Risking It All
Alfredo Teran's
early career gambles paid off as he now leads AJT & Associates to
success in the aerospace and design-build industries
By Anne Straub
Brevard Technical Journal
A mounted wahoo adorns the wall of Alfredo Teran’s Cape Canaveral office, but it’s the not result of years of toil or practice.
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It’s about the only thing associated with the company where luck played a part.
Teran is chief executive of AJT & Associates, an engineering firm with an emphasis on aerospace work and design-build projects that he started with three other engineers in 1988. AJT’s growth eventually would land the company on such lists as the Inc. 500 fastest-growing private companies, but it would have to overcome early challenges.
The company was founded to focus on the Star Wars missile defense system promoted under President Reagan. Teran had worked on the project at EG&G Florida, but that company was ending its involvement in the technology.
Unfortunately for Teran, so was the U.S. government. Six months after starting the company, the project was canceled.
Teran laughs – now. At the time, he began the process of selling his house, liquidating his retirement savings and charging up the credit card in order to keep the business alive. His wife’s job kept the family afloat. Still, the struggling company had faith.
“There was never a sense of panic,” Teran recalled. The balance sheet got bad enough that the leadership team asked a couple people to start looking for other work, but in the end they didn’t need to leave. In desperation one day, Teran called the office of Bill Nelson, who was then a U.S. congressman. “I figured I never would hear back,” Teran said.
Instead, two hours later he got a call from Patrick Air Force Base. The base needed some work on a sewage treatment plant and called AJT on at the suggestion of Nelson’s office. “That saved us,” Teran said.
“Everybody was working for pennies on the dollar, but that contract led to a second one.”
Unlike many entrepreneurs, Teran clearly remembers those very unromantic early years of the business. He cautions people against looking at where the company is today, with its dramatic 40,000-square-foot headquarters and nearby lab, and idealizing the thought of being their own boss.
“It’s probably one of the most insane things anybody could ever do. We didn’t know any better,” Teran said. The responsibilities required him to develop a more cavalier attitude toward risk than when he bought first car in 1976. He lost sleep for a week because he was so worried about the debt. “If I were to feel the same way today, I probably would never sleep again,” he laughed.
Teran adds another reality check for entrepreneur wannabes: “It took me more than 10 years to build to the income I had at EG&G.”
Having navigated the early difficulties, AJT now employs about 150 people, down from a peak of close to 200, and generates $12 million a year in revenue. Part of Teran’s current growth strategy focuses on two distinct areas that began to separate from the core of the company: water and air traffic control towers.
Water
AJT’s interest in water treatment began 10 years ago and was tied to the shuttle program. The decision to focus on the area was simple and intuitive. “We have a lot of people who know a lot about water, and water has to be something important in the future,” Teran said. “That’s it – there’s no more to it.”
NASA set the company on that course when it contracted with AJT to study methods of recycling wastewater created after the parachutes used on the solid rocket boosters are retrieved from the ocean and treated. The company developed a water treatment and reuse system that has led to a product it markets to commercial laundry facilities: AJT says its TecH2Ozone was system reduces the amount of water and chemical needed to clean laundry, leading to lower costs and shorter wash cycles. Customers have included hotels and nursing homes in the United States and Europe. Dutch flower growers also are interested in the company’s products for use in purifying and reusing water.
In fact, water purification suddenly has become a lot more interesting in many areas. Two years ago, Teran said, AJT’s ability to purify water with a relatively small machine didn’t attract a lot of attention. Now in the aftermath of 9/11, the company is doing research for the military, and the Army is interested in portable water purification devices.
Applications are diverse: Teran is particularly proud of the company’s advancements in treating wastewater more efficiently. The company has tapped a major market for treatment systems to reduce industrial water pollution in South America. And back home, researchers are working on ways to purify Coca-Cola to neutralize runoff from the company’s bottling plants.
The market is so important to AJT that it formed separate company called Agrimond, after the name of the street where Teran grew up in Cuba. AJT is the largest shareholder in the venture. Teran points to the business interest as offering AJT’s largest potential for growth, possibly boosting revenue over $100 million within a few years.
Air traffic control towers
Although AJT continues to do work for the Air Force and Kennedy Space Center, Teran sought more diversification away from the space business. “It’s not a healthy environment for small companies to plan their future around,” he said. The government typically takes high-end, technical design work in-house, he said.
AJT developed a specialty in designing and building air traffic control towers partly because of engineers who joined the company with that experience. The niche has been the most profitable undertaking the company has made.
“When you stop and think how difficult it is to go and create a new market – I’m ecstatic,” Teran said. “We had the vision and timing to specialize in that area, and it has helped us tremendously.”
Towers will make up about a quarter of AJT’s business this year, and that proportion is poised to grow.
“There are a lot of airports that are really starting to get busy,” said Tim Shea, assistant director of commercial properties for Orlando International Airport. He managed Kissimmee Municipal Airport when it contracted for a new tower. That job was managed by AJT’s Brian Lally and became something of a prototype low-cost tower, Shea said.
More small airports need upgrades because general aviation and some corporate travel is moving away from the busier airports. The Federal Aviation Administration builds towers at airports that meet its requirements, but few make the list and for those that do, the wait can be long. “In order to react to the demand, the only real option is to build it yourself,” Shea said.
Both business sectors are a long evolution from Teran’s start. He left Cuba at age 14 after seven years on a waiting list for a flight to the United States. His family settled in New Jersey, where Teran earned a mechanical engineering degree from the New Jersey Institute of Technology.
His family acclimated better than he did, and Teran left the cold for a job with NASA in Florida. He started as a project manager – at 25, one of NASA’s youngest ever – for the Vehicle Assembly Building. He eventually left for EG&G, accepting a pay cut so that he could learn about the finance and budgeting side of business.
Even knowing that AJT would be a success, Teran is reluctant to say he’d do it all again.
“I venture to say that the average person would not give up what we had to give up to get to where we are today,” said Teran, who recently turned 50. He and his wife, Monica, have two daughters: Danielle, 18; and Samantha, 16.
“You can still be successful and do a lot of things without having to risk it all.”
For more information, see www.ajt-assoc.com.
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