WILD WILD WEB Entrepreneur Recycles Lives

by Susan Karlin - April 08, 1999

Twenty years ago, Gerald Chamales was homeless and unemployable, stumbling around Los Angeles' Venice Beach in a drug- and alcohol-induced fog.

Today, at 47, he's the president and CEO of Omni Computer Products, a $30 million computer parts enterprise in Carson, Calif., just outside Los Angeles.

That he crawled out of hell is a testament to his sheer will power and entrepreneurial vision. But even more remarkable is how he uses his business to pull others out of despair. A third of his 304 employees are former homeless people, felons and drug addicts--most of whom credit their second chance at life to Chamales. Along the way, the company has grown an average of 20 percent a year and expects to hit $30 million in net sales in 1999, proving that good will and fiscal success are not mutually exclusive.

Under its Rhinotek label, Omni manufactures new and recycled computer consumables such as laser and ink-jet printer cartridges, as well as supplies like diskettes and paper. Rhinotek's clients include Disney, Delta Airlines, Citicorp, MCI WorldCom and the White House. The Rhinotek name was chosen because the rhino connotes resilience and toughness. Coincidentally, the label fits the company's pet charity--saving African wildlife. Omni donates about $25,000 a year to a Kenyan preserve.

In addition to its two Carson factories, Omni will soon open another telemarketing branch in nearby Rancho Dominguez. It also will sell products on its Web site (www.rhinotek.com), as well as through grocery and office supply stores like Ralph's Supermarkets and Staples. Chamales, who owns the entire company, will be weighing several growth options over the next two years--everything from buying smaller companies, merging with another company or going public to raise funds to buy several competitors and strengthen his share of the potential $25 billion worldwide market. If Chamales decides to take Omni public, he will be giving stock options to employees.

Chamales was born with a creative and entrepreneurial mind (his father wrote a novel, Never So Few, that was made into a movie starring Frank Sinatra). But his parents split when he was 2, and Chamales spent his early childhood in a foster home. He began drinking and taking drugs as a teenager, and by his mid-20s had drifted through several colleges, survived six months in a psychiatric hospital and lived in the streets of Santa Monica and Venice, Calif. Then one day, his mind just snapped.

"I always felt guilty for wasting my life," he says. He plunged into a diet of substance abuse programs, self-help books and self-imposed behavioral modification. He landed a job selling computer printer ribbons in the late '70s, and in 1980 he set up his own shop in a ramshackle walk-up apartment in Venice. My first customers were stunned," he says, laughing. "They said, 'We must have the wrong address.' I started out knowing nothing about business. I made so many mistakes, it was a joke. But I would answer, 'It's not where you start, but where you finish.' "

Chamales believes his success has more to do with his company philosophy of "high-quality products, fair pricing and fanatical customer service" than it does with timing. "We got in at the beginning and rode the wave. But it's not an easy industry to break into--even back then. We were still required to work to stay in the game and change products as the marketplace dictated," Chamales says. "The company I started out with, Pacific Computer Products, is no longer in business because [it] forgot core values."

Because of his background, Chamales looks for future employees through referrals from recovery programs, halfway houses, veterans' hospitals and the criminal justice system. Although he's had death and bomb threats from disgruntled ex-employees, he believes the system he uses to filter potential employees doesn't create a higher-risk work pool than usual. Applicants are put through interviews, psychological testing and intensive training with a mentor who teaches everything from job skills to business dress and etiquette.

There's also a greater acceptance of maverick personalities at Omni than corporate America might allow. Chamales likes to manage by wandering around (what he calls his "MBWA" strategy), sizing up situations and encouraging people. He maintains an open-door policy so lower-level employees can speak with him directly.

"We try to recognize the intrinsic value of every employee," he says. "Being on the street teaches you survival techniques and entrepreneurial skills--how to size up situations and jockey for position. A guy who's had to go out and procure cocaine can figure out how to call a customer and doesn't easily take no for an answer. Once [people have] made a decision to get sober, they work harder, as if to make up for the five or 10 years that they lost.