prepared – Dane takes the complexity of mowers to all-new levels, using phrases like "kinetic energy," "neutral equilibrium" and "breach mechanism."

Today, Scag is president of Great Dane Power Equipment, and I was fortunate enough to catch up with the "Great Dane" himself at the company’s five-month-old manufacturing plant in Jeffersonville, Ind., for an afternoon of discussion and prototype demonstrations.

BW: How did you get started in this industry?

DS: I was actually trained to be a physicist and mathematician. So, how did I get into this business? Quite by accident. I left a major corporation as vice president of research and met Bob Gellerman at an airport in Wisconsin. He asked me what I did, and I told him ‘nothing.’ So he told me I should buy his company, and that he made the Bob Cat snow thrower. He was making about $1 million and had a unique design. I thought this might be a good challenge, so I bought the company.

As smart as I thought I was, I almost went broke within two years. You cannot survive making just snow throwers – it is a very cyclical business. Very quickly I had to develop other products, and a couple of dealers told me to make a high-quality commercial lawn mower.

In 1974, we introduced the very first commercial, self-propelled lawn mower, and it was a belt-drive unit. Sales took off like a rocket, and we sold 9,000 in the first year. We started off with that very simple product, and all the other mowers on the market were disc- or gear-drive with complex clutch systems. We just ran the belt from the engine to the drive shaft to the rear wheels.

Shortly thereafter, the challenge was to design and improve midsize machines. At that time, the only company making them was the Bunton Company, and it was not too difficult to look at that machine and say, ‘I can do that better.’ We opened the discharge chute from 8 to 14 inches to get more air flow and designed a new cutter blade. We got 75 miles per hour of wind flow under the deck instead of 35 miles per hour by changing the configuration of the cutter blades.

Bob Cat grew then as we introduced a lot of different size decks of that mower. I sold the company in 1978 because it had grown quite substantially. We were about $15 million, and I met the principal of Ransomes, Simms and Jefferies, an English manufacturer interested in having an entrée into this country. I was interested in selling overseas, so we were very compatible and it was a good marriage.

BW: Then how did you get back into manufacturing lawn mowers?

DS: Well, Bob Cat had a fair impact as a company that had novel ideas in the industry. So, in 1981, some of the dealers I kept in touch with asked me to manufacture a simple riding mower they could sell. I set up a machine shop and built a riding machine with three wheels. It was a walk-behind unit with a sulke behind it and something like a bicycle handle to steer.

I loaded that up in my car, barely made it over the Continental Divide because of a snowstorm, and I showed the machine to distributors in California, Texas and Florida. Each distributor told me they could sell a few hundred of these units, and then they would give me another distributor to go see.

By the time I got home from the three-week tour I had sold 1,600 machines. Now, I had no factory, I had sold the Bob Cat Company, and I wasn’t too sure what to do. I did not want to build a factory, but with a handshake agreement with Metalcraft of Mayville we entered an arrangement where they would make a machine and I would design it, market it and sell it. That was the beginning of Scag Power Equipment.

BW: Why have you sold your company so many times?

DS: The reason I sold each time was a very simple reason and maybe it is a naïve reason, but with my background in science, what I enjoy and do best is research. My ideal has been that after selling the company, I would be kept on as a consultant in that role.

With Ransomes, I sold Bob Cat and then I spent a few years designing equipment and maintaining the relationship with the industry. I left Scag after we became a leader in the industry and were doing a substantial amount of business with the hope that I would be retained as a consultant and I could continue product development work and acting as a liaison with the industry. But, again, that didn’t work out.

BW: You’re widely recognized as the person who brought the dual hydrostatic mower to the industry. How did that come about?

DS: The principal of Green Thumb in Tamarack, Fla., called me up one day in May of 1989. He said there was a fellow who had designed a dynamic machine that would change the industry. Now, I’ve heard this pronouncement many times before, but I went down to Florida, and this guy shows up with this van. And he’s a musician named Joe Berrios who is cutting grass to make extra money, and he thought the equipment was crude, rough, slow and inefficient.

So he gets out of his van, looks around to make sure that no one is around to see what he’s got, and he pulls the rope, starts the engine and starts moving this machine backward and forward and all around by merely moving his fingers. I looked at that and said, ‘My gosh, that is going to change that industry.’ We made the very first dual hydro walk-behind in 1989.

Up to that point in time, on every other belt-propelled commercial machine you had to shift gears to move forward, then squeeze the levers to go into neutral, and shift the gears to back up. Then you would squeeze the levers to go into neutral and shift the gears to go forward again. Most of the time the operator would just squeeze the levers to go into neutral and then pull the mower backwards. Going in and out was extremely difficult, and just cleaning up the corner on a property took a lot of time.

I negotiated a license to Berrios’ patent, and that machine has taken off and become a leader in the industry as the dual-hydro mower. Today there are approximately 14 manufacturers who have that technology, and all are under license to Mr. Berrios.

BW: What came next?

DS: In about 1994, Snapper wanted to develop a high quality, commercial division, and they called me and asked me if I would come there and help them lay out a new division. Within two or three years we came up with a group of products that had novel features which they’re still selling.

Then, in 1996, I get a phone call from Joe Berrios. ‘Dane, I’ve got another machine here you’ve got to see. I think it will revolutionize the industry.’ So I made my way down to Florida again and we went through the same routine with the van and checking for spies. Finally, he gets the machine down, flips down a platform and stands on it to mow. I said, ‘My gosh, you’ve done it again.’

BW: And this was the start of Great Dane Power Equipment?

DS: We negotiated another license agreement with Berrios right away. I thought this would be such a highly efficient machine because of its ability to do the trimming very rapidly because, typically, trimming a lawn takes anywhere from 30 to 50 percent of the time spent on the lawn. Now we could produce a machine to get into those tight areas at the speed of a riding unit.

We first shipped 2,400 units in January of 1997. We were attracting attention, but obviously one model of one machine doesn’t excite the bottom line of a dealer or distributor. They wanted us to build a more complete line.

I’ve always had the desire to make machines which aren’t "me too" machines. Anybody can go out and buy a product and copy it. In fact, this industry is composed of 90 percent "me too" machines. If you remove all of the paint and decals from all of the mowers you would be very hard pressed to tell them apart. So what could I do with a riding machine that was different? Everyone had throw over arms, and we thought that was kind of crazy, so we changed that and we changed the lift mechanism, and now we’re selling 3,000 of our Chariots a year. From there, we added the Chariot Jr. because end users wanted something smaller.

But whenever I was in the field, I would hear many times that people wished they had bigger machines to mow backyards that are fenced in. Most gates are 38 inches wide, so the biggest mower that would fit would be a 36-inch machine. I thought that was kind of silly, so why not make a machine with a bat-wing design that is 36 inches with the wing up and 52 inches when it’s folded out? We’re going into production on that machine this summer.

BW: What have been some of the most significant changes in the industry overall?

DS: There are more landscapers today than there were 20 years ago, and a lot of them are bigger businesses. They used to be one-man and two-man operations, but they’re much more sophisticated now. That means they are better at buying, maintaining and costing their equipment.

BW: What does that change mean for manufacturers?

DS: That means we need to maintain a closer relationship with our end users even if that means bypassing the dealer and distributor in some ways. I used to just have 15 customers because they were the 15 distributors and the 800 or so dealers, but we need to be more attentive to the landscaper, and there are thousands of them. That’s a key to our success; so we’ve recently become more involved with the major corporations because they buy in large quantities, for example.

BW: How will the machines of the future be different from today’s models?

DS: Machines in the future will probably cost five times more than they do today. My first 21-inch mowers could be sold for $200, and that was a lot of money. The mid-size machines sold for $1,200, and that was a lot of money, and those numbers are 10 times higher today.

Unfortunately, in my opinion, the technology of mowers will change little or not at all. We’re still cutting grass a lot like we did 10 or 20 years ago, and we’ll still be doing the same thing in the future. I relate it to Father Time using his scythe, only now put a hole in the center of that scythe and attach a motor to that scythe and rotate it. That’s called the modern technology of cutting grass, and that’s really very primitive.

If I wanted to cut more efficiently I could use the reel machines – they require a fraction of the horsepower and provide a better quality of cut, but the blades get dulled, hit rocks and sand and dirt. They take a lot more effort to maintain because you are always sharpening the blades.

However, I’m not a person to give up, and I think many people expect us to try other ways to cut grass. We are experimenting with a number of these other ways right now, and I think there will be a breakthrough in horsepower requirement and the method of running the cutting utensil, whatever that utensil is. Rather than going to higher and higher horsepower as we talked about earlier, wouldn’t it be nice to have a 72-inch machine that today uses a 25- or 30-horsepower engine and power that machine with 9 or 10 horsepower? Think of the cost efficiency in terms of the cost of the engine going down, the cost of the fuel going down, the pollution going down. That is a tremendous challenge. So we need to spend a lot of time on other ways to cut the grass.

BW: Can more than 30 manufacturers continue to succeed manufacturing commercial mowers?

DS: The simple answer is no. We’ve already seen some major consolidation in the past year or two where some of the big have gobbled up some of the small, and we’ll continue to see that. It will be very difficult for the smaller manufacturers even though in this industry we’re not talking about expensive tooling to make a few hundred machines a year. But it will still be very difficult for the small manufacturer to capture the interest of the dealer, the distributor and the end user who are now becoming more sophisticated. The landscapers are getting this information on the Internet and they want more from us.

That is going to be very, very difficult for the 20 or so manufacturers to compete against the four or five of the biggies. And a biggie to me is a company that is doing around $100 million or more. That gives you the Textrons, Deeres, Toros, Blount, and now I’m running out of names. I would put us about about half way up there. The R&D that is required is expensive. Those prototype machines you saw today each cost us $250,000 to produce with the time, the labor, the engineering, the testing, the production drawing. If you have to make four or five of those to develop a new product, that’s a lot of money.

BW: Is your plan for Great Dane to remain independent?

DS: I can’t answer that. Obviously, there’s a lot of interest in our company – I will say that.

You have to understand I’ve found that part of the reason for my success is that I love to travel and to talk to people, especially landscapers. I love to understand what they would like, what their problems are and what they need. The biggest research facility we have in this industry is the world out there, and when I travel my contacts with the landscaper and the dealer help me uncover many, many things. They’re always saying, ‘I wish we had this, I wish we had that.’ And, I must admit, 90 percent of what I hear we can’t do because it’s too expensive. But the other 10 percent is doable and very, very challenging; and it’s that 10 percent that sparked me along the way to make the various improvements, to come up with the latest designs.

But, you know, the sad part of the bigger manufacturers is that they are so structured with an engineering committee and a research committee and a finance committee and on and on and on. No one goes across those lines, so the committees make decisions, and that means decisions take a long time. They will tell you that it takes them two to three years to come out with a new product. By that time, the idea behind the new product may have passed. We’ve got a committee, but it’s just a committee of one, and we can come out with a new product in six months. All I have to do is ask myself if a new product is necessary? Is developing it worthwhile? Will the end users accept it? Can we afford it?

BW: How had the development of Great Dane compared to your expectations for it?

DS: We have been much more successful than I expected. We think we’ve captured 10 to 15 percent of the market share of commercial machines with a cutting width of 21 to 72 inches. I had no idea three years ago that we would become as big as we even are today. In fact, if you would have asked me three or four years ago what I thought about becoming a $20 million or $40 million company, I would have said, ‘No way. I’ve done it before so there’s no challenge in it.’ Then I feel a tremendous responsibility to my employees, to their families, to the dealers and distributors who count on me, and the end users. I really feel a great responsibility to anyone who buys my machine, who puts their money on the table because they trust our reputation of doing a job and doing it well.

BW: How do you see outdoor power equipment dealers changing?

DS: The dealerships are changing a great deal. The dealer must change from where it was originally selling consumer products and a little bit of service since those consumer machines weren’t used enough to require a great deal of service. Now, major outlets like Wal-Mart and Home Depot are becoming very strong in consumer products and they can sell the machine at a much better price and easier terms than a dealer can. So I’ve seen dealers go from 100 percent consumer to probably 70 percent to 100 percent commercial products today. Those are your successful dealers.

Now, remember that it’s not just a flip of a coin to become a commercial dealer. Being a commercial dealer requires a good deal more money for inventory, a bigger facility to be able to display the bigger machines and, most important of all, what the successful dealers have learned is that being a commercial dealer requires a well-equipped service department. When a commercial machine requires any repair it isn’t cutting grass and the owner of that machine is losing hundreds of dollars when that machine is sitting in a dealer’s shop. Quite typically, you’ll see lawn mower operators who will go back to the shop that will give them quick turnaround. And the dealer can do that because they have good mechanics, effective equipment like hydraulic lifts and a good inventory of service parts. The dealer that can turn around a machine in only a few hours is going to be a successful dealer. The dealer who puts a tag on that machine and puts it in the corner for awhile is going to die on the vine.

BW: What does Great Dane need to do for continued success in the future?

DS: Frankly we need to mature. We grew very, very rapidly. We developed six or seven families and 25 or so different models in a three-year period. We have now filled the niches form the small machine to the high end, so we now need to consolidate, improve, simplify and reduce our costs of operation. We have very few tools – almost everything we do is through the computer from the drawings to the factory. This is very costly and very time consuming. We’re not currently very profitable because the cost of manufacturing these products is very high. But the cost to purchase components is about the same for everyone, although the larger companies may have some better buying ability than we have.

So our task for the next two or three years is to look very hard at what we can do to reduce the cost of the machines. We need to simplify them to get more operating hours out of them so people get more reliability. Improve the durability so end users have greater confidence in the machine. Then we can say our machine has zero defects and it will last for five years, and if it doesn’t we’ll fix it for you and we won’t charge you a cent. That should be the goal of this industry.

BW: How do you want to be remembered?

DS: When I retire, I will most likely continue to do what I do best, and that is remain active in design, improvements, new technology and stay on top of the challenges of looking for better ways to cut grass. I’ll probably continue that until I pass away.

I’d like to be remembered as someone who is interested in helping the other guy be successful. I’d like to leave a legacy of genuine friendship with the people I’ve worked with – landscapers, dealers, distributors, employees. And I’d like to be remembered as someone who played a part in improving people’s ability to earn a livelihood and provide for their families. That is a unique opportunity that very few people have the ability to contribute

You know, I think I could say without any lack of humility that every single landscaper in this country has heard my name. That’s almost like Bill Clinton, isn’t it? [laughs] And in some fashion they have heard that I have done something unique in the industry.