Entrepreneurs Need to Embrace Adversity and Challenge, Says the CEO of Mecum Auctions Dave Magers discusses preserving a great brand's heritage while taking risks to grow its reach.
In this ongoing series, we are sharing advice, tips and insights from real entrepreneurs who are out there doing business battle on a daily basis. (Answers have been edited and condensed for clarity.)
Who are you and what's your business?
My name is Dave Magers, and I am the CEO of Mecum Auctions. Mecum Auctions is the world's largest collector car auction company, bringing approximately 22,000 lots to auction each year, spread out over 18 annual events across the country. Included in the offerings are classic and collector cars, antique motorcycles, antique farm tractors and auto memorabilia. In January of each year, Mecum holds both the largest collector car auction in the world in Kissimmee, Florida, and the largest collector motorcycle auction in the world in Las Vegas, Nevada.
What inspired its creation?
The business was started in 1988 by Dana and Patti Mecum around their kitchen table in Marengo, Illinois. Dana Mecum has always been a car guy and comes from a long car-focused lineage. His father was the largest fleet dealer in the U.S. at one time. Dana's focus, interest and expertise in the car business comes naturally from his family heritage. He is passionate about collector cars.
Mecum remains a family-owned company with Dana, Patti and their four sons all actively filling roles in the company today.
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What was your "aha moment" as you came in to extend the already existing success and vision?
For the first 24 years of Mecum Auctions, the organization achieved considerable success and was one of the leaders in the industry. However, the brand recognition and strength in the marketplace was not representative of the success of the business. Although Mecum was one of the largest in the collector car auction business, it was not the most recognizable brand. Starting in 2013, we began to make considerable investments in the brand and in Mecum as an entertainment company, not just an auction company.
Among many other things, we moved our TV programming to NBCSN to extend our reach to viewers outside of the traditional, hardcore car people. We built and launched a new website. We built a new stage and TV set. We launched a full-feature magazine. We built and launched a new auction management and online bidding system. We started our own transport and financing businesses. Many other investments in addition to these examples were made over several years.
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Often, investments in brands are difficult for an organization in that they require significant up-front funds over a long period of time with uncertain benefits that accrue much later. For Mecum, those investments made many years ago have driven the explosion of the company's success, particularly in recent years.
What has been your biggest challenge and how did you pivot to overcome it?
Of course, with tremendous growth comes growing pains. Growth requires change, and change is difficult for people. I remember reading the book Who Moved My Cheese? by Spencer Johnson many years ago during my career in the financial services sector. It is a great discussion on human resistance to change and how to overcome it. We engaged every employee in the process of planning for our future and the changes we were going to need to undertake. I think every employee felt they had input into the process and were invested in our success. Coupled with over-communication and extensive training, we have been able to avoid much of the resistance to change normally experienced in an established organization.
Of recent note, the most significant challenge we have had as a live event company was, of course, the pandemic. Mecum was in the middle of an auction at State Farm Stadium in Glendale, Arizona, in March of 2020 when the world came to an abrupt stop. We returned home to our corporate offices in Wisconsin not knowing what the future held in general, but specifically, what it held for Mecum as a live event organization.
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Over the course of two months, the senior management staff developed a strategy, changed processes and developed an 11-page safety protocol plan to allow us to safely return to live event auctions with in-person buyers and sellers. We began to shop our plans around to state and local health officials, governors, mayors and venue managers. Our planning resulted in Mecum returning to live events in late June of 2020. At that time, and for an extended period of time thereafter, we were not only the only collector car auction company holding live events, but the only company holding live events, period. More importantly, we were able to demonstrate that it could be done safely. As a result, our business expanded significantly in the last two years, helping us to achieve many event records and a world record for the most sales in one year by a collector car company and the most sales at a single collector car auction.
What advice would you give entrepreneurs for funding?
The key to funding for entrepreneurs is to look for strategic capital, not just capital. Regardless of whether it be equity or debt, look for a partner that brings something to the table besides just dollars. Look for partners that understand your vision, share in your enthusiasm for it, and are willing to customize capital programs to fit both your needs currently and in the future. The business is going to grow and change. Your credit or equity facilities need to have the capacity to be just as fluid.
When looking for financing, make sure you are clear in your description of your vision, what you intend to accomplish, how you intend to get there, and what the result of your efforts will be. Provide frequent detailed updates on progress. Be transparent to a fault.
I always handle the search for capital partners just like a job interview. Ask what your potential financing partners bring to the table that will benefit the organization besides just dollars.
We have been very lucky to have several very good debt partners providing fluid corporate credit facilities that are customized to fit our ever-changing unique business and needs.
What does the word "entrepreneur" mean to you?
Entrepreneurs do what they do because they have a passion for it. Yes, everybody in business likes to make a profit, but for an entrepreneur, I don't think that is top of mind. Successful entrepreneurs have an immense passion for what they do. They are not primarily money motivated. They are driven by their passion. They welcome adversity and challenge. They are nimble and creative. It's about building something and creating a legacy.
What is something many aspiring business owners think they need that they really don't?
You don't need to know and be an expert in everything. Successful business owners understand what they do well and what they don't do well. They look to surround themselves with those who excel at things they don't.
Is there a particular quote or saying that you use as personal motivation?
I live by several. I like to tell my staff, "Even the Constitution has 27 amendments." The point being is that you will never get it exactly perfect the first time. Everything is a work in progress, and there is always room to improve.
"You can never go wrong doing the right thing." My boss at my first job, when I was 15 years old, would respond to questions this way. For years, I thought it was his way of avoiding having to make a decision. Later in life, I realized how profound that simple statement was. Just do what's right, and in the long run, it will be the right decision.
Finally, my wife, Karen, and I have always lived by the motto, "Leave it better than you found it." We try to adhere to that in both our professional careers and our personal lives. No matter how much better, how small the improvement, if everyone were to aspire to that motto, the world would continue to improve.