Lance Cheney is an unlikely American business hero. He never wanted to go into business; he was an artist. He knew that if he was forced to find a boring business job, the last place he wanted to work was his dad’s Long Island brush manufacturing company, Braun Brush. But by the 1980s, he was broke, working alongside his dad, and hating it precisely as much as he thought he would.
Eventually, though, he adjusted and began to take the job seriously. He and his father, Max, would have lunch every day, talking about the business. Max was a 20th-century man; he believed that successful manufacturing required scale: getting better at making an ever-greater volume of the same products, producing them faster and cheaper. Lance—still the artist at heart—felt that the economy had changed and scale and volume weren’t a path to profit anymore. Braun Brush needed to go back to its roots in the 1800s and focus on creativity, coming up with new brushes to solve new problems.
Now, if you want to understand the rise and sudden fall of American manufacturing, brush making is a great model. Brush manufacturing was once innovative and profitable. As the country industrialized and became richer, there were countless factories, homes, and office buildings that needed to be painted. The dawn of modern hygiene led to teeth and hair, plus homes and factories, all being cleaned much more frequently by brush.
Then, in the early 1980s, China began focusing on global exports, and one of the first industries it decided to dominate was brushes. Brushes are simple—a handle, bristles, some material to affix them—and those first export-oriented factories churned them out. By 1986, the U.S. brush industry declared an emergency in a filing with the U.S. government. Since then, Chinese brush exports have increased steadily and American brush makers have shut down.
Braun Brush—Cheney’s family company—followed this path precisely. The company grew alongside the U.S. economy, specializing in brushes for the food industry—soft beaver-hair brushes to put chocolate on pastries; rough brushes to clean pizza ovens. By the 2000s, seeing his family firm losing ground, Cheney worked hard alongside his dad, clinging to whatever business Chinese competitors hadn’t swallowed.
Max died in 2003—working right up to his last days—and in 2010, Lance made a fateful decision, the one that makes him a model for the rest of us. He decided that he would not compete with China. He would make no brushes that were also made there. Chinese plants focused on the most popular brushes, so Cheney lost a lot of business and had to reinvent Braun Brush as an innovation machine. He and his designers created custom brushes to solve very specific problems. He made a brush designed for nuclear power plant piping, and a tiny brush for NASA that was used by the rovers Spirit and Opportunity to brush away dirt from rocks on Mars.
Every day, Cheney and his designers are discovering problems that can be solved with precisely the right kind of brush. Then they make that brush and sell it at a healthy premium. If any of their new designs takes off and is copied by factories in lower-wage countries, Cheney stops making it and finds something even newer. Braun Brush has had a remarkable decade since Cheney’s fateful decision to simply opt out of competition with China. It has grown by 20 percent each year. Oh, and it’s been a lot more fun.
IBM was the first company I noted that chose to opt out of competition with China. In 2004, it announced plans to sell most of its ThinkPad division to Lenovo, a Chinese computer maker. This seemed nuts. IBM had fought so hard to rebuild its brand as the leader in reliable, high-quality business laptops. But the company’s leaders saw what was coming: ever-more vicious competition in the laptop marketplace, fighting over pennies of profit. The company shifted focus to those things that it—and only it—could do, like creating massive supercomputers that could solve problems for companies and governments that no number of laptops could ever approach. (IBM’s Watson, for example, is used to model the human brain, help banks better understand financial risk, and win a lot of chess games.)
At the other end of the technological spectrum, General Pencil of New Jersey, one of the last American pencil makers, stopped seeking low-price school and big-box retailer contracts; let the makers of two-cent pencils imported by the container load from China take that business. General focused on artists willing to spend a buck on a truly well-made pencil.
There is going to be more trade, more automation, and more vicious competition in the coming decades. The most successful business people, like Lance Cheney, will be those who figure out how not to compete at all.