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What I’ve Learned: Rick Sontag ‘66M.S.

Sontag

I had two major epiphanies in my life that led to where I am today. The first happened at Nevada when I was a graduate student in physics. I worked for a summer at the Desert Research Institute where, rather than working on my laboratory project, I often spent my time asking people about how the operation worked and how they received grant money from the government. I was more interested in the management side of science, instead of actually doing the science. Based on this my uncle, a professor at Pomona College (Claremont, Calif.), advised me to apply to business school. So I did. Although shocked at my decision to pursue business, my physics adviser, Dr. Philip Altick, wrote a recommendation for me. I applied to Harvard, Stanford, Columbia, Wharton and MIT, and was accepted at four of the five schools. I attended Harvard, earning an MBA. At Nevada, I realized I had other aptitudes, such as people and organizational skills, which led me on a career path that would make me happy. My wife, Susan, thought she was marrying a nuclear physicist, but I was not fulfilled working in a lab all day. She soon adjusted to my new career direction.


After graduating from Harvard, I held a variety of sales and marketing positions for companies in the scientific, medical and industrial fields. I received several promotions and helped improve sales at most of these companies, but I also got fired three times. My second epiphany came after the third firing when I realized I didn’t do well working for other people. So I decided to go into business for myself. In the early 1980s, Susan and I bought a small aviation component company in Rockford, Ill., with our life savings of $50,000, a second mortgage on our house, and an $8 million loan.


Susan and I experienced tough times with our company in the early years, especially when cash was short and the economy suffered major recessions. During those times, I learned that in order to survive a significant downturn you need to stay the course and give your business plan a chance to work. Too many people throw in the towel too early and give up before they know if their business concept can work long term. There were so many times when I experienced significant problems—like losing a large customer or having a major product problem—that I devised my own coping mechanism. I called it the Sontag Rule. Give yourself a maximum of three days to cry and grieve about the issue. Then get on with recovering from the problem and managing the business. Letting serious problems affect your mental state and decision-making for too long can be a major impediment to finding the next opportunity.


I would advise young graduates entering today’s difficult job market to find any kind of employment just to get started, even if that job is not in your chosen field or you think it is less than what you had hoped for. Any job will give you career experience; it will test you and show people your work ethic. View it as a stepping-stone. And who knows? It might take you in a direction you never thought of. Even in economically tough times, there is always something positive you can build on. And experiencing a little hardship is not necessarily a bad thing. It can often lead to changes that put you on the path to success. For me, getting fired was devastating when it happened. But over time, it built my resiliency and led me to make a major career change. I don’t think that I would have taken the course I did without it.


There is no doubt that I would not have succeeded in business without my strong partnership with Susan. She once considered law school. But when we got married, she decided to find a position to help earn money immediately. After college, she took courses and became a freelance court reporter. That allowed her to work from wherever we lived (i.e. Reno, Boston). From the start, Susan’s financial support got us through the tough times. She put me through Harvard and worked during the times I was fired. She ran the household and raised our kids. She was even my assistant for a while during the early years of our company. She was the foundation of our family and the one who made it possible for me to do what I did.
During the bad times Susan and I occasionally talked about what would happen if the business failed. I told her that we would likely lose all our material possessions. The good news, however, was that we would still have our education and each other. We could lose all our money and our house, but we would have the foundation to move on and start over. We always had to be realistic about the risks.


We came close to losing it all. With the severe recession in the early 1980’s our sales dropped from $8 million to under $4 million and we were forced to shrink our work force from 225 employees to 65 employees. But we survived and grew. By 2002, we had built our company into an international market leader with $200 million in sales and 1,500 employees. That year we decided to sell the company to General Electric.


In 1994, Susan was diagnosed with a terminal form of brain cancer. She miraculously survived. So when we sold the company, we started The Sontag Foundation and initially focused on funding medical research related to brain cancer. Since my mother died from complications from rheumatoid arthritis, we later broadened our mission to include medical research for that disease. And few years ago we expanded the mission even further to include sponsorship of organizations in Northeast Florida which focus on self reliance. Today, our foundation is the largest private funder of brain cancer research in the U.S. It is also a major supporter of northeast Florida charities ranging from battered women’s and homeless shelters to centers for the developmentally disabled. We also advise nonprofits on operational issues. Today philanthropy is probably the most satisfying thing I do.


Our gifts for education have been more personal interests of Susan’s and mine. We have funded dormitories at both Pomona College and Harvey Mudd College. Our recent gift to Nevada to establish the annual Sontag Entrepreneurship Award was something I had wanted to do for a long time. The award will provide $50,000 to a student or group of students who demonstrate an ability and intention to start or expand a business. I hope it encourages the entrepreneurial spirit in Nevada’s students and drives them to want to succeed. If Susan and I can inspire people by our award or our story to take that step to succeed, then we think we’ve achieved our objective.

 

From a conversation in September with Kristen Kennedy, College of Business development director, and Crystal Parrish, director of foundation operations. Sontag earned a bachelor’s in physics from Harvey Mudd College, a master’s in physics from Nevada, and an MBA from Harvard Business School. He is president of Spring Bay Companies, a venture capital firm, and board president of The Sontag Foundation. For 22 years, he headed Unison Industries, a market leader in aviation engine components, which he sold to General Electric in 2002. His wife, Susan, graduated from Pomona College with a bachelor’s in government. Diagnosed in 1994 with brain cancer, she is a 17-year cancer survivor and the inspiration for the formation of The Sontag Foundation through which the Sontags support medical research and “self-help” organizations, and have given generously to their alma maters, including a recent $1 million gift to Nevada to establish the annual Sontag Entrepreneurship Award.

 

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