A Family Enterprise that Began at Kellogg
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Juan Rocha (EMBA 1995) founded DynaTrap in 2006 in Milwaukee WI. With the help of his son, John Rocha (EMBA 2020), DynaTrap grew into the leading mosquito control device company in North America, selling over two million units before being acquired by Woodstream Corp. in November 2019. Inside Kellogg had the chance to ask both of them about the unique challenges of family business and the process of going through an acquisition.
Juan, you launched DynaTrap in 2006. What was that process like for you?
The road leading to DynaTrap really started with my Kellogg education. As an immigrant from Mexico City, Kellogg provided me with the foundation to launch a career in the consumer products industry in the United States.
When I came across the core technology behind DynaTrap, I knew it was a tremendous opportunity that we couldn’t pass up. At the time, we owned a vinyl fabrication company, and leveraged all the resources we had to launch the DynaTrap brand.
We knew we had a special product, but the real challenge was taking DynaTrap to market. We started small, working with catalogs like Sky Mall, Frontgate, and Sharper Image, but over time were able to get into major retailers like Costco, Sam’s Club, Ace Hardware, and QVC, which caused the brand to really take off. My technical experience helped me build a great product, but it was my Kellogg education that taught me how to build a successful brand.
John, when did you join DynaTrap?
I initially worked with DynaTrap during the early days while I was still in high school, doing everything from refurbishing traps, to working the forklift. After my undergrad, I moved to the Bay Area to join a tech incubator, launch a computer vision startup, and then transitioned into management consulting for post-Series A companies, operating as an advisor or interim executive.
In 2016, my father approached me with the idea of rejoining DynaTrap, and having the opportunity to take what I learned in Silicon Valley and try and disrupt the insect control category. We were just starting to get major traction in the industry, and I loved the idea of helping grow what we started.
What nuances of family enterprise did you find thrilling or challenging?
Juan: We always kept an extremely professional relationship while collaborating on DynaTrap. Optics can play a major role in a family enterprise, and so a key advantage was that John had already established a career and network outside of DynaTrap that we could tap into. It was a win-win for both of us, and frankly, made the entire experience much more fun.
John: It is extremely rewarding to help a family business grow since there is a deep, personal connection. The key to our working relationship was to set expectations at the very beginning and hold each other accountable. Coming from a consulting background, I always thought of DynaTrap as the ultimate consulting engagement—one in which your success directly benefits those you care about most.
How did you know you were ready to consider acquisition offers?
Juan: For us, it was really a matter of timing. We were fortunate enough to become one of the fastest growing companies in the United States after 2016 by Inc. Magazine, and so we knew we had created something valuable. Our growth got to a point in which our team outgrew our offices and it was time to make important decisions that would impact the entire future of our company. Plus, the strong economy in recent months prompted a lot of activity in the M&A space that couldn’t be overlooked. After evaluating a number of offers, we decided that Woodstream Corp. was best suited to take what we had worked so hard to build to the next level.
The acquisition process can be notoriously complex. What are some of the lessons you’ve learned now that it’s behind you?
Juan: Nothing can fully prepare you for the arduous process of an M&A deal, especially when you have become emotionally invested in what you and your team have built. What helps is to surround yourself with the best possible people to help advise you during the process. In our case, we had a strong leadership team that was well-equipped to handle the due diligence process. Also, make sure you really like your investment banker, because you will be spending more time with them than you ever thought imaginable!
John: Always have a backup plan that you are genuinely excited about in case the acquisition doesn’t go through. This will give you a point of leverage during negotiations and help you sleep a little (but not much) better at night.
What advice do you have for others in a family business?
Juan: Sometimes, family relationships can help you recruit talent that you might not have otherwise had access to. In our case, I was able to recruit John away from the exciting Silicon Valley ecosystem to a tiny insect trap company based in Milwaukee Wisconsin. One of the great benefits of a family enterprise is that you can count on each other at any time, which is especially helpful during the eleventh hour of an M&A deal.
John: Setting expectations at the very beginning is extremely important, just like in any other organization. You need to understand what value you bring to the company, and what metrics you need to achieve to make it successful. Establish strong core values that serve as your North Star when tough decisions need to be made. Lastly, always strive to have fun—you have to love what are you doing to be a successful leader.
What advice do you have for other entrepreneurs considering acquisition?
John: You need to first determine the reasons why you are considering the acquisition. Perhaps your company is ready for a new trajectory or you would like to pursue other opportunities. From there you need to clearly define what a “successful” acquisition means to you. On the financial side, key factors might be valuation multiples and earn-out clauses. On the emotional side, you need to weigh the impact on your team and your brand’s legacy.
The reason why it is so important to precisely define and stay true to your acquisition goals is because when you are knee-deep in the exhausting M&A process, you will be tempted overlook deeply problematic nuances to simply finish the deal. Instead, stay true to what is important to you in the deal and always have a backup plan.
Juan: As mentioned before, you must surround yourself with the best people to help you navigate the process. That being said, your instincts and entrepreneurial spirit brought you to this point, so don’t be afraid to trust your instincts as you enter the final stretch of the acquisition.