At the end of a gated cul-de-sac in Colleyville there’s a handsome brick home with a slate roof. It belongs to Tom Slone, CEO of Touchstone Communications, and his wife Frances. The son of a carpenter father and a mother who was once imprisoned for “lightening” soldiers of their paychecks, Slone, 68, is very open about just how far he has traveled in what has been a remarkable life.
But for a current, and very foreign, chapter, one might say that Slone’s journey epitomizes the American Dream of a bootstrapping entrepreneur. That foreign chapter, though, was filled to the brim with personal drama, business ups and downs, and sobering lessons that every company working overseas can learn from.
Flashback to Dec. 28, 2007. That’s the day Slone woke up in a sleeping bag on the floor of a telephone call center in Pakistan. It was an enterprise that he had created, and one that he was now physically defending against a van-load of “goat herders” allegedly sent by a disgruntled investor to occupy the call center. For a man in his 60s who had swapped retirement in Florida for a totally new chapter of life, Tom Slone’s South Asian adventure was proving almost too exciting.
Slone’s Touchstone Communications, based in Southlake, had been established four years earlier to make cold calls to U.S. homeowners on behalf of subprime mortgage lenders. The employees of the Pakistani call center, who had already weathered a devastating earthquake, were further rattled when the luxury hotel next door was destroyed by terrorists. Topping it all off, Pakistan’s ex-Prime Minister Benazir Bhutto was assassinated the day before Slone zipped himself into his sleeping bag.
Slone, it seemed, had an uncanny knack for being in Pakistan—an often warm and hospitable place, but clearly not a winner in the stability sweepstakes—whenever something horrific swept the Third World country.
But it wasn’t Pakistan’s complicated and often corrupt business world that originally landed Slone in his present predicament. Nor was it the ever-unfolding political unrest there, or the collapse half a world away of the subprime-mortgage industry, an industry that had been paying the rent and salaries of the Pakistanis who manned the call center cubicles.
No, what got Slone in this perfectly exotic mess was a Pakistani-born, naturalized American business partner named Farukh Aslam.
A Westlake property owner, Aslam had convinced the itchy retiree of the fortune to be made by marrying Slone’s contacts in the U.S lending industry to the cheap and abundant young talent found in Islamabad, Pakistan’s modern capital. India had numerous successful call centers, Aslam’s argument had gone, while the potential of its next-door neighbor was virtually untapped.
Moreover, Aslam promised that his brother-in-law and a brother would invest $1.5 million in the start-up call-center business, some of it in computers that a family firm in Lahore would supply. The bicultural businessman was so persuasive that Slone flew to Pakistan in 2002, despite post-9/11 security concerns heightened by the kidnap-slaying of The Wall Street Journal reporter Daniel Pearl.
Needless to say, the Slone-Aslam venture wasn’t destined to turn out according to plan. But, it wasn’t for lack of cooperation from Pakistan’s top official. In fact, the opening of Touchstone’s call center in 2003 made Gen. Pervez Musharraf so grateful for the U.S. investment that Slone was given an audience with the military autocrat every time Slone turned up in Islamabad. Formal photos of the two perched on chunky, Victorian-appearing furniture would appear in the local press the following morning.
Slone was impressed with the secular Musharraf, and clearly enjoyed his access to a man whose hands held the levers of power. It was pretty heady stuff for a kid from Jeffersonville, Ind., to be rubbing shoulders with a head of state—albeit one who had assumed the position through a coup d’état, however bloodless.
Slone’s own roots couldn’t have been humbler.
A Job With The Associates
After growing up across the Ohio River from Louisville, Ky., Slone had no money for college, so he enlisted in the Air Force and took courses at night. After his military discharge he became a groundskeeper at a Seagram’s distillery, then an assembly worker on a truck line at Ford. Monotony led him to quit.
At the age of 25, Slone landed a job as a management trainee at The Associates First Capital Corp. He would stay with The Associates for 33 years, rising to become president of consumer lending, a division with 14,000 employees that managed $33 billion in assets. Among other people, a supervisor named Walt Wileman recognized Slone’s potential value to the company early on.
However, Slone “was a Kentucky hick,” recalls Wileman, who made the young man his Pygmalion project, setting out to correct everything about him, from his speech to his wardrobe. “He used words like, ‘Ever who,’ instead of ‘Whoever.’ ”
When Slone showed up one day in a thickly knotted necktie, country-bumpkin style, Wileman taught him how a half-Windsor could be fashioned. The young Slone was also 40 pounds overweight. “I pointed out that his coat jacket sleeve was coming apart at the seam, saying, ‘If you lost some weight, that wouldn’t happen,’ ” Wileman remembers. “With Tom, you tell him one time and that was it.”
Wileman recalls Slone not just as a self-starter, but as an unmitigated workaholic bent over his desk at 5 a.m. and staying past 7 p.m. “What I saw here was a raw talent with a lot of intelligence, imagination, resourcefulness, and a beautiful naiveté that thought, ‘With hard work, anything can be accomplished.’ It was instinct. It can’t be taught; it must be nurtured.”
Wileman plied Slone with management books and, when he caught him poring over every single loan file at a branch office, showed him how to “sift and sample”—or identify applications that could serve as examples. An increasingly urbane and slimmer Slone was on a fast track but never lost his formidable work ethic, his mentor said.
“Tom was one of those guys that you never had to tell twice about anything you wanted him to do,” Wileman goes on. “You tell him once and it was done. He was just so easy to motivate. One time he was going to leave The Associates, and I convinced him that one day he would be president. He stayed, and he was.”
Although Slone had an immense capacity for work, he wasn’t a one-dimensional company man aiming for the top, Wileman adds. Slone knew how to motivate by giving recognition and made all sorts of meetings enjoyable with an endless supply of jokes, his former boss says.
So, Slone surprised many when he decided to return to college in middle age. Not willing to lose him, The Associates paid for Slone to fly from Dallas to Pennsylvania to attend weekend classes at the University of Pittsburgh where, after two years, he would graduate at age 46 with a 3.9 GPA as a psychology major, all while working full-time.
“When he decided to go to Pitt to finish, it sent all kinds of signals,” Wileman remembers. “It wasn’t an easy task, and some peers thought he was nuts. They told him, ‘You are already an executive vice president; you don’t need to do this with your workload.’ Upper management, on the other hand, saw that Slone had the guts to do this, and came to consider him the future of the company.”
Management’s support only deepened Slone’s sense of loyalty. “I would never leave for another company; I felt obligated,” he said. But he began to want more than corporate success. Moreover, the Associates’ culture changed after Ford spun it off in an IPO, a move that saddled the company with short-term goals to please Wall Street.
“In 1998 I told Keith Hughes, the [Associates’] CEO, that I was burnt out,” Slone says. Asked what he’d do next, Slone replied that he might continue devoting time to a favorite nonprofit, Big Brothers Big Sisters. This prompted the chief executive to suggest that Slone become the company’s first-ever “executive volunteer,” on loan to the company for a year. This move meant that Slone would continue to be technically employed by The Associates, which didn’t want to lose him.The unusual arrangement lasted eight months—until Hughes met Slone for lunch to break the news that Citibank was acquiring the company. Slone received seven figures in deferred compensation, which paid off his mortgage and, together with a Citi pension, left him materially comfortable. But retirement proved a poor fit, he says. The Slones had a vacation home in Florida, but, “You can only read and fish so long,” he says. Back in Texas, he met Farukh Aslam and started a new venture.
A Business Model That Worked
Aslam and Slone’s newly created Touchstone Communications recruited four Pakistanis who were dispatched to a San Antonio call center for training. The instructors were amazed by their rapid retention of whole new skill sets. “It was the first indication [the business model] would work,” Slone recalls.
And, in the beginning, the model did work. The Pakistani business grew to 800 employees eventually generating revenue of $500,000 a month, Slone says. But roughly 90 percent of the company’s work was for subprime mortgage lenders. In retrospect, Touchstone had put far too many eggs in the home-loan basket. As long as housing was booming, though, why argue with success?
In January 2007, a top client called NovaStar Financial, a subprime lender, offered to pay $1.5 million for a 30 percent stake in the venture, and promised even more call-center work. In anticipation of the new work, Touchstone snapped up $165,000 worth of computers from Aslam’s family business. But then, Kansas City-based NovaStar became an early casualty of the industry’s collapse. Overnight, most of Touchstone’s contracts evaporated, just like the mist shrouding Islamabad’s Margalla Hills. The company downsized rapidly to 200 workers.
It was not a good year for Pakistan in general. Musharraf triggered unrest when he sacked the chief justice for the second time for questioning his regime’s legitimacy. The general-president declared a state of emergency. Still, Slone paid well-publicized calls on the increasingly unpopular military leader.
Slone hoped that a new contract with a non-mortgage lender—specifically, a Norwegian-owned, Pakistani cell-phone provider called Telenor—would save Touchstone. But the deal was sabotaged—by none other than Aslam, who candidly admitted his mischief.
Aslam’s American dream
Aslam declined to comment for this story, but in a 2008 interview for the Fort Worth Star-Telegram, he told me that Telenor’s negotiator was a Touchstone employee who had been fired and was now “spinning” Slone along. “This was a very slick kid with a grudge,” Aslam explained. Moreover, he said, “if Touchstone couldn’t make money [selling calls] at $9 and $10 an hour [per worker] for U.S. companies, how could we make any [money] at $3.10 an hour [placing calls for] a Pakistani company?”
Slone insists the deal was real and could have been profitable at a far lower rate because the call centers were empty during the day and Telenor would pick up line costs.
Who was this investor called Aslam, who’d convinced Slone to travel halfway around the world to create a call center, then allegedly sabatoged the company he helped start?
Like Slone, Aslam had dramatically achieved his own version of the American Dream. The son of cotton gin owners in Pakistan’s Punjab province, Aslam arrived in Texas at the age of 17 to study electrical engineering at the University of Houston. Instead of cracking the books, he says, he got bitten by the real estate bug.
Aslam dropped out his final year to buy up rental houses, whose prices would crash during the 1980s savings and loan crisis. He moved on to strip shopping centers, relocated to Fort Worth, and acquired what was the Color Tile building near Sundance Square. Now called the STS Tower, it was re-engineered to handle high-speed optic fiber lines for high-volume data storage centers.
Aslam was no passive investor. He took matters into his own hands, according to a lawsuit filed later by Slone against Aslam in a Texas state court. Flying to Islamabad, Aslam allegedly used his authority as a director of Touchstone’s Pakistani subsidiary to sell the lease on one of its call center properties for about $163,686, then took possession of the company checkbook and wrote checks to his family’s computer company for $338,830, the suit claims.
“I was forced to act unilaterally,” Aslam told the Star-Telegram in 2008, insisting he had “acted in the best interests of Touchstone.” He contends that the money was used to repay part of a $500,000 debt that had long been owed his family’s computer business by Touchstone. Slone, who had invested $700,000 of his own money in the business, disagrees, contending the debt to Aslam’s family firm had been reduced by then to just $50,000.
Besides his civil case against Aslam in a Texas Court, Slone also struck back in Pakistan by lodging a defamation case against Aslam. At issue is a “disinformation campaign” in the Pakistani media that claimed Slone had embezzled from Touchstone, using the proceeds to buy his Colleyville home and to pay for a chauffeured luxury car. Slone said he bought the house with his Associates deferred compensation and drives his own car, purchased with personal savings.
Aslam, furthermore, maintains that the men sent to occupy the call center were not rustic goat herders from his native village, as Slone claims, but actually the firm’s own security guards. Slone calls this characterization absurd.
Back in Fort Worth, meanwhile, the judge ordered Aslam to surrender $338,000, which was then deposited in a court-controlled bank account. The legal case went to binding arbitration, was settled in Slone’s favor, then was forwarded to a state court for confirmation. The arbitration finding, which eventually may be appealed, returns all the disputed money to Touchstone, plus interest and court fees.
Despite all he’s been through, Slone insists he has no regrets about the foreign call center business—or about his foray into Pakistan. “I’ve met some great people there,” he says.
And any obituary for Touchstone Communications would be premature, he adds. A revived U.S. bank sector has provided some business, such as processing 2,000 potential borrower leads a month, none of them subprime this time, Slone says. One contract has Touchstone scheduling appointments for a home security alarm installer. Another has it verifying insurance applications. Revenue now runs between $150,000 and $160,000 a month, Slone says, and there have been months this year that actually turned a profit. January, he adds, was the company’s best month since 2007.
Even so, Slone is planning an exit strategy from Touchstone. Once he’s cut free from the legal entanglements with Aslam, he says, “I’ll be looking for a way for our [Pakistani] employees to buy the company—like an ESOP.”
Looking back on it all, Slone is asked, what has the Pakistani experience taught him? His simple reply: “Vet your business partners.”