Ken Chaletzky - Founder of Copy General in the U.S.

Prior to this post, I posted an article remembering Paul Panitz, founder of Copy General in Europe. Below, I’m posting an article that was written in 2013 about Ken Chaletzky. Ken, along with Dirck Holscher (former owner of the Larry Hunt Newsletters), was the founder of Copy General in the Washington, DC area, was friends with Paul and was one of the owners of Copy General in Europe. This article mentions Roman Petr, who is still, today, the Managing Director of Copy General in Europe. (Roman is one of the smartest people you will ever meet.) “Ken Chaletzky - The Trailblazer” Article By Gordon J. Bernhardt, CPA, PFS, CFP®, AIF® - About Gordon J. Bernhardt President and founder of Bernhardt Wealth Management and author of Profiles in Success: Inspiration from Executive Leaders in the Washington D.C. Area. Ken Chaletzky’s father was in real estate. His father’s father was in real estate. His uncle and brother followed suit as well. With three Chaletzky generations diving into the field, Ken’s path seemed like a given. “All my life I thought I would go into the family business,” he recalls today. “That’s what I was groomed for. That’s what I expected.” After graduating from George Washington University, he headed down to Florida to begin working with his uncle, building condominiums and single-family homes. But what was supposed to be the beginning of a long, safe career working for a well-established family business lasted only a year and a half before Ken decided he needed to make his own way—a decision motivated by frustration with the family’s reluctance to embrace new ideas. “My uncle bought two lots that were only a block away from each other. And I said, ‘Let me handle one of them. I’ll use the same budget, and I’ll see what I can do with it.’ So we took the same model house, and I took some money out of certain areas and put it in the kitchen instead. I put in a self-cleaning oven, which was pretty novel back then, as well as an icemaker in the refrigerator and a few other things. To make a long story short, my house sold before it was finished being constructed. My uncle’s house, which he built the way he built all the others, didn’t sell for a couple of months after it was finished. And when it came time to build the next house, he still wanted to build it the old way.” Ken knew his need to innovate wouldn’t be satisfied in such an environment. He needed to trailblaze. With that, he headed off to the University of Pennsylvania’s MBA program, the Wharton School, with dreams of starting his own business. Today, Ken is the President and CEO of Copy General (CG), an innovative, industry-leading operation. Through a series of joint ventures, there are now 50 Copy General locations in five countries. His commitment to looking over the horizon has served him well in the ever- evolving copy business, and he’s worked hard to remove himself from the daily operation of the company so as to focus on its direction and evolution. “My job is to make sure we’re here five years from now,” he says with a smile. With this commitment in mind, Ken has led Copy General through several iterations. Today, Copy General is an all-digital printer specializing in technical documentation, direct mail marketing, training and education materials, but ever looking forward, it is committed to keeping pace with new technologies. “It isn’t what a layperson might think of as a traditional copy shop,” he points out. “Offset is what most people think of as ‘printing,’ with liquid inks, plates, and big monstrous presses gobbling up lots of paper. We don’t own any offset printing equipment—never have, never will. Instead, we print with large digital presses. In fact, we just took delivery of the Xerox iGen150, the first in the United States. At 32 feet long and about 4 or 5 tons, it prints very high quality color at 150 pages a minute. That’s where we invest our money—in new technologies.” That investment pays off in spades, as it allows Copy General to keep pace with the fast turnaround their customers have come to expect of digital services. In an industry that Ken estimates has shrunk by at least a third since its peak in the 1990s, the story of CG’s survival and success has been a series of leaps into the unknown. Although the company wouldn’t exist for years to come, the story begins back at George Washington University (GW), where Ken worked on the campus newspaper, The Hatchet, selling ads. Ever committed to his clients, his introduction to the printing world was almost accidental. “I was always on the business side, and I knew nothing about printing,” he remembers. “But I could envision what the customer wanted their ad to look like, and I didn’t know how to explain it to the printers. I taught myself how to use the equipment so I could make the ads up myself. To me, that was faster than trying to explain it to someone and saying, ‘No, not quite like that.’ So that’s how I ended up as the production manager and learned how to use all the equipment.” Just as fatefully, in 1969, Ken decided to hire an assistant, and the man for the job turned out to be his future business partner and Copy General’s co-founder, Dirck Holscher. In 1974, after graduating from GW and undergoing his short tenure in real estate, and after earning his MBA at Wharton, he and Dirck founded the first CG—Circle Graphics, a typesetting company. A few years after that, in 1979, they took a second leap. The copier in Circle Graphics’ Georgetown office broke down, and an employee was sent to make copies at the local copy shop, only to find it had shut down. “Oh, darn, perhaps we’ll have to start one ourselves,” Dirck had said half-jokingly, and an idea for expansion was born. The partners called their new business Copies of Georgetown, cannily preserving their CG logo and saving money on advertising. “We made about every mistake you could make, but we started to refine the model,” Ken details. “At one point we were the largest copy chain in Washington, with six stores all over the downtown business area, from Georgetown to the Air & Space Museum.” By that time, the name had changed to Copy General to reflect the growing size of the business and because, with the success of big companies like General Electric and General Motors, “general” was a buzzword of the day. Business suffered during the 1989 recession, but the partners again adapted. A site originally used for overflow work out in Sterling, Virginia, had to become self-sufficient as business dried up, and a team was sent to expand sales into Virginia. The effort was successful, and Copy General was officially operating outside D.C. The next leap took the business much further afield. Ever cognizant of the next opportunity, and ever eager to stay on the cutting edge, Ken received an offer too exciting to refuse. “My old editor from The Hatchet had sold his typesetting business and had a big chunk of change,” Ken remarks. “He was over in Eastern Europe when the Berlin Wall came down. He saw opportunity in the Eastern Bloc as a result of the fall of the Berlin Wall and came back to us and said, ‘How would you like to open a copy shop in Budapest?’ We thought he was a little nuts, but it was his money and our expertise, so we thought, “What the hell. This is going to be a lot of fun!’” Opening a business in Eastern Europe right after the collapse of the Soviet Bloc was hardly an easy feat, as it turned out. “Everything that had to be done, had to be done without a safety net—without any existing structures of support, or any models to look to for guidance,” Ken explains. “It took us a long time to get a store open, because in communist countries, there is no real estate because the government owns everything. You can’t just go to a commercial real estate agent because that infrastructure doesn’t exist, and there was very little retail space in Budapest. It took us almost a year before we finally found a retail location, which we dug out of the basement of an apartment building. But when our first store opened in June of 1991, it was an immediate success. People were lined up out of the door and down the sidewalk for the opportunity to make copies.” Their decision was bold enough to attract the attention of the New York Times, and the Sunday magazine wrote an article about their endeavors. After that initial success, the business continued to grow. In 1992, CG, now Copy General, opened another store in Prague. A year later, they made their debut in Warsaw, and in 1995, they opened their first store in Moscow. As with its adaptability back home, CG didn’t go into Eastern Europe expecting to copy and paste its success in the US. “A number of American franchises tried to set up operations there and were not successful,” Ken recalls. “The reason was that they came in with the American model and said, ‘We’re the Americans. We know how to do it, and here’s what it should be like.’ That approach doesn’t work. We, on the other hand, adapted to the locale we were in.” A big part of that adaptability involved getting to know the people who would be their customers and, in some cases, their employees. Paul Panitz, the former Hatchet editor who had put up the money for the expansion, insisted that they become a part of the community. “We were not allowed to stay in hotels, because how can you expect to build a company with these people when you’re staying in a hotel that costs nightly what they make in a month?” Ken poses. “Instead, we had a company flat in the working class area where our first store was, and that’s where Paul actually lived for 2 or 3 years.” Ken himself took the idea a step further and stayed on the outskirts of Budapest with a local family, who he remains close with today. “I visit them every time I go over there, and we ended up hiring their daughter and son-in-law to work for us,” he says. Today, CG’s overseas businesses are locally run. The managing director in Europe is a Prague local, Roman Petr. Another couple working with Paul to start the Czech operation were attempting to order some bread at a local bakery when they met Roman, a young man working in the back who spoke a little English and helped translate. “The next day they came back to get fresh bread, and there was a note waiting for them. It began with the words that sort of live in history with us now,” Ken recalls laughingly. “‘I am the boy from yesterday...’ Roman offered to be our translator and guide in Prague. Now he runs the whole operation, which has 500 employees and grosses as much as $50 million a year. He is brilliant.” Roman is only one of the many employees who have grown with the company across years and decades. “I’ve been fortunate that I’ve been surrounded by great people,” Ken avows. “My current comptroller, for instance, has been with us almost 30 years. It’s the only job he’s ever had, I trust him absolutely. And the General Manager, Laura, has been with us over 20 years. People don’t leave us. I like to think it’s because we’re a good place to work.” This staying power is generated through Ken’s leadership style, which revolves around the central theme of trust. He never micromanages, and instead allows his employees to figure out their own schedules. As long as the work is done, he has faith in their ability to manage their time. “I don’t often think of myself as a leader,” he says modestly. “I like to think that what I’m good at is finding good people, and then I leave them alone! I give them goals, and I may give them some guidelines in terms of budgets or what have you, but aside from that, I don’t check in with them every day.” He thinks of this style of management as being goal-oriented over process-oriented, and it’s served him well. When reflecting on where he may have learned to take such leaps of faith in business, Ken cites his grandfather’s influence. “While my father was more cautious, my grandfather was one of the great wheeler-dealers in real estate,” he affirms. “From him, I learned the value of risk taking.” His mother also influenced him deeply, teaching him to be self-reliant and responsible. “She didn’t go to college because there was no money for college in her family, but she was very, very bright,” he says. “She loved books and read a book a day.” He’s also continually inspired by his brilliant 29-year- old daughter and compassionate 26-year-old son, who is currently teaching children on the autism spectrum. As he admiringly reflects on his son’s work, he is quick to advise young people entering the business world today not to feel pressured into doing what’s safe or what’s most lucrative. He remembers meeting an old man during his unhappy year in Florida working in real estate, and relays the same advice he received then. “He told me something, probably when I was moaning and groaning about how miserable I was down there,” Ken recalls. “He said, ‘Do what you want to do. Do what you enjoy, and the money will follow.’ There are too many kids coming out of school today, especially business school, that focus on questions like, what’s the biggest offer I’m getting? Where am I going to make the most money? A lot of them don’t end up happy. It’s more important to focus on doing what you enjoy doing, where your interests are, where your heart is, and not worry about the money. The money will follow.” By following that advice, Copy General is today one of the leading all-digital printers in the area, and the largest in Loudoun County. “We have some of the most advanced technology, especially for a company our size,” Ken points out. “We have a full time software development team, and we’ve designed everything ourselves. We didn’t want to wait for other companies to decide to make an upgrade, or charge us outrageous amounts.” That philosophy of not waiting on someone else and instead taking up the reigns oneself has characterized Ken’s journey since he began printing ads himself at GW, and has stayed with him throughout Copy General’s expansion, evolution, and growth. He may not think of himself as a leader, but he certainly has never followed a prescribed path, committed instead to blazing his own trail.

Remembering Paul Panitz, Founder of Copy General in Europe

REMEMBERING PAUL PANITZ, FOUNDER OF COPY GENERAL IN EUROPE. (Paul passed away in 2008.) THE ARTICLE BELOW WAS PUBLISHED IN THE NEW YORK TIMES IN January 1994. “East's Copy King Duplicates U.S. Success: A Forint-Pincher Thrives” By Henry Copeland, International Herald Tribune Jan. 3, 1994 Asked about his black Converse All Stars, Paul Panitz, a 46-year-old millionaire, volunteers that they cost $19 five years ago. Later, he recalls buying an office chair for $50 at a 1981 auction. And on a given afternoon, he may be found in a copy shop not far from the Danube River, reminding employees that a copy machine uses six times less toner when operated with its lid closed. "Sometimes Paul is too cheap, but if he weren't cheap we wouldn't be getting ready to open our fourth store in Budapest," says Erno Duda, Mr. Panitz's 25- year-old protégé and co-owner of Copy General Hungary. In a business where margins are paper thin, Paul Panitz's frugality has made him the king of copying of Eastern Europe. Since his first store opened in Budapest in June of 1991, Mr. Panitz has opened three more Copy General shops in Hungary, two shops in Prague and one in Warsaw. In the process, he has surpassed in size the six-store Washington D.C. chain from which he borrowed Copy General's name and initial expertise. Soon, new Copy General shops will open in Budapest, Prague and Plzen. Copy machines - once kept under lock and key to prevent them from spawning samizdat, or underground publishing - are humming in Eastern Europe. Demand has been so great that all but one of the Copy Generals here have broken even in operating results after four months, compared with an industry average of nine months in the United States, according to Mr. Panitz. Copy General's Budapest flagship now spins through eight kilometers (five miles) of paper every month, and one of the Prague shops recently completed an order of 2 million pages for a corporate training manual. But oddly, while Copy General has multitudes of small competitors - almost every stationery store here sports a desktop copier - its enterprises constitute the only chain of full-service copy shops in Eastern Europe. Copy General's uncontested position in its category is a measure not only of Mr. Panitz's business acumen, but his willingness to persevere through tribulations that have thwarted others. Steve Haas, 32, who helped launch Copy General in Poland and the Czech Republic, notes that in the United States "you can pick up a telephone, call an attorney and get incorporated in 24 hours, then have office space leased and furniture brought in another 24 hours." In contrast, says Mr. Haas, "these things we spent months trying to achieve here." Still unable to secure a telephone line for one Budapest store, Copy General will soon install CB radios. Mr. Panitz came to Budapest in September 1990, looking for something exciting to do with himself and some of the $1.7 million he had earned from selling Unicorn Graphics, a printing business he started in Washington D.C. in 1971. After an unsuccessful two-month search for a site for the copy shop he hoped to open, Mr. Panitz tried to negotiate a joint venture with a Hungarian copy firm. This too failed. In another attempt to locate premises for a business, he resorted to walking the streets and putting notes on the windows of vacant stores. Nearly seven months after his arrival, Mr. Panitz finally found a basement on the southern fringe of the business district. The location was not great and the landlord wanted five years rent, up front, but Mr. Panitz had little choice. In addition to the advance rent, Mr. Panitz had to pay cash for his first copy machines, bringing his total outlay for the first store to $380,000. Revenues were $121,000 for that store's first six months of operations. Now, monthly revenues for all operations have swelled to $340,000 as customers have lined up to take advantage of the company's long hours and attention to detail. Copy General shops have been so profitable that, with the exception of one $100,000 loan, each successive store has been financed by established stores.