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July 16, 1999/3 Av 5759, Vol. 51, No.41
Entrepreneur makes big splash with Australian invention
CHRIS GARIFO
Staff Writer
Alan Auerbach wanted to appease his wife. What he got was a new business.
The textile manufacturer and homebuilder had decided in mid-1997 that he needed to move from New York City to Phoenix to be nearer to the Valley's booming home market.
"I said to my wife, 'We're going to go to Phoenix to be closer to the building,' " Auerbach says. "That wasn't her first choice of things to do."
To mollify his wife, Marcie, he offered to take her with him in July 1997 on a business trip to Asia, where most of his textile customers were, stretching the trip from the week he normally would take every other year to three weeks, to include a vacation in China and Indonesia.
While staying at the Amandari Hotel on the island of Bali, Auerbach spent a lot of time swimming in the pool because of the heat. He noticed that the pool's water didn't irritate his eyes and that the water was salty. He thought it was strange that a hotel on a mountain would use ocean water in its pool. The hotel manager explained that it wasn't seawater; the hotel put salt into the water to clean it, using a system bought from a company in Australia.
Over the next couple of weeks, Auerbach found the system's manufacturer, who told him the systems were sold in the United States through an agent, who Auerbach learned also lived in Arizona. Auerbach paid $1,600 to put the system on to the pool of the house he bought in Scottsdale. He liked the results so much, he also had the system installed at two Valley homes he was building "on spec" (without an advance buyer, on speculation they will sell).
"Those pools were perfect," Auerbach says. "I realized that this guy had a device that was fantastic, but he didn't have the wherewithal to market it properly."
Together with a friend in New York, Robert Fagenson, Auerbach acquired the North American rights to the system from the manufacturer, and Pool Thing was born. Pool Thing is marketed by Environmental Pool Systems, a subsidiary of Auerbach's Manhattan-based family-owned business that originally produced, and still does, textile trimmings for shoes, women's garments, handbags and accessories. Auerbach also remains in the homebuilding business, but is now most heavily involved in the Pool Thing operation.
With his new business, Auerbach has to deal much more with the public than he did in the family textile business, and the hours are grueling, he says.
"It's really tiring; it's a lot of work," Auerbach says about being the president and chief executive officer of Pool Thing. "(In the family business), we supplied textiles for the footwear industry and the handbag industry, so I didn't have to deal with the public at all.
"And, it's much easier because at 4:30 (p.m.), everybody (in textiles) goes home; nobody works on the weekends, and nobody calls you with minor complaints. In this business, the public calls all hours of the day and night, and they want to be satisfied now, even when there's nothing to do. So it's a whole different way of doing business for us."
Also, he knew a little bit more about textiles than he did about the pool-cleaning-system business, at least when he got started.
"What's a Jewish boy from New York know about swimming pools?" he asks. "I thought they were a hole in the ground filled with water. I didn't even know about pumps, filters, any of that stuff. I really am a New Yorker born and bred. I know how to hail a cab, and that's about the level of my technical expertise."
He says sales are growing and are averaging 50 units a month now. In eight to 10 years, he says, he hopes to hit $35 million in annual sales.
"This has turned into something, it's blossomed," Auerbach says. "We have salesmen in Los Angeles, Seattle, here in Phoenix. We are in hotels in 18 or 19 states."
He hopes to also sell Pool Thing in Spain, Thailand, the U.S. Virgin Islands, Guam and the Caribbean.
"We like to tell our customers that, because this is an almost 50-year-old (parent) company, we've put our money where our mouth is," Auerbach says. "We didn't set up a new company that can go broke on them. We (made it a subsidiary of) our family company, and we stand behind it."
Auerbach says Pool Thing's manufacturer in Tallai, Australia, is surprised at the fact that the system may be just weeks away from getting NSF Inc. (formerly the National Sanitation Foundation) certification, which would certify that the water running through it is safe for consumption. Other, larger makers of similar salt-water pool systems have been unable to get such certification.
"What we've done is gone to the U.S. market and seen how it differs from the Australian market and adjusted the product to suit the market," Auerbach says. "Once you follow what the market wants, then the rest is easy."
He says the manufacturer has modified the equipment to meet the specifications Auerbach and Fagenson, now a member of the company's board, have called for.
"We've changed the control system; we changed the metering system on it; we're working on a new design for the electrodes, which is the heart of the system," Auerbach says. "The machine is built to our specs. ... We've modified the machine somewhat to satisfy (NSF) requirements."
Auerbach's life also has been modified. He and his wife have joined Temple Beth Israel in Scottsdale. Marcie spends the summer at their Atlantic coastal place in New Jersey. He goes there on weekends. He says the move from New York to Arizona has been tough on Marcie.
"She misses her friends, but she's building new (friendships) here, so she'll like it here more," Auerbach says.
He says switching from Manhattan's Congregation Emanu-El, where he has been a member for most of his life, to Beth Israel required some adjustment, because he found that, though both are Reform congregations, Beth Israel is "much more conservative than I've been used to."
Auerbach, like his father, has an economics degree from the Wharton School of Business at the University of Pennsylvania. Prior to coming out to Phoenix about five years ago with a business partner to check out the booming home construction market, he says he hadn't been in Valley for 25 years, since he was in college and vacationed in the area with his family.
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