All those AARP ads and pharmaceutical ads that claim that life begins at 50 should get in touch of Bob Stallings, CEO of Dallas-based Gainsco Insurance. Stallings, a driven, A-type, hyper-competitive and successful business man, has become one of the most successful team owners in American road racing somewhat by accident.
A few years ago, Stallings’ wife was trying to find a gift for her workaholic husband and milled about the idea of skydiving lessons or a four-day race school at the Bob Bondurant School of high Performance Driving. Bob muses, “At the time I think she figured being on the ground was probably a better idea.”
“It took me two years to actually use the gift and after Bob called and said ya gotta use it or lose it,” Stallings recalls from his top floor office overlooking Turtle Creek in Dallas, “I showed up, with no real idea what I was doing or going to get myself into and by the end of the first day’s driving I told my wife that I felt like I was 15 again.”
For years Stallings had climbed the ladder in Commercial Banking and Finance companies to lead a number of banks, “I sort of got tired of working for other people and decided to start doing my own deals. With a couple of close partners I bought a mortgage company and built it up and took it public, built it into a nationwide interest and sold it to Bank of America, We then took some of the returns from that and bought a mutual fund company in California that had a billion dollars in assets and grew it into a 40 billion dollar company then sold it to ING.”
Stallings large office on the top floor of the Gainsco building in Uptown Dallas has a long arching wrap around window on one side and dozens of art pieces dedicated to his passion and other business, racing. Says Stallings, “When we bought Gainsco, it was in a very conservative market of commercial business insurance, we looked at a number of different areas where we thought we could positively make some changes and saw the trends towards “Non Standard” auto insurance being a huge growth market.”
The “Non-Standard” market includes companies like Safe Auto, Progressive and others that specialize in the market of State mandated coverage and payment-centric sales where customers purchase their policies by the month rather than the year. Bob explains, “We are around 50% in the Florida market and the rest is spread out across the “Sun Belt” to Arizona-Nevada. We do some work in California and were looking at purchasing a partner there but mostly due to regulatory issues there we really don’t have that much business yet.”
What makes Gainsco unique is the way they sell their products, “Other companies spend hundreds of millions of dollars on TV Radio and Web advertising, we sell through independent insurance agents, most of these agents are heavily involved in their local communities,” says Andy Jordan, Vice President, “We spend considerably less than that but our focus is almost 100% on the race team.”
The race team Bob Stallings / Gainsco Racing has risen to be one of the most successful teams in Grand Am Prototype racing. Grand Am is a Rolex sponsored race series that features some of the best road racing which, unfortunately, is the much smaller audience base than the 800 pound gorilla that is NASCAR.
Their focus on road racing and Grand Am originally started somewhat by accident when months after his energizing introduction to racing at Bondurant, Stallings happened to be in the DFW area and read an article in the paper about Motorsport Ranch in Cresson. He and his wife drove out to the newly opened “Country Club for Cars” just south of Fort Worth just to take a look, and Bob decided to rent one of the open wheel Mazda powered Formula race cars for a few laps.
A few laps, a few more, a few more, then Bob just up and bought the racecar so he could keep going and going. “As things went on I decided to buy a Formula Atlantic car, I asked them to send someone who could help me get it set up and teach me more of how to race it. They sent Alex.”
Alex Gurney, the son of racing legend, Motorsport icon and one of the most accomplished American born racers in history, Dan Gurney, was a racer of considerable skill and finesse who never seemed to find the magic mixture to pull a top tier ride in Indy car or Formula 1 but was always inches outside of that world, began to tutor Stallings. A strong bond of friendship also was forged amongst the tire rubber and high octane.
“Alex thinks about racing 7-days a week, every hour every day,” Stallings begins to get animated when talking about his own racing but after Gurney suggested they team up to enter the new Grand Am Prototype series, racing became a really big business. It costs millions of dollars a year to be an uncompetitive “Gentleman Racer” but to be competitive on this level it takes total dedication and discipline.
“Our first few races I realized we really had something. The team we pulled together was not just competitive but potentially could be THE team, I also realized our weak point was my driving, so I fired myself as driver and went out to find the right people to take on the best teams in the business,” Bob says. Stallings competes with other team owners who have decades of success in building professional race teams. His primary competition comes from the well-known juggernaut teams of Roger Penske and Chip Ganassi.
Penske is the man behind the most winning team in Indy 500 history and his teams are perennial favorites in any format they compete in from NASCAR to Indy to American Le Man’s Prototype Racing. Ganassi also competes on multiple venues and will never put his teams in second as the super competitive team owner takes on multiple venues successfully as well.
Along with Gurney, Bob found road racing specialist John Fogarty and former Indy car Champion for Ganassi Racing Jimmy Vasser and multiple NASCAR champion Jimmy Johnson to drive the car and pulled together a small, dedicated crew of mechanics and race engineers. The team is not located in California, Florida or even Indy where you might expect but in a somewhat anonymous industrial park on the Highway 121 business spur just down the road from a Caterpillar Tractor Dealer in Lewisville Texas.
It is there a full time crew of four keeps the Chevy powered rear engine racecar ready for racing all over North America. The facility is large enough to pull the tractor trailer needed to transport the car, spares and all the other bits needed for race day inside and the crew can work undistracted by notoriety.
In many ways they have managed to pull off the unthinkable winning the championship in 2007, placing second to Ganassi in 2008 and repeating as series champion in 2009 in on of the most competitive series in Motorsports.
There are a lot of metaphors between racing and business some of them are the type that end up on cheesy motivational posters that extol the virtues of teamwork and dedication, but when you run on the fine edge of the knife blade that is top ranked racing, one person not doing their job perfectly can be the difference between winning and missing the podium all together.
For Gainsco, a publicly traded company, the investment in motorsports has to show a return financially. “There are three audiences for motorsports sponsorship. If you look inside our company, everywhere in our company and in every piece of correspondence the car is front and center, we are branding our company and we are trying to find a little bit of space in everybody’s head so the car is a branding Icon for us,” explains Stallings.
At a recent agent convention in Fort Worth the effect could really be seen firsthand as Vice President Andy Jordan showed Best of Texas around their display. Front and center is a Gainsco Racing Show car and an I-Race racing simulator. All of the giveaway bits and pieces have the car front and center as well. “Beats the hell out of a coffee mug and stress balls to get the agent’s attention,” Jordan smiles.
Jordan’s show staff puts attendees behind the wheel of the super realistic race simulator that drivers like Gurney use to practice. It is very sensitive and admittedly this writer may have had the most spectacular first lap in simulator history, peering into the screen and seeing the race track represented upside down as if the car was sitting on its roof, Jordan laughed, “Want to try that again?”
“Aside from our branding materials the show car and simulator crisscrosses the country going to our 4500 agents’ offices and helps them bring people in and helps us establish our name. We have heard from them that some of their clients may not speak English at all and will point to the car as their policyholder to communicate when paying their bill,” Andy explains, “The agent base is really the primary audience for the race involvement with top performers being hosted at race venues as an incentive for sales, “some companies do Cruises or golf weekends for us it is all about the racing.”
Television audiences and race day attendees are another focal point but as Jordan points out not the primary. The race coverage on Speed TV is fantastic but the majority of the people who watch are not necessarily in our market space. The folks at speed are really good at breaking down the “Impressions” and number of times the car is featured on TV and quantifying that information. Let’s face it leading the race and winning the race puts that brand impression ratio really high.”
“We would do this even if it didn’t work for the agent base,” says Stallings, “We would still do this for our employee base, it provides an identifier and a point to rally around and incentive to excel. We market to our employees the idea of being part of a high performance company team that is capable to take on bigger competitors. In racing it is the Ganassi and Penske’s we are able to compete with and are still able to win. We tell people we have a secret formula for being able to win in racing we have proven we can beat anyone, even though we are an itty bitty team, the secret is to find people who are dedicated to being able to be better at what they do in their job than the competition.”
In racing it is being a better pit crew, wheel changer or mechanic being better than their competition in the next pit stall at Penske. This is a highly portable concept and in business it is being better at providing the product service we do. We can’t achieve our objectives in this business if everyone isn’t aware that their effort has a direct impact on the entire company”
Stallings Secret Formula seems to be working, “We have grown revenues from 30 to 150 million in 5 years. Last year we did 173 million writing on average 200,000 auto policies a year.” All this from a company that most people in Dallas may not have heard of.
This year sees the Bob Stallings Gainsco Race team fighting for second place, as Chip Ganassi’s BMW powered entry has been the class of the series this year. “It is not because just because the BMW is producing more power, which it is, they are just doing their jobs better than everyone else in the series,”
Two of the four drivers race every race; John Fogarty and Alex Gurney are the full time drivers. JJ (Jimmy Johnson) and Jimmy Vasser run only in the 24 hours of Daytona, “Vasser has brought so much experience to the team both inside and outside the car and even with JJ’s background being primarily oval stock car racing he is such a competitor and brings such a huge fan base with him he just lives for this stuff.”
Part way through the 2009 season in Grand Am Racing a federal bankruptcy court negated their major corporate Sponsor and engine supplier agreements with General Motors. By the time the year ended the then Pontiac powered car found its “Brand” relegated to the automotive history bin but the beginning of this year Stallings Race cars have been retagged as Chevy’s and with a very small team continue to take on some of the big teams and continue to have success.
All as the result of a Christmas gift, almost makes you wonder what would have happened if Bob’s wife chose the parachute option.