Amazing?” Shane Olson asked in astonishment. “No, it was terrible.”
What was amazing was the tenacity he and his business partner showed when their start-up company Shercom Industries took a nose dive after only a few months in the early 1990s. Instead of giving up, they took night jobs welding for a farm equipment manufacturer. During the day they experimented with new equipment designs and product development to keep the project alive.
But the point is well taken.
As a recent graduate from university in agricultural economics, taking on a start-up to re-process automobile tires into useful products was a unique choice. But there’s no question it was an idea whose time had, or was about to, come. In some ways, says Olson, Shercom was ten years ahead of its time. The technology to shred and process rubber from vehicle tires wasn’t really there. They would spend a decade refining the techniques and overcoming some remarkable hurdles to bring Shercom into the stability it enjoys these days.
“After nine months of the night welding we quit those jobs and focussed on trying to sell products,” says Olson. “The rubber automotive ramps [the sort on which you drive your car so the front end is lifted] got national distribution. We were also making the wheel chock.”
There is more than a hint of farm ingenuity about the Shercom plant. Recognizable tools—like grain augers—emerge from the heavy industrial machinery that stands floor to ceiling. There is lots of heat and dust—the kind of by-product you’d expect when rubber is being shredded, sliced, sifted for the steel belts woven inside, and compressed into objects for the playground, garden, and large scale industry.
For Olson, the farm was actually a good training ground. Innovation has played a key role in developing techniques for processing tires. And the never-give-up farm attitude has been essential.
By 1998, one of the biggest problems facing the company was finding enough material. That year, Olson’s business partner left the company. On the upside, changes to the law identified whole tires as a waste product. Levies on tires would be used to collect tires and Shercom got a license to reprocess them. That same year Shercom was licensed as a collector. The issue of getting enough raw material was resolved.
Olson purchased a new shredder in 2000 but it did not work. Another new one was leased and the company started shredding tires into two-inch pieces in the fall. New legislation came in 2002 that reduced payments for reclaiming tires by 45 percent. That was a significant blow to the bottom line.
The industry was finally seeing the technology emerge that would make new products possible. Shercom made the investment in early 2002 and had it set up by mid-summer. Olson made a sale of the new “crumb” product. Things were looking good. Then came the fire that destroyed everything...