Friday , December 14, 2018

BizFaces

     In April 30, 2000, the Nalle Clinic, Charlotte?s venerable medical clinic, closed its doors after nearly 80 years of serving the community. Plagued in recent years by financial difficulties and unable to find a financial savior, the clinic had no choice but to cease operations. Its closure left 175,000 Charlotte-area patients wrought with anxiety about their future care, the security of their medical records and the possibility of having to look for a new physician. But on May 1, Nalle doctors saw patients as scheduled. In fact, aside from a few minor inconveniences, it was business as usual. How? Novant Health/Presbyterian Healthcare ? in the midst of its own troubles ? aggressively stepped in and negotiated deals with physicians, obtained patient records and absorbed the bulk of Nalle?s physicians? practices. How Nalle failed and why Novant rescued its patients paint a dramatic portrait of the state of health care today.

Anatomy of a Decline
     The Nalle Clinic once boasted 140 doctors, 11 satellite offices and an eight-story tower on Randolph Road. But its growth took a toll on the clinic?s finances. High overhead and sizeable investments in satellite operations cut into doctor pay, resulting in many physicians taking flight. The money crunch was exacerbated by an error-ridden billing and collections system that couldn?t handle the growing complexities of managed care. These internal difficulties, combined with cuts in reimbursements from Medicare and managed care companies. finally brought the weakened practice to its knees. In 1990, Nalle had turned to PhyCor, Inc. for financial management expertise. Nashville, Tenn.-based PhyCor, one of the nation?s largest and most successful physician practice management companies, agreed to step in for 12 percent of net profits. PhyCor purchased clinic assets, poured cash into satellite offices and beefed up medical equipment purchases. But as the rules of health care continued to change and evolve, profits shrank and even PhyCor could not find a way to stem the tide. Pricing pressures in the healthcare industry continued to chip away at doctor compensation. Physicians were paid only after expenses ? including PhyCor?s 12 percent management fee, overhead, and salaries for other staff ? were met. To make matters worse, the clinic?s financial system didn?t incentivize doctors to perform. As more physicians continued to depart, there were fewer professionals to shoulder the enormous overhead. Bill Michalak, a former health care analyst and currently CEO of Georgia-based Meridian Medical Group, says, ?Cuts in managed care pricing made it harder to manage medical practices and reap the benefits of consolidation. PhyCor was a great consolidator, but just couldn?t efficiently manage the clinic?s operations in that environment.?

Presbyterian?s Prescription
     Last year, Nalle Clinic management turned to Presbyterian Healthcare for a way out. Paul Wiles, CEO of Novant Health, Presbyterian?s parent company, recalls, ?We looked at a joint venture arrangement with PhyCor. We also considered buying 100 percent of the clinic.    
     But the economics didn?t work for us.? By January, Presbyterian had completed the due diligence process and decided not to buy the clinic. But Wiles was still willing to help the physicians purchase the clinic themselves from PhyCor. In the interim, he assembled a team of Presbyterian professionals to address the ongoing crisis. Led by Steven Burke, senior vice president of physician enterprise services, officials stayed in close contact with the clinic?s leadership and physicians, monitoring their negotiations with PhyCor. Burke remembers, ?As the negotiations kept going longer and longer, we began to have some concern. Maybe things weren?t working as well as we had thought. So we developed a contingency plan for the different scenarios that might play out. We all wanted the Nalle Clinic to continue in some shape or form.? Burke spearheaded planning sessions with key managers throughout the Presbyterian organization: Carl Armato, vice president of finance for Novant Health; Sandra Williams, chief operating officer of Presbyterian Healthcare; and Dr. Dan Hagler, medical director of Presbyterian Regional Healthcare Associates. By early March, when it became apparent that the clinic would not survive, Presbyterian?s team was galvanized into action. Burke launched a series of meetings with physicians, often as early as 6 A.M. and after hours late into the evening, gathering information and opening the lines of communication to better respond to the doctors? needs. Armato and his staff painstakingly ran projections, creating scenarios for private practice and other options. They helped doctors determine what they could afford for staffing, salaries and other costs. ?We took the information shared with us by PhyCor and put it into financial reports so the doctors could do some what-if scenarios. They could have some idea of what to expect in order to make decisions that would be good for them and for their patients. As doctors changed assumptions, we re-ran the models.? Hagler oversaw primary care specialties ? pediatrics, obstetrics, family practice and internal medicine. Williams worked closely with the hospital-based specialists ? surgeons, orthopedists, gastroenterologists, plastic surgeons and pulmonologists. ?Our guiding principle was to make sure the continuity of care was there for patients and the physicians would be able to stay here to practice,? she relates. ?We just worked through all the issues.? Within a few short weeks, their exhaustive efforts paid off. By May 1, the plan was in place.

Why Presbyterian launched its rescue plan
     Over the years Presbyterian Healthcare had developed an informal relationship with the Nalle Clinic. While the clinic was independent, most Nalle doctors traditionally referred patients to Presbyterian. Presbyterian also owned the $33 million, 8-floor tower occupied by the clinic. And Presbyterian ran the Nalle lab and jointly owned the clinic?s MRI facility. Certainly, Presbyterian had a lot at stake regarding the future of Nalle?s physicians and its 175,000 patients. It couldn?t take the chance they would move to Carolinas HealthCare System, the hospital?s chief competitor. Carolinas spokesperson Alan Taylor agrees, ?Presbyterian had more to lose. Nalle doctors not only sent more patients to Presbyterian, but leased space in their building.? So Presbyterian fashioned a plan that offered Nalle doctors the option of working at other hospitals. According to Steven Burke, this surprising measure of goodwill goes beyond the bounds of self-interest. ?One of the reasons we exist as a healthcare organization is for the community?s benefit. We valued the physicians and the physician-patient relationship. It was important to us that the community win.? Whether or not Presbyterian?s philanthropic effort will pay off in the long run remains to be seen.    
      Presbyterian provided three alternatives to Nalle physicians seeking to remain in the Charlotte area. Burke explains, ?We tried to give the doctors a tremendous range of flexibility, recognizing that there isn?t a one-size-fits-all type arrangement.? He points out that some Nalle doctors declined assistance and went into private practice on their own. Presbyterian focused its attention on three main options.
1. Private Practice Model To assist physician groups in returning to private practice, Presbyterian offered back office functions and cash flow loans. Presbyterian also acted as a liaison between Nalle doctors and local banks for other financial tools. The Presbyterian loans were completely free of restrictive covenants, allowing doctors the flexibility of selecting hospital services at will. Dr. Hagler elaborates, ?We set up the management organization to allow doctors to purchase the services to run their own practices. We negotiated on their behalf with PhyCor, eliminated their non-compete agreements and allowed them the option of staying in their current various locations. We guaranteed loans to allow them to borrow the money to start up.?
2. Affiliated Practice Under this alternative, physicians became employees of Presbyterian Healthcare, albeit with autonomy in operating their practices. Dr. Hagler adds, ?The practice gets to control itself. Doctors choose their partners and decide on a compensation plan. We would help them with the business, but it is their practice to run. We did offer them some guarantees to get started because we knew there would be some dislocations in terms of compensation.? Three major Nalle family practice groups chose to come under this affiliation: Randolph Family Practice, Matthews Family Practice and Medical Plaza Family Physicians.
3. Presbyterian Healthcare Associates In a select few cases, specialists joined existing specialty groups already a part of Presbyterian Healthcare Associates. Dr. Hagler explains, ?We made an employee offer to a small number of specialists where we had a need in an current office.? Presbyterian also:


  • Released PhyCor from its lease agreement for the tower

  • Bought clinic assets (to be sold or leased back to physicians)

  • Began operating Nalle?s Urgent Care (as Randolph Urgent Care) and the radiology department in addition to the lab and MRI

  • Worked with real estate consultants to ensure that Nalle doctors could remain in their locations

  • Assumed responsibility for maintenance, information technology, phone, copier and other services

  • Provided capital to Mike Zucker, former Nalle financial officer, to establish MedMetrics, a billing, collections and accounting organization for the newly evolved practices

  • Assumed custody of Nalle?s 300,000 medical records
     By far and large, the most time-consuming task is managing the clinic?s records. Although the Nalle Clinic had approximately 175,000 current patients, inactive records bring the count to 300,000. According to Kimberlee Johnson, director of Presbyterian Healthcare medical records, ?We are encountering approximately 200 to 400 incoming requests a day, added to our backlog of 16,000.? She continues, ?We mail a copy to their [the patient?s] home. The original stays here at Nalle. Novant now owns these records. Even if they go to another doctor, the new doctor only gets a copy.? She sighs, ?There are of course, exceptions.? Paul Wiles credits his management team for the effort, ?We put together people from across our organization to put this plan in action. It was truly a team event.
    ? In March, Dr. John Tracy, a Nalle family practice physician, wondered what would become of his partners, nurses, 25 member staff and nearly 5,000 patients. He remembers, ?We talked to other hospitals, but Presbyterian offered us the best arrangement without a non-compete contract.? His office now operates under the name Randolph Family Practice, with Presbyterian?s tax ID and benefits structure. Tracy is pleased by the outcome, ?We got to stay where we were, keep our equipment and maintain our staff. We even have the option of leaving the system [Presbyterian Healthcare] without penalty. We couldn?t get that anywhere else.? Dr. Carol Rupe, of the newly named Medical Plaza Family Physicians, concurs, ?They [Presbyterian] made it so much easier for us. They sent people out immediately to explain compensation plans and worked with us through the paperwork. They?ve given us a grace period to work our way through the red, until we?re in the black.   
      We?ve received a lot of support. Presbyterian greased the skids and made sure our employees didn?t go without pay.? Alan Taylor of Carolinas HealthCare System, concedes, ?Presbyterian actually came up with a financial plan to assist the doctors; we chose not do that.? ?But if a physician was interested in coming to work for us, we were happy to talk to them,? he offers. ?Some of them have come under our employment. Others are in private practice but have privileges here.? Steven Burke sums up Presbyterian?s leadership role this way, ?We wanted to do everything in our power to keep the Nalle doctors in town. It was the right thing to do.?

Recently, a private company with proprietary e-commerce-related software hired Marion Bass Securities Corporation to raise between $5 to $10 million of venture capital. As the Bass corporate finance team went to work on a marketing analysis and company evaluation, they recognized that competitive conditions in the marketplace made it an attractive time for the e-commerce company to consider acquisition.
Less than three weeks after the e-commerce company agreed to investigate the potential of a merger, the Bass team found a company that was interested. Six months later, the e-commerce investors received six and a half times their return on equity.
According to Scott Cornwell, vice president of Auction Services, with Assets2Auction.com, a division of Smart Online, Inc., Marion Bass is also largely responsible for Assets2Auction’s success through the acquisition by Smart Online, Inc.
“Marion Bass Securities has some unique qualities about the way they do business,” says Cornwell. “They have a personal approach combined with a strong aptitude for investment banking. This combination of their professional level of business and their personal touch is what guaranteed our success.
“From the beginning, they set out to understand what was going on in all areas of our entrepreneurial lives, all those things going on behind the scenes that move a company forward.
“When we were first forming the company, I introduced them to a lot of our personal advisors, key employees, people who were investing in us and potential employees. They took the time to understand those people. They looked at everything from our long- term goals to our exit strategy and gained insight into why we were building the company.
“We called them once when we were interviewing a potential board member and asked if we could use their boardroom. When I arrived, there were sandwiches from Dean & Deluca. This was in the early days when they really had no guarantee that our company would even succeed.
“At the end of the day, you can have a standard investment banker who’s just there to raise money for you by bringing in a network of investors or you can have Marion Bass. Just bringing in the capital won’t guarantee your company’s success.
“You read about all these dot com companies where two 30-year-olds build a company. No problem! Well, in the real world you need a partner who understands your business and who will commit to be there for you until you reach your goal. I will owe a lot to Marion Bass in the future for sticking with us. They’re a large part of why we will continue to be successful in the future.”

Seeking Out a Niche

Marion Bass Securities has found a lucrative niche by focusing its investment banking attention on companies raising $5 to $15 million in venture capital.
“It’s not a profitable investment range for banks so we fulfill a need in by matching investors with companies,” explains Marion Bass, chairman of the board and chief executive officer.
Bass, 60, entered the investment business in 1966 and founded Marion Bass Securities Corporation in 1979. Today, it is the largest privately owned regional investment banking and brokerage firm in North Carolina with offices also in Raleigh, Atlanta, Knoxville and Little Rock. The company has served individuals, institutions and corporations in 49 states.
In the early days, the company focused on raising debt capital. Then in the 1970s and 80s, Marion Bass shifted its focus into real estate. When the 1986 Tax Reform Act and the Savings & Loan crisis sent real estate into depression, values plummeted by up to 50 percent. Bass took money out of the company pocket to put behind the partnerships and held on. He sold 22 properties of the Real Estate Investment Trust in 1997 and returned money to his investors.
His motivation: “My name is on the door,” he says. “It’s important to stand behind our investments.”
Bass’s investors made out well compared to the rest of the industry according to Bass. The reputation he established through that trial has served him well.
“Over the past three years, we’ve concluded 22 corporate financial transactions with a total volume in excess of $120 million,” he says.
By 1996 the company shifted investment its banking focus once again, this time including capital formation through initial public offerings for mid-sized companies.

Investment Banking With A Personal Touch
Jim Phelps, who heads up the corporate finance team within the firm as senior vice president, holds an engineering degree from Johns Hopkins, an MBA from Stanford and a law degree from UCLA and gained experience in his early days as a Wall Street attorney.
Phelps sums up what Marion Bass Securities does for a company this way: “First we screen a company to determine if it and its technology is too small or too early or too late. We put together information disclosing who they are and what they do. We craft a financial strategy, contact sources of capital speaking with scores of potential investors, craft a sales presentation, arrange meetings, prepare the company for meetings, assist in negotiating transactions, put it all in document form and close the deal. In other words, we orchestrate the process by which folks find formal funding or sell their company. It all has to be done in a matter of months. If it took a year, the company could be dead.”
Despite the grueling pace, he declares, “There’s no more exciting and rewarding work around. It’s challenging. One has an opportunity to really have an impact and we’ve been wonderfully successful. I know we’ve done some things that were exceptionally difficult. Some of it has been by inspiration but a lot by perspiration. In the end, whether someone else could have done it, I don’t know.”

The I-85 “Boom Belt”
Bass founded his business in Charlotte, intending it to be a strategic location in the middle of the I-85 corridor as it stretched between the Research Triangle and Atlanta. His reasons are well-defined. The sector is a hotbed for technology. He now targets companies generally fitting within the parameters of information technology, including software/Internet, healthcare information services and telecommunications (wireless and broadband).
“There has been a shift to a new economy,” he explains. “The foundation of the old economy during the industrial revolution was mass production and labor. The new economy is based on technology and the knowledge of the worker. As we redefine our economy from a digital perspective, we have record numbers of new companies being formed. These need capital, advisory services and need to become public at some point.”
“This [geographical] sector along I-85 stands significantly above the national average of new company formations. In 1999 a record amount of venture capital was invested in emerging companies totaling $48.3 billion. The number one recipient for venture capital was Silicon Valley. Number two was Boston. Number three was the Southeast. In the Southeast, the two largest were the Research Triangle and Atlanta. Last year $1.2 billion in venture capital funds were invested in 109 different North Carolina companies. Of all the venture capital that was invested in North Carolina last year, 89 percent was in the Research Triangle.” Bass also believes Charlotte to be strategic for building his own company.
“Charlotte is one of the top global financial centers in the U.S., just behind New York. It has a good employment infrastructure for our business. We plan to bring between seven to twenty-eight people into the Charlotte office in the next 18 months. We’re looking for topnotch research people in information technology, healthcare information services and telecommunications.”
Bass recently opened an investment banking division in Raleigh because of their major focus there.
“These days, we have to turn business away,” he confides. “We look at 50 companies for every one company we agree to finance. Our team evaluates potential clients on the quality of their management team, the uniqueness of their technology and the new economy space they are focused in before we take on a project.”

Offering Life Solutions through Investment Advisory
Although investment banking is their major growth area, the retail side remains a strong part of the Marion Bass Securities identity.
The financial growth of individuals moving into this region is significantly higher then the national average,” Bass offers. “They need advice on such things as stocks, municipal bonds, asset allocation and estate planning.”
To prepare their financial advisors to meet the needs of individuals as well as corporations they’ve devised a training program for their financial advisor team.
“The demands of the affluent investor are changing because their needs are changing,” says Randy Nash, executive vice president and director of training and development. “To meet these needs, we have developed our training program, Advisor 20/20. The program is research driven and focuses on offering our clients life solutions.” “20/20 indicates perfect sight which is our goal as we look toward the future,” explains Gregg Hollidge, a Bass investment manager with 30 years’ experience in the business. “From our research, we devised a program that would enhance and prepare our financial advisors for the future.
“An investor experiences many changes during a lifetime such as marriage, buying a home, having a child and career as well as tax status changes. With these come change in their financial goals and strategies.
The trend now is away from a broker simply assisting with trade activity toward being a financial advisor, or counselor. A financial advisor looks at the total picture of the client’s life, continually monitoring and assisting in adjusting his portfolio to perfectly fit his changing needs over an entire lifetime.
“For example, as you approach 80, you are less risk tolerant and more interested in income then you are in growth like you were in your 30’s. As a client’s goals change an investment advisor needs to help them develop a discipline for a total picture, not at a point in time but over a period of time in the investor’s life.
”In order to keep their investment advisors up to date on the latest financial products, Marion Bass offers intense and continuous training.
“Twenty years ago, you had mutual funds, Ginnie Mae’s and bonds,” Hollidge continues. “Now you have 150 new products every year. As we look to the future we want to be assured that our investment advisors are the best they can be by receiving continuous education.
“As a smaller regional firm, we have the flexibility to take small groups of advisors and sit down with them continuously. We offer follow-up training, working one on one and support for the advisor as they meet with their clients.”

Customization Skills
“The new economy is also an economy of mass customization with the digital evolution of the Web and Internet,” says Bass. “Today you can go online and design your own car from models available, punch a button and have it delivered to your door in 21 days. This ability is making the overall economy more efficient, less time-sensitive, driving costs down.”
“We are presently studying various methods in investment banking as well as brokerage to expand our business with on-line strategies. Customers can sign up for services, transact trades and access their personal information. We plan to expand all that in the near future.”

     When Charles Saleh arrived at Southern Engineering headquarters in 1994, he found mass destruction from a recent tornado, obsolete equipment, a handful of employees and only one personal computer in the entire building. Charged with the seemingly impossible – rescuing the bankrupt business – his future looked bleak. “Normally when you start a company, you start at ground level,” Saleh replied. “We started below ground. People thought I was crazy.”
     The situation was a far cry from the company’s heyday. Founded in 1911, Charlotte, N.C.-based Southern Engineering was one of the premier steel fabricators in the Southeast. Dubbed “Little Pittsburgh” the company’s Wilkerson Boulevard headquarters fabricated and erected most of the buildings in Charlotte and the surrounding area, including Independence Arena (the old Charlotte Coliseum), Ovens Auditorium, and power plants dotting the region. Many current competitors launched their careers and learned the steel fabrication business at Southern Engineering.
    But in the economic environment of the early 1990s, the company began to falter.
    Gregg Lucas, industrial analyst at Wachovia Securities, explains, “The steel business is a notoriously cyclical business. When the economy catches a cold, the steel catches the flu.”
     Additionally, Southern Engineering had relied too heavily on large projects for big corporations. The narrow customer base left the company in the lurch as corporate giants scaled back or placed projects on hold during the recession in the early 1990s. Saleh says, “When the big customers dried up, there wasn’t enough to keep it alive.”
     Old, decrepit facilities only added insult to injury. With creditors mounting, the company filed for bankruptcy. Its subsidiary company, Catawba Rebar, shut down completely, and Southern Engineering employees waited for the ax to fall.
    But much to their surprise, it didn’t. The Nuqul Group, a worldwide conglomerate with roots in the Middle East, saw opportunity in the ailing business. They set up a holding company, Beta International, and purchased Southern Engineering and Catawba Rebar in 1994. Nuqul poured $5 million into new equipment and technology, and Charles Saleh was appointed the task of the turnaround.
    Some weren’t so sure that resuscitating the fabricator was such a good idea. The steel industry is inherently risky. Analyst Gregg Lucas comments, “When companies tighten their belts, they tend to delay building. The cycles are particularly tough, exaggerated at times because it’s not just what happens here in this country, it’s the whole rest of the world.” He adds, “There’s always the question of how foreign economies will affect our supply and demand.”
     “Why steel?” counters Saleh. “You will always need steel. Steel is one of
the basics in life.” This engineer-turned-businessman actually welcomed the challenge.        
     “Show me an industry that is not competitive. The issue is not competition. It’s how much confidence you have in yourself.”
     Still, Saleh had to instill that confidence in his weary employees. “I had to build trust,” he says. “I told them that we were going to be the premier company in this area again. But I didn’t just want them to hear my words; I had to prove it.” On the offensive, Saleh acted more like a coach than a president. He rehired laid-off employees and encouraged creative problem-solving. He overhauled inefficient and outmoded practices. And he instituted training, quality improvement and safety programs that exceeded industry norms.
    Saleh’s management philosophy is quite simple. “It really comes down to the basics. The number one rule is trust. Your word is your bond. When you do the right things in life and treat people well, the rest will follow.”
     Bankruptcy had also eroded the trust of suppliers and customers. Saleh carefully set out to rebuild those relationships. He paid suppliers COD until the company regained credibility. He boldly approached potential customers, bidding on small projects, and earning their respect by exceeding expectations. “We had to start small,” he recalls. “We told them that we were a new company. Give us a chance and we won’t let you down. And we didn’t.”

expanding regionally
    
As the sleeping company came back to life, Saleh looked to expand Southern’s geographical reach. His goal was to offer turnkey service to contractors and developers throughout the eastern United States. With Southern making a steady comeback, he set his sights on Lynchburg Steel.
    Unlike Southern Engineering, Lynchburg Steel had never fallen on hard times. This Monroe, Va.-based fabricator had grown steadily to $45 million in sales in 1996. With another facility in Abingdon, Va., the outfit was clearly a success story. Beta International acquired Lynchburg Steel in 1997.
     The sale did not affect any of the local jobs, and the management team was left intact. Saleh notes, “Nothing changed except ownership. The company is still ‘humming’ like it has always been.” Founder, C.V. “Andy” Anderson is now chief operating officer.
     With Lynchburg Steel in its fold, Beta International has extended its customer base as well as its geographical reach. A perfect complement to Southern Engineering’s markets, the combined companies now support customers from Massachusetts to Florida.
    Saleh has diversified Beta International’s affiliate companies into new markets. Business lines have expanded from steel fabrication services and rebar for construction into non-construction fabrication, like components for truck bodies and chassis. Capitalizing on the synergies of its affiliates, Beta International is now a powerful one-stop resource for the construction industry.
     In recent years, Beta International has provided all the steel and fabrication services for Concord Mills Mall, IBM facilities, and the University of Maryland Performing Arts Center. Saleh recognizes that talented managers are critical to the company’s ongoing successes.
    “No one claps with one hand. You always have to have good people.” He considers Bob Hackworth, executive vice president; Shawn Plyben, engineering manager; Jim Anderson, director of operations; and Jim Patterson, financial controller, invaluable to company. He also credits Tony Glaser, vice president at Carolina Rebar, as well as Andy Anderson and his son, Doug, at the Virginia facilities.
     Charles Saleh admits that engineers don’t always make the best business-people. “Usually, when you’re so technically-oriented, you think of things in minute details. But you can’t run a business that way. That’s one thing I’ve had to overcome.”

from the heartland to the south
     He also had to overcome bitterly cold winters in the Midwest. As a young man, he visited his sister in Des Moines, Iowa and decided to attend Iowa State University. “I visited in the summer and it was absolutely beautiful,” he remembers. “I had no idea it could reach 88 degrees below in the winter.”
     But Saleh was no quitter. He obtained a bachelor’s degree in mechanical engineering in 1980 then headed south, completing a master’s degree in mechanical engineering at Georgia Tech in 1982. He worked for IBM until 1991, when he launched Alpha International Trading Company, a pulp and paper export business, that he still runs today. Saleh also holds a N.C. Contractor’s License and a N.C. Real Estate Broker’s License.
     When Nuqul Group tapped him as president of the newly created Beta International in 1994, the job appealed to his entrepreneurial spirit. Unfazed by the seemingly impossible task, he said, “One of the things I learned from my dad was persistence. Keep knocking on that door until it opens.”
     At 42, he is surprisingly young for such a momentous undertaking. But his biggest priority is his wife, Mary, and their five children. Saleh is also deeply committed to the community; “We need to be known for our ethics and for making our community a better place to live.”
     He has demonstrated this dedication, serving on the Charlotte Chamber’s Board of Advisors, as Chairman of the Manufacturing Flagship for Carolina Advantage, and on the Charlotte-Mecklenburg Development Corporation. Saleh is also a member of the Westside Business Association and supports programs that target Westside youths. “It’s important to help children get the best start.”
     Southern Engineering has grown from 13 employees in 1994 to 130 today. Carolina Rebar, once empty and lifeless, now employs 30. Lynchburg Steel is better than ever. Although Saleh is proud of material achievements, he has a broader vision of success. “It’s easy to be successful upfront. But the tough part is in sustaining it. Now that we have grown to this level, my next priority is not only to sustain it, but to make this a solid and stable organization.”

     Are you a naive “Babe in the Woods” suffering from lack of interest in your financial portfolio?  Or perhaps a damsel in distress waiting for your White Knight to rescue you from a prison of investment boredom? Maybe you are more the Cleopatra type, a successful career woman who is convinced she doesn’t need any help managing her money. These are just three of the six “investment syndromes” some women suffer from when dealing with money matters.
     Julie Garella and Michelle Maidt, principals of Carnegie Capital Advisors, have identified these syndromes, and they aim to combat these and other fears that women have regarding their finances. Although Carnegie manages both personal and institutional portfolios, educating women about their finances has become the two women’s biggest passion.
    In 1997, Garella and Maidt founded Carnegie, the only financial services firm in the Carolinas owned totally by women. The two partners met through the Carolina Association of Women in Investment in the early 1990s. Garella was working at Interstate/Johnson Lane in Charlotte as senior vice-president of fixed income sales. Prior to that job, she worked with Smith Barney Harris Upham in Charlotte, where she managed portfolios for high net worth individuals, retirement plans and custodial accounts.
     Maidt spent 23 years with Royal Insurance in Charlotte as their property and casualty portfolio strategist. She also was head of equities at Royal, where she managed all portfolios, including the pension and 401(k) plans. Before that, she managed fixed income for the property and casualty portfolio and the company’s pension plan.
    Garella wanted to start a woman-owned investment firm. She saw her strengths as sales and marketing and felt that Maidt would be the perfect partner in the enterprise. “Michelle had a lot of depth and experience in the markets. We would have these breakfasts at Bruegger’s, and I would keep asking her what she wanted to do ‘when she grew up.’ She had 23 years of portfolio management experience and knew how to run a company.” Maidt eventually signed on “for the challenge of building a company from the ground up.”

taking the plunge
     In 1997, the two women took the plunge and started Carnegie Capital Advisors; a SEC registered investment advisory firm dedicated solely to investment management. They are a client-driven firm composed of three divisions. Each division focuses on a different client type: Institutional Asset Management, Fund Management and their Private Client Group.      
     Carnegie’s portfolio managers develop a strategic investment plan for each client that maximizes returns at a pre-specified level of risk. The company only services high net worth individuals and companies, “but we will refer other clients to a stable of other people that can help them. We don’t want to be all things to all people,” says Garella.
     Garella remarks, “All our clients are looking for a highly consultative process. That’s what we offer: a big picture approach to financial management.” Carnegie employees look at a client’s business plan, goals and objectives and long-term strategy.
     Maidt explains: “We define the client’s goals and objectives, then we come up with what the strategy and asset allocation should be.” Garella adds, “We manage expectations. We have charts and graphs to show them volatility versus return.” 
     Maidt cites the example of the April NASDAQ plunge to illustrate their clients’ response to a potentially frightening market situation. “After NASDAQ tanked, we didn’t have one client miffed. We analyze the values of clients’ securities beforehand and spread their portfolio out among different industries.” Garella supports Maidt’s statement saying, “The reason we didn’t have panicked clients after the market went down 600 points is that we had a plan to deal with each client. We really spend a lot of time with them on the front end.”
    Both Garella and Maidt have found the Charlotte climate hospitable to a female-run and owned business. Garella emphasizes “We started the business by asking people what they needed. We work with the client to educate them while they educate us. In two or three meetings, we’ll show the client our overall strategy. We pay for ourselves.” Maidt adds that they have encountered some skepticism: “We’re just going in with our expertise. We’re relatively new, so some people are cautious.” Maidt says Carnegie obtains most of its business through referrals and “word-of-mouth reputation. Some of our institutional work has also brought in individual clients.”

helping women invest
     Although the Carnegie team did not originally target the women’s market as clients, Garella claims, “That’s where our greatest successes came from.” Women are now involved in all areas of finance and investing, either as employees or as the managers of their personal and/or their family’s income. A recent study by the National Association of Securities Dealers found that women now make up over 47 percent of investors. According to this same study, women’s investment portfolios often earn more than men’s do.
     Despite this success story, many women are still reluctant to deal with investing their earnings. Fear of the unknown holds many of these would-be investors back. The biggest mistake a woman can make with her finances, says Garella, is “not getting involved.” Many of their individual, high net worth female clients come to them as widows or divorcees. Maidt relates, “Once they come to us, they get a little more educated. Especially in a divorce situation, they’re scared. A lot of them don’t want to deal with finances.” Garella adds, “These women come in here and with a little education, they get very involved in their finances.
    They get hooked. Taking care of your finances is empowering. You get more confidence in all areas of your life. It’s a very positive thing.”
    To help further define and explain their female client’s fears, Garella and Maidt have identified six investing “syndromes” that women often experience.  They call the syndromes “Babe in the Woods,” “White Knight,” “Cleopatra,” “Dear in the Headlights,” “Bag Lady” and “Golden Girl”. These syndromes affect women from all income levels. Garella and Maidt claim that although women may identify with more than one of these mentalities; there is usually one scenario that dominates their investment pattern.

babe in the woods
     “Babe in the Woods” tends to be an intelligent young career-focused woman. She uses her hectic schedule as an excuse for not learning about her finances and puts investing low on her list of priorities. The cure for such folly?  According to Garella and Maidt, there are four steps: 1.) Pay yourself first. 2.) Design a simple plan to invest as much as you are comfortable with in your company’s 401(k) plan; 3.) Pay off credit card debt; 4.) Invest $100 monthly in mutual funds. The results? Investing $100 per month could create a portfolio worth as much as $17,384 in ten years, $87,727 in twenty-five years, and $206,780 in thirty-five years. Not too shabby!

white knight
     “White Knight” syndrome is one that all too many women fall into. Women who identify with this mentality expect that someone else will take care of their finances. Such a woman may not be able to read her financial statements, understand why and how her money is invested, or to determine if she is making a good return on these investments. Her knight may or may not turn out to be Prince Charming. The cure? Find someone objective (who is not related) to teach her about managing your investments. The result? The more confidence she gains in the financial area, the more she will enjoy managing her money.

cleopatra
     “Cleopatra” syndrome strikes most often in high-powered career women.  The modern-day Cleo is a mover and shaker who earns a significant income.  She may toy with on-line investing and think she has the expertise to handle her finances on her own. What she won’t admit is that she doesn’t have the time or the expertise to make all her investment choices with no outside advice.  Garella comments, “This high-powered executive is doing it all. However, no one can do everything well. Investing is a full time job.” Maidt adds, “We show clients that parts of their portfolio may be dormant.” Some Cleopatras may also become overly attached to an approach to investing that no longer fits the market. As Garella points out, “If you become too dogmatic about owning something, you lose opportunities.

dear in the headlights
     “Dear in the Headlights” syndrome occurs most often to women who have experienced a divorce, a husband’s death, or even a job change. Women in these stressful situations may turn inward and try to avoid dealing with their new situation. Like a deer caught in the headlights of an on-coming car, such a woman is vulnerable and her inaction may yield unpleasant results. The cure is to relax and untangle herself from her emotions. Garella and Maidt claim that a well-trained financial advisor is as critical at this time as a lawyer.  The result may be a much more equitable financial outcome in a divorce or a better financial strategy as a widow or new jobholder.

bag lady
     “Bag Lady” syndrome is often seen in women who have inherited wealth.  Garella observes, “A lot of times, these women haven’t earned the money, so they don’t know how to replace it. There’s a lot of fear of the unknown here.”  Maidt adds that this is a syndrome often seen in children of the Depression and World War II. “These are people who only believe in hard assets.” Maidt also includes investors in the 1973-1974 market crash who “got burned.” This woman may not be very savvy about investing and tends to be a “financial hypochondriac.” The cure again is to seek out a good investment planner to allay those financial demons. The Bag Lady should get involved and help her advisor develop a portfolio that will maintain her lifestyle. Garella and Maidt have seen the resulting knowledge and confidence gained through this exercise help such women not only to maintain their wealth, but also to increase it through strategic investment planning.

golden girls
     Finally, “Golden Girls” syndrome refers to women nearing retirement.  This woman may be a married woman or a widow. She may have kept up the family finances for years, saving little bits here and there. However, her finances, like her files, are in disarray. Organization is her downfall. Garella points out, “As you go through life, you choose goals and you constantly have to readjust those goals. Just because you were good at accumulating wealth doesn’t mean you can put it under your mattress.”
     Whether or not you suffer from one of these investing syndromes, Carnegie Capital Advisors still aims to guide both institutional and individual clients through all types of investment hazards.  Both Garella and Maidt claim that on-line investing and boilerplate investing services can’t replace the one-on-one service and expertise that a firm like Carnegie provides. Maidt cites an example: “An advertiser on CNBC had a market system of when to buy and sell stocks. They got absolutely crushed on margin calls.”
    Regarding online investing, Garella adds, “You can’t get strategy off of a computer.” Both the principals in this firm agree that investing fads come and go, but they claim there is no substitute for the consultative portfolio management process. Garella also adds “We’re not into market timing, we’re into portfolio management.”

The Internet has shaped a new medium for doing business. Fueled by the accessibility of personal computers and the low cost of connectivity, The World Wide Web has fundamentally changed the way companies compete. New “dot com” companies that didn’t even exist a few years ago are selling products and services directly over the Web. As the pioneers in this new e-business world, they are challenging established “brick and mortar” enterprises to change their business models. Slow and steady may not win this race, and increasingly, traditional businesses are turning to a new breed of Internet-savvy consultants to help them compete.
     The market forced us to go to the Internet,” says Tim Roche, senior vice president and CIO of Mergent FIS.
    “Our product is business and financial information. Many of our customers wanted to receive the product by the Internet rather than in print.”
    FIS, formerly a division of Moody’s Investment Services, was purchased by Mergent, Inc. in 1998. Based in New York City, the company’s data collection operation is in Charlotte.
    Since John Moody pioneered the collection and dissemination of information on securities in 1900, FIS has been a highly respected publisher of a wide range of well-known manuals, investment guides and other products.
    It has more than 15,000 customers who are annual subscribers to these products as well as buyers of individual products. Many of its customers are reference professionals at university and public libraries. Until 1990, FIS’s cornerstone products were its manuals and investment guides. But then, Roche says, the company began to focus its product-development agenda on CD-ROM technology. “Now we’re seeing the Internet replace CD-ROM and even some print sales,” says Roche. “CD-ROM technology is no longer in favor.”
    As it looked for ways to move from print to the Internet, FIS turned to the Charlotte office of Oracle, the world’s leading supplier of software for information management and the world’s second largest independent software company.
    Originally a developer of traditional database software, Oracle repositioned its business a few years ago as an Internet-based solutions provider. Last year its earnings jumped 33 percent to $1.4 billion, on sales of $9.3 billion. Oracle was able to provide the software tools to help FIS make the transition from print to the Internet.
     The FIS database consists of over 10,000 U.S. public companies and more than 12,000 international public companies. It includes financial statements, business descriptions, capitalization structure, and share price data.
    “We had many different systems, all oriented toward print products,” says Roche. “We needed to move data in a more timely fashion. The biggest benefit of the Internet is that it could provide more information much faster.” The company now uses the Internet to speed access and delivery of the data to customers with time-sensitive needs.
    “We lose business if we provide wrong, bad or out-of-date data,” says Roche. “If we lose business, we lose revenue. The new system has much better integrity.”

improving logistics
     Another example of a successful partnership of this sort is the one between marchFIRST and clicklogistics
     Headquartered in Concord, clicklogistics provides comprehensive business-to-business logistics solutions. “Click” was established in July of 1999 and is a subsidiary of Cardinal Logistics Management, Inc. Click’s services include order management, carrier management, optimization and consulting. Its customers include other dot coms, retailers and manufacturers. While each customer’s needs differ, most have both domestic and international shipping requirements.
     “Click is not a pure dot com, nor is it a startup,” says Eric Wolfe, Click’s chief operating officer. “We have an established book of business and an infrastructure of experienced personnel to back our technology. Our business is building and supporting effective transportation processes – we want to use technology to support efficient communication, not technology as an end in itself. We recognized however, that we needed to get the technology in place to support Internet activity and we needed to do it very quickly.”
     Click turned to marchFIRST for help. MarchFIRST was created earlier this year through the merger of two industry powerhouses, Whittman-Hart and USWeb/CKS. Robert Bernard, president and CEO of marchFIRST, founded Whittman-Hart in 1984 to provide services and solutions for IBM’s midrange computers. By 2000 he had grown the firm into a leading provider of e-business solutions for fast-growing and middle-market companies.
    USWeb/CKS was founded in 1995 by three former Novell executives. It rapidly became a leader in Internet professional services, with a strong emphasis on the business-to-consumer marketplace and brand building. As a result of the merger, marchFIRST has a multidisciplinary focus. It has 8,500 employees and offices in 654 cities and 14 countries, with headquarters in Chicago.
     “We don’t have a large development staff and don’t plan to have one,” says Eric Scholar, Click’s chief community officer. “We’re a logistics company. We choose to target alliances with technology providers and providers of supply chain services so that we can focus on our core competency – excellent logistics management services. MarchFIRST is one of the links in our chain of alliances.”
    MarchFIRST sent a team to do a technological assessment for Click. Then they suggested specific changes in network hardware and helped develop a different format for the data that was being exchanged with customers.
    “These guys had a good idea of what they needed to accomplish,” says Jon Nance, senior manager at marchFIRST. “They just didn’t know how to do it. We became the enabler.”
    One requirement from Click was to use the Extensible Markup Language (XML), a format for structured documents and data on the Web, for data exchange. XML can be used by an individual or a group of individuals or companies that want to share information in a consistent way. MarchFIRST worked within Click’s existing framework of Microsoft technology and tools to create new interfaces for receiving XML-based messages. 
    “The use of XML, to send and receive business documents, is very new and industry standards are still being contested, but we believe that its inherent flexibility makes it the best choice to support our e-commerce initiatives,” says Shanon Hart, Click’s chief knowledge officer. “We want to leverage technology that can be used today and that will also drive us into the future.”
    Nance points out that the interfaces they developed give Click a repeatable solution to the problems of electronic date interchange. It provides an application beyond just one customer.
    “Customers need to make an order, find out the status of their order, find out what they owe, and pay it all in one system,” says T.J. Felice, office managing partner at marchFIRST. “We were able to develop that system for ordering, invoicing and remittance.”
    “We worked with Click exactly as we do with other clients,” explains Nance. “We recognize that we are nothing more than a tool to them. They needed to grow their business. We helped  them create a strategy and the plan to implement it.”

internal solutions
     Some businesses need an e-business solution for internal problems. Addison Whitney, a Charlotte-based strategic branding and design consultancy serving Fortune 1000 companies, had a problem managing its internal database system. It turned to System 5 Technologies for help. System 5 undertook a two-month project to revamp Addison Whitney’s internal data system.
    “They knew what they wanted,” says Nadine Film, account executive for Charlotte and Western North Carolina and South Carolina at System 5. “They just didn’t know how to get it.”
    System 5 Technologies is a five year old company with headquarters in Charlotte and offices in Raleigh, Knoxville, Atlanta and Orlando. The company works with customers to bring current technologies together with the customer’s business vision. It provides companies with a complete “end to end” business solution. System 5 is the 14th fastest growing privately held firm in the Carolinas, according to KPMG.
     The way System 5 worked with Addison Whitney is typical of the way
it partners with its clients. The process began with a discussion of Addison Whitney’s business practices, rather than technology.
    “We had to understand how they wanted their internal process to work,” says Film. “Then we could help them select a solution which would best fit their needs. Once the package selection was done, we helped them implement it.”
    The result is a database which manages Addison Whitney’s contacts with its customers in a more efficient and secure way. There is one all encompassing database for internal employees to work with, but it is partitioned and access is restricted. The database is designed to grow as the company grows.
    “We were able to help them redefine the way they were handling contact strategy,” says Film. “We were able to use technology to accomplish Addison Whitney’s objectives.”
 
clothing solutions
   
Rutherford-based Tanner Corporation manufactures women’s high fashion clothing apparel as well as gifts and accessories. It sells these primarily through a network of approximately 2,000 wardrobe consultants across the country. This sales force needed to access information stored at Tanner’s headquarters, regarding historical buying patterns of their customers, the current status of the inventory, and more detailed specifications of the Tanner product line. The consultants also needed to be able to place orders on-line and to improve and expedite the sales cycle.
     Tanner had been producing monthly printed reports and mailing them to consultants. This was ineffective because of the cost involved and the time lapse between when the report was generated and when the consultant received it. The answer was to create a Web site for the sales force, not for customers, which could do more than simply deliver reports. To develop the site, Tanner turned to OnSphere Corporation, a spin-off of DB Basics Inc. which was founded in 1988 in Raleigh.
    In January 2000, DB Basics created OnSphere to specialize in helping companies develop their e-business objectives. The company was one of the first in the nation to specialize in client/server development and training.
    OnSphere developed a Web site for Tanner that generates reports on demand. This eliminates the problem of stale data.
    “The majority of our work is with companies who want to be proactive,” says Matthew Toney, e-business solutions manager at Onsphere. “Technology has grown at a faster rate than many businesses can handle. That’s why they come to us. Tanner didn’t just save money this way. The consultants were able to get the information they wanted, when they wanted it.”
    This solution was so successful that Tanner officials began to see other ways the new technology could work for them. The order processing department saw that sales orders could now be initiated on the Web rather than over the telephone by order entry clerks. The Doncaster clothing-line catalogue could be transferred to the Web site.  Additional information and more detailed specifications could be included in the online catalogue than in the printed version because of space and cost. Also, the internal management team started using the report system.
    “Like most clients, Tanner came to us with one idea,” says Toney. “When that was implemented, it opened doors to other ideas. They could see ways to solve other problems with Internet technology.”
     As quickly as the Internet is revolutionizing the way we do business, the Internet services market is growing to help businesses of all sizes make the transition to the new world of e-commerce. By 2003, the Internet services market is expected to reach $80 billion in North America alone. Companies looking to make the transition to e-business models have plenty of help.

In the days before cable and satellite television, television viewers could either watch shows on VHF (channels 2-13) or UHF (channels 14-83). The fare on most local UHF channels consisted of syndicated reruns, classic films, “shock theatre”, kung fu movies and other low-cost fare. One UHF station that became a household name was Ted Turner’s Superstation, WTBS, which helped build his media empire.
     Now a local Internet company hopes to duplicate that kind of success, ironically, by featuring much of the same content as an old UHF station. Charlotte-based LikeTelevision, Inc. is an Internet broadcast network that delivers a combination of pre-released content and original programming. The company, led by Doug Hawthorn, William Krause and Jim Safran, maintains a library of over 2,000 video clips of streaming media content, including the “Classic Television Channel” with such hits as The Beverly Hillbillies, The Andy Griffith Show and Bonanza. They also have the “Movie Channel,” with films like Night of the Living Dead and The Legend of Marilyn Monroe. The company also offers original LikeTelevision productions and exclusive content created by various artists.
     LikeTelevision streams its video and audio content over the Internet. That means anyone with a fairly new computer, a high-speed connection to the Internet and current browser software can watch the show of their choice anytime he or she desires. The three men hope liketelevision.com becomes the premier destination for streaming video as broadband access becomes more common with both consumers and businesses. At the moment, they are ahead of the curve.
     “We’re not concerned,” says Hawthorn, chief creative officer. “We know we’re ahead of our time. So were Yahoo! and broadcast.com.” In fact, like so many other Internet businesses, being the first to capture an audience is an integral part of the strategy. “Being first is really an advantage,” says Jim Safran, CEO, and a former executive at Vnet Internet Access and Interpath Communications. “The audience is not just coming to see the movies. It’s the whole experience of the site.”
     The company has lined up close relationships with Real Networks, Excite @ Home, ChannelSeek and Scour. Their site is frequently a featured site on Real‘s immensely popular “Take 5” site.  Already, liketelevision.com has developed a reputation as a “must-see” Web destination.
     In addition to its head start in the market, the company has some technical advantages as well, including a patent pending on what they call “Instant Gratification Streaming”or IGS. IGS is a proprietary process of digitizing entertainment media for computer viewing and streaming broadcast via the Internet.
    Hawthorn, an independent audio producer and sound engineer met Krause in 1996 and together they formed Pendulum, Inc. Among other projects, they developed video CD-ROMs for businesses. But they saw the future lay elsewhere. “We knew a lot about distribution for a CD, and how limiting that was,” says Krause. “I knew – everyone knew – it was going to get bigger. That threshold where you could deliver content over the Internet was right around the corner. So we started trying to get good at that because we knew that distribution model just was so awesome.”
    Adds Hawthorn, “The system we developed removes the part of the video and audio spectrum that become trash artifacts when the file is interpolated for streaming over the Internet. So the stuff that you are encoding is all real. It’s not turning into artifacts.”
    In the age of the convergence of television and the Internet, the three men and their staff at LikeTelevision are both throwbacks and visionaries.
    “Unlike a lot of sites out there, we’re not anti-television,” says Safran. “We’d love for our stuff to eventually migrate back towards that, and we’d love to show the way.”
    Indeed, the programming on LikeTelevision is not based on any scientific research. “We pick programming based on what was entertaining to us,” says Safran. “We want to make sure some of the old stuff has a home. And I think the public recognizes quality. That still matters out on the Internet.”
    Apparently it does. Last July, they were streaming 1,000 videos per month. By December, they were doing over 500,000 a month. Today they are up to 1 million videos streamed per month, and their prospects only look brighter. Forrester Research estimates that by 2003, there will be over 25 million broadband subscribers.
    “We really are better known outside this area than we are here,” says Safran. although each of the three principals has been here about 20 years, “It’s almost just by luck of geography that we live here.”
     Adds Krause, “For every person watching here, there’s 1,000 watching in California,” says Krause. “And that’s true of 15 or so other states.” Future revenue drivers will depend on that national audience, as the company plans to forego banner ads for 30-second digital commercials.
    LikeTelevision plans to establish a high performance server infrastructure this year and add additional staff to help accommodate their growth. The company is looking for another round of financing, hoping to raise $10 million.
     Using the latest technology to deliver old television programs may seem a bit ironic, but Andy, Jethro, Little Joe and the rest of the gang are at ground zero in the convergence of the Internet and TV. And a Charlotte company is the reason why.

He wanted to play football. As a youngster growing up in Charlotte, Yates had the size and athletic ability to be a good player. What he lacked was permission. Robert’s father, a Baptist minister, wouldn’t allow his son to participate in the sport. So instead of scoring touchdowns or intercepting passes, Robert developed a different pastime – working on cars. As it turns out, he was pretty good at that too.
     As he works his way through his 33rd Winston Cup season, Robert Yates has mixed emotions. He’s the owner of the reigning Winston Cup Series Championship racing team andat the pinnacle of his profession. He’s already won the Daytona 500 this year, and both his #28 and #88 cars are in the top 10 for Winston Cup points this season. And yet, something is missing. Racing has changed, and while NASCAR’s success has been good to Yates, the distinguished, soft-spoken master engine builder oversees a far different operation from the one he first joined back in 1967.
     “I don’t feel like I’m contributing as much to the team anymore,” he says wistfully. The desk in his office, which he once rented out for a time, is bare except for a few family photographs and models of his two racing cars.
     Yates explains, “About the only time I’m in here is to hire somebody or fire somebody. I’d much rather be out in the shop.”
     Yates’ challenges have changed as his organization and the sport have grown dramatically. One thing is certain, though. He has worked hard his entire life, and he’s not about to stop now.

burning rubber
     Born in 1943 as the youngest of nine children, including twin brother Richard, Yates grew up in the shadow of the Allen Street Baptist Church his father pastored.
     Yates credits his upbringing for giving him the proper perspective on life. “The family I was so lucky to be a part of gave me a good understanding of why we’re here, what this life’s about, and how to get through it.”
    Yates watched how his father worked with people and saw firsthand the poverty that surrounded them. He developed a strong work ethic and an understanding that nothing in life is free. “We would never go to my dad for Coke money,” he says. “But if I needed a schoolbook, he would get it.” Robert and Richard delivered the old Charlotte News and later took on several Charlotte Observer routes. They cut the grass of their father’s parishioners’ yards and saved money to buy their own bicycles.
     Yates was a big and strong kid in his early teens. He wanted to play football, but a heart murmur from a childhood bout with rheumatic fever precluded it. His parents wouldn’t sign the release form. Because he couldn’t play football, Yates pursued what would become a lifelong love affair with that gleaming symbol of post-war America: the automobile.
     With the help of a trade-in from their father, Robert and Richard bought their first car, a ’57 Chevy, with the money they had earned. The church had in the meantime bought a home for the Yates which had an unusual feature for the time: a two-car garage. After school the boys would come home and spend hours in the garage working on their car.
     “We came along at the time when automobiles were popular,” says Richard. “People needed to have work done on their cars and Robert and I both liked tinkering with cars and enjoyed the mechanical side of it.” 
     Robert was especially adept and would work on wealthier kids’ cars, then use the money to buy the parts to fix his and Richard’s. He was a natural mechanic and was “busier than I can tell you, because I could do anything on a car.”
    They didn’t fix their car just to keep it running. Working on it became a passion. As Robert remembers, “We had more backup engines than we do now for Winston Cup racing!” On occasion, Robert would ride on the front bumper while Richard drove with the hood open, so Robert could listen to the engine and adjust the timing.
    Robert also had a taste for speed and channeled the competitive impulses he couldn’t use in football into drag racing instead. 
    “I also spun my wheels around the church a lot. Probably interrupted a few prayer meetings,” he admits. “But when I raced, I loved hurting people’s pride when I beat them.”

nascar beckons
      Yates saw the first NASCAR event at the Charlotte Motor Speedway when it opened in Concord in 1960. He was 17. At the time neither of the boys could imagine where their lives would lead them. “Oh, we never thought we would end up in Winston Cup racing, because when we were teenagers, our idols were guys like Ned Jarrett, Junior Johnson and Ray Fox,” exclaims Richard. “We never knew that we would end up knowing them and competing against them. It’s mind-boggling.”
     Robert’s goal was to get an engineering degree from N.C. State. But, as it would do many times, his life took a different turn. “Along the way I met this girl who convinced me that she loved me the way I was,” he says. “I was a mechanic and she accepted that. We got married, and after that, I had to earn a living!”
    Robert and Carolyn were married in 1965. He still had plans to work during the day and go to school in the evening, but found he couldn’t do both. At the age of 24, he went to work building engines at the famed Holman-Moody racing operation. “We worked from eight in the morning till ten at night,” he recalls. “And they expected you to work on Saturdays and Sundays.”
     The very next year, though, Ford quit racing. His hours cut drastically, Yates looked for other work. By now, he had gained a reputation as a highly accomplished engine builder. He was eventually hired by Junior Johnson to lead his engine development program. Yates moved his family to Wilkesboro and helped propel stars such as Bobby Allison and Cale Yarborough. After five years of 18-hour days, his family convinced him to move back to Charlotte.
    For the next ten years, Yates worked for and became a partner in the DiGard team and helped power the fortunes of such drivers as Darrell Waltrip, Bobby Allison, Ricky Rudd and Greg Sacks.
    By now he had firmly established himself as one of the best engine builders in racing history. When the DiGard operation failed in 1983, Robert took some time off from racing. He tested synthetic fuels and even worked with the Pentagon on the project for awhile. But racing was in his blood. In 1986, he bought a former mill site just off Rozelle’s Ferry Road and began building engines for seven different race teams. Among them was Rick Hendrick’s. “I almost went to work for Rick,” says Yates. “And I’m sure I would have done well there.” Then he got a phone call to meet a man at the airport.

from builder to team owner
     It was August of 1986 and the man was Harry Ranier. He and his partner, who had enjoyed success on the circuit with drivers like Buddy Baker, wanted Yates to become their team manager. Yates signed on, but once again the fickle nature of the racing business changed Yates’ course. In the fall of 1988, Ranier had financial problems and was forced to get out of racing. Yates wanted to buy the team. All he had to do was come up with the money.
     “I sold every thread I had,” he  recalls. Yates and his wife had made an offer on a house just before. Yates says, “If they had taken our offer, I’m sure I wouldn’t be sitting here today.”
    He sold his house, got a bank loan, and applied some money he had already invested in the business and bought the operation for $1.7 million.
     “It probably had a liquidation value of about $700,000,” says Yates. “But we had Texaco as a sponsor with a 3-year contract.” Things did not go well for Robert Yates Racing at the start, though. His first race as team owner was rained out. In the second race, the car wrecked and in the third, it burned to the ground.
    “We got to the last race of the season in Atlanta thinking, ‘we’ll never make it. We haven’t earned a dime.’ ” They ran second, and Yates calls it the turning point for the team.
     The lowest points in Yates’ career occurred only a few years later. In 1993, beloved driver Davey Allison was killed in a helicopter crash at Talladega. His replacement, Ernie Irvan, suffered a near-fatal crash the next season at Michigan.
     “After both of those, I didn’t know how I was going to go on,” Yates says quietly. “We have had some real sad times.”
    It took a while for the current driver, Dale Jarrett, to settle in, but with Jarrett driving the #88 Ford Quality Care Ford Credit Taurus, Yates now has his first Winston Cup Series championship.


performance matters
     Yates is well known in racing circles for his relentless commitment to excellence. He’s had his share of run-ins with NASCAR officials, who have disallowed many of his engine improvements.
    “I’ve created a few rules,” he laughs.
    In the midst of NASCAR’s recent success and the influx of corporate sponsorship and flashy megabuck owners, Yates is a throwback to earlier days.
    “Robert is reminiscent of the original people who started this whole sport,” says H.A. “Humpy” Wheeler, president of Lowe’s Motor Speedway.
    Mike Hargrave, director of sponsorships for Texaco, which still sponsors Yates’ #28 car, agrees. “Robert’s unique. He is involved every day and he works very hard so that his team is given all the resources it needs to be successful.”
     Unlike most race teams, Yates has never had to participate in what’s known as the “silly season” trying to line up sponsors. 
    “I’ve known Robert in this sport for 20 years, and always had a lot of respect for him,” says Ricky Rudd, who is now the driver of Yates’  #28 Texaco/Havoline Ford Taurus. “The strongest suit of the Yates racing team is their motor program. There is no one on the circuit that makes more horsepower than the Robert Yates race organization.”
    It’s a sentiment echoed by Humpy Wheeler. “Robert’s real fort? through the years has been his engines. He’s right there with the great engine builders of the past like Smokey Yunick, Ray Fox and Junior Johnson,” says Wheeler. “Robert learned a lot under John Holman and Ralph Moody and he’s one of the few guys left who worked for them. He’s always been able to get that extra horsepower out of a car.”
    Adds Hargrave, “The Robert Yates name is synonymous with performance. The engines he builds are known throughout the world for their power and reliability. Havoline Oil is used in all of Robert’s engines, so when you think about the #28 car as a NASCAR fan, and when you think about Robert Yates Racing, you immediately think about Texaco. It has really built a positive bank of equity for us.”
    Everyone who has been associated with Robert Yates has the utmost respect for him and for his commitment to the sport. “I couldn’t be more fortunate than to have the situation I have now to be able to join Robert Yates’ organization,” says Rudd, “Robert knows the sport and the business side of it inside out. The bottom line for me is, as a driver, he’s got winning race cars.”

a family affair
     For Yates, racing is a family affair. “The key to this business is who has the most honest guy counting the money,” says Robert. In Yates’ case, it’s his brother Richard. “Growing up he was the most honest person I knew and he still is.”
    Yates’ wife Carolyn, who encouraged Richard during the difficult early years, successfully headed up the team’s merchandise operation for a few years before retiring. He has a daughter, Amy, and his son Doug, who got the engineering degree from N.C. State his father sacrificed, is responsible for the team’s engine program.
    For a few years, Robert and Doug worked side by side building engines. Robert, who spent so much time working when Doug was a boy, relishes the time he now has to spend with him.
    Of course, racing isn’t the same as it was when Robert started. The days of having 10 employees, driving the race truck to the track and changing tires at pit stops for Yates are long gone. They have been replaced by 143 employees, including tire changing specialists and in-house experts who in some cases come to Yates from MIT and NASA.
    Yates grins wryly as he looks over the vast array of high-tech computer testing equipment his racing team now uses. “Some of the things these computers reveal are what I could tell you just from listening to the engine,” he says. But as the costs to run a team grow, specialization increases and Doug takes on more responsibilities, Robert realizes his contributions to his team are changing. He’s still very much actively involved, but he’s definitely not a small operation anymore. Yates does own a boat in Florida, but all things being equal, he’d much rather be at the garage working on an engine.   
    Mike Hargrave of Texaco recalls  what happened after a spectacular crash that involved one of Yates’ cars at the Bud Shootout earlier this year.
    “When they brought the car back into the garage area, everybody was gathered around taking photos.
    “Robert was looking at the crew working on the car, and the mechanic in him just wouldn’t let go. He finally grabbed a saw from one of the guys and started sawing off the front fender of the car. He loves what he does.”
    And he’s not about to stop now.

     “We decided to focus only on quality custom work and it was a gamble.”
So says G. Michael Walker, president and founder of G. Michael’s, a premier display design firm in Charlotte. Few people think about display design, but this competitive, if not hidden industry is big business. Walker studied the market and positioned his company for explosive growth. “We made a strategic decision that we were not going to be another large retail outlet,” he explains. “We were going to be a boutique, which meant we had to be better than everybody else.”
    Walker’s gamble has paid off with bigger, better facilities and more employees to handle the growing number of clients. Display design combines the best of art, engineering, technology and imagination to create sets for television, museums, theme parks, trade shows and much, much more. G. Michael’s boasts an impressive client list that includes corporate powerhouses and nationally known brands. Today most clients come to G. Michael’s by referral. But it wasn’t always that way.
    Back in 1981, G. Michael’s was a fledgling design firm with only three employees. “When I started out, we were set designers,” Walker recalled. “We would design and build sets for TV commercials.” In the era before North Carolina’s appeal to the film industry, Charlotte was a booming town for commercials. Jefferson Productions (now Jefferson Pilot) and other major production companies generated much work for the tiny firm. “The first year we were in business, we did 70-75 sets for commercials.”
    The company had a curious business mix, with television and theme park attractions.
    Then Jefferson Productions exited commercial-making. Walker had to think fast; his business depended on it. He instinctively chose another revenue channel.
    “When I was in college, I had designed a couple of exhibits, so I decided that maybe the exhibit industry was the one to go into. We started doing exhibits and it just took off.” 
    By then, Walker’s wife, Bunnie, had joined the firm. With a strong background in sales, she drummed up new clients in the trade show exhibit business. Bunnie made cold calls, generated new business, and took tighter reigns over the company’s financials. The business began to grow. Walker’s innovative designs and commitment to customer relationships also had an impact. “We had a lot of success because we had a lot of new ideas.”
    Despite his promising future, Walker still had a tough time sleeping at night.
    “I used to worry about going bankrupt every day. That really bothered me.” He was also concerned that the business was not well-capitalized. Funded through private sources, Walker wondered if the company had the resources to thrive.
    “We were growing only in bits and pieces,” he remembered.
     At that time, G. Michael’s was not only fabricating $50,000-plus custom trade show exhibits, but also selling less expensive, modular “pop-up” units. “We were trying to be everything to everybody,” Walker explains. “We were pulled in a lot of directions.” He also wanted to expand his revenue mix to other areas. Walker took a hard look at his firm and changed its direction. The firm discontinued selling portable modular exhibits in 1994 and hasn’t looked back since.
    “When we decided that we were going to be the best at what we do – that’s when we really began to grow. For the last couple of years, I’ve relaxed, not worrying about success or failure. Our focus is on growth.
    “Today, we don’t market trade show work, we don’t make cold calls. About 99 percent of our trade show exhibit business comes from people who see our work in a show hall and come to us. That side of the business has grown in spite of ourselves.”
    About three years ago, the firm ventured into the world of museum exhibits. Although museum designs tend to require more technology than trade show work, Walker finds this segment rewarding. “It has more permanency, ” he notes.
    G Michael’s now has five designers and one individual whose sole responsibility is exploring new technology. “That’s why we’ve really grown in the last three to five years,” says Walker.
    Companies also flock to G. Michael’s because of its commitment to customer relationships. “We are image builders,” Walker clarifies. “It’s important for us to know the clients inside and out. We have to understand the client’s products, how they sell, and their competition to do a good job.” This strategy has afforded the company a diverse and loyal clientele.
    Today about 50 percent of the firm’s revenue comes from trade show exhibits; 40 percent from museum exhibits; and 10 percent from television sets, corporate lobbies, and show room displays.
    The challenges Walker now faces  are different from the ones he dealt with several years ago. “Labor is always a challenge,” he comments. “A lot of kids come out of college without the right tools for this industry. Graduates know theory and how to use software, but not design basics. What’s more, high schools don’t teach industrial arts anymore, so our work pool [for fabrication] is smaller.”
    A graduate of South Mecklenburg High School, Mike Walker took a circuitous route to custom display design. “I was going to be either an architect or a preacher.” But after briefly attending UNC Charlotte’s Architecture and Engineering School, he left to join the Navy. Four years later he returned to Charlotte and received an associate degree from Central Piedmont Community College in graphics arts.
     A born conceptualizer with a gift for design, he applied to Appalachian State University’s program in Industrial Technology. “Industrial technology involves design, plastics, metals, wood, electronics – a little bit of everything.” He grins. “Every day of my career I use something I learned in college.” With a business minor, Walker obtained his bachelor’s degree in 1977.
    Walker moved to Atlanta, where he headed up the research and development department for a large point-of-purchase manufacturer. Disenchanted with Atlanta, the Carolina native returned to Charlotte, working as a senior designer at another firm. After a few years, he struck out on his own.
    Display design is both a creative and exacting craft. The G. Michael’s design team is well versed in graphic design, architecture, technology, museum design, three-dimensional design and interior design. Although computer skills are crucial, the ability to conceptualize an idea is what drives the process forward.
    After a year in its current location, Walker is already expanding. “We’re probably looking at another 11,000-12,000 square foot addition in the very near future,” he estimates.
    G. Michael’s is a family affair. Walker’s wife, Bunnie, is executive vice president in charge of new sales. He praises her business acumen. “She’s been the biggest asset to the firm. I couldn’t have done this without her.” Their son, Todd, a graduate of the Savannah College of Art & Design, is a designer.
    Walker’s younger brother, Terry, is vice president of operations. Mike Walker still spearheads the creative aspects of the firm and is assisted by David Carpenter, who is vice president of design.
     At 50, Walker hasn’t really slowed down enough to truly savor the fruits of his labor. But he’s working on it. “I want to continue to grow the company, but focus on the next generation. I want to empower my employees to run this business without me. Someday I expect to retire and just go diving with my wife.”

     These days, he gets to write to his heart’s content as the head of his own recording and audio production studio. After a 20-year detour in the radio business, it’s music to his ears.
     No one at Fred Story Productions works. Even so, this Charlotte-based audio production company continues to expand its business nationally and internationally as it racks up one award after another. “When you’re doing what you’re passionate about, it’s not work,” explains composer and president, Fred Story. His seven-person company provides original music, audio post-production and sound design services for advertising, corporate, multimedia and film clients. Last year they brought home Emmys, ITVA Silver Reel, Silver Telly, Addys and Silver Microphone awards.
    To keep up with growing demand, the company recently added a 500-square foot oak-trimmed recording studio, complete with a Yahama C7 grand piano and state-of-the-art acoustics. It’s just one more step forward for this creative troupe of audio artists.
    Fred has a very disciplined, creative abandon,” says Gary Ludwick, president of The Creative Department. Ludwick has worked with Story for over 10 years. “He’s not just a music writer. He takes my concerns about a marketing problem and comes back with a good answer. His solution makes the marketing effort stronger by complementing the logical side with an emotional composition.
    “You previously had to go to Atlanta, New York or L.A. for music production. Now the only reason you go there is for recreation. Fred was one of the first people to fill this niche and do it well.”

the vibe
     Ludwick attests to the exemplary rapport among the company’s team, seeing it as a major contributing factor in their success.
    “I’ve never seen such a homogenous group,” he says. “I did over 200 radio spots with them last year. We worked every day with literally an hour or two turnaround. You can’t do that kind of rapid turnaround unless you have a group of people who are really functioning smoothly. I never had a dropped ball even with the volume of work and the high pressure atmosphere.”
    Story feels “blessed that the people who work here found their way here.” He boasts, “They’re just as passionate about what they do as I am about writing music.”
    Providing his team with a sense of ownership in the company demonstrates his admiration for their abilities.
    “There’s little we keep private other than individual salaries,” he explains. “Bills, financial goals and company goals are clear and laid out, and everyone contributes.”
     His wife and business partner, Becky, sums up the atmosphere with the word “family”. Story readily agrees.
    “It has been a most pleasant surprise. I’ve worked with amazing levels of teamwork in the past but never encountered what’s existing within these walls. Musicians call it ‘the vibe.’ The people here will step forward and offer assistance if we’re overwhelmed. They’ll stay long hours. They love their work and love each other.” 
    According to Mike McGinnis, composer and sound designer, Story is a master at nurturing a working environment that encourages creative production, while at the same time making it loads of fun. The result is that quality and volume run at peak levels. 
    “Fred is by far more my friend than my boss,” McGinnis remarks, remembering the time the Storys showed up when his daughter was born. “You want to help your friends.”
    As for creative freedom, McGinnis and sound engineer Anthony Fedele have a passion in an area that will soon take the company into a completely new field. Story encourages their steps into uncharted territory.
    “Why not. They’ve won more awards for this company than I have for the last two years,” Story affirms.”It’s their dream.”

the interlude
    Story didn’t set out to build this type of business. A self-taught guitarist, he learned trombone in junior high band and later picked up piano. He thought he would teach and become a band director.
    “I remember when I was in eighth grade, Dad gave Mom a gorgeous set of crystal water goblets for their anniversary. There happened to be 12 of them,” Story recounts. “After she opened them, they went out for an anniversary dinner. I filled a pitcher with water and spent hours tuning them. I had just begun playing Alley Cat on the goblets with two butter knives when they walked in the door. That was trouble.”
    Undaunted, he eventually rose to All State trombone player at Unicoi County High School in Erwin, Tenn., entertained several scholarship offers and settled on East Tennessee State University majoring in music education.
    However, his music career was waylaid. What began as a part-time job in high school at a radio station ushered in a 20-year radio career.
     In 1981, he landed a job in Charlotte with WBCY, FM 107.9 – now the LINK. There he met Becky Kent. They married in 1982. She would contribute tremendously to the building of his future award-winning company through her writing, vocal and dramatic talents as well as administrative proficiency.
    “Fred would tell me about this dream but I never realized the scope of it until we moved here,” she admits, gesturing around their studio on South Church Street.
    Back then Becky was broadcasting the overnight show. Fred was hosting the afternoon show. To keep his fingers in music as he rose through radio’s ranks to creative services director, he wrote commercials and jingles. He also played keyboard and wrote music for the band he pulled together – Flight 108.
    Although the band was together 13 years, appeared with artists like Ray Charles, Kenny G, Earl Klugh and Dave Valentin, and produced four records, Story considers himself only a mediocre musician.
    “I’d sit down to practice at the piano and within five minutes be writing a tune. Five hours later I’d get up and hadn’t practiced a bit – but I had something written.”

the music teacher
    Realizing he needed help, he began taking lessons with Ziggy Hurwitz, a New York ballroom pianist who played with great big bands like Woody Herman. When Hurwitz moved to Charlotte, he taught and performed music and was the musical director for shows that came through town.
    “Within five minutes Ziggy looked at me and asked me what I really wanted to do,” Story reminisces. “I told him I wanted to learn piano. ‘I can’t help you then,’ he told me. He leaned closer and asked me again, ‘What do you really want to do?’ ‘Compose’, was my answer. ‘Oh! I can help you with that’.”
    That began a seven- year relationship that undergirded Story’s career. 
    “Everything that really matters about music, everything I carry with me, I learned from Ziggy,” the 44-year-old with the deep, husky radio voice says as he becomes emotional. “He was a faithful mentor who had a way of broadening your horizons so much you realized what you didn’t know. He retired and moved to Florida and passed away shortly afterwards.”

hitting the right notes
     In 1983, John Shreves was working on a pilot for TV for Jefferson Productions and asked Becky to co-host the show.
    “I asked what he was doing for theme music,” says Story, “and asked him to let me write a theme. If he didn’t like it, he didn’t have to use it.” Shreves liked it. The following week, on his recommendation, Archdale Advertising asked Story to write a jingle for a TV spot. Two weeks later another producer called.
    “I’d bring jobs to Ziggy. He’d critique them and help me do the next job better.”
    Even so, it was a long time before Story would call himself a composer. 
    “It felt too lofty. I remember the day I came in really frustrated asking, ‘What am I doing? Why am I bothering? I want to achieve something….significant? Ziggy offered, ‘Don’t worry, you’ll get over it.’ It was years before I understood. That’s not what it’s about. It’s about doing this thing you do right now the best you can do it. That’s the path.”
    Story never saw himself as an entrepreneur either. 
     “I liked the security of collecting a paycheck and having benefits. Becky and I struck a deal. Freelancing would be an added source of income. I’d take the money I made writing on the side and reinvest it to build a studio – all except enough to take a vacation every year. When I was making the same amount I made in radio and saved enough to pay the house mortgage for a year, I’d quit radio and go into business full time.”
    After each job, he’d plan what piece of equipment he would buy to make the next project sound better.
    “My studio in the spare bedroom became a beast. It was so crowded, I’d run a mic into the next room for singers.”
    As demos became more sophisticated, Story had to learn to run a recording studio. David Floyd, sound engineer for Flight 108, became his next mentor.
    Musician friends would come to his house and demo the project  – “hoping our neighbor wouldn’t fire up the lawn mower right then,” interjects Becky.
    “Once I landed a job, I’d hire musicians and go to a real studio to produce a track,” says Story. “All this was just a means to an end. All I wanted to do was write music.”

i write the songs
    “I moved out of the house in 1990 into a 300 square foot space on 8th St. to see what would happen. On my lunch hour, after work and on weekends, I’d do sessions for clients. Revenue doubled and I realized the power of perception.”
    That year he met his goals. The FCC also rescinded the duopoly rule allowing ownership of multiple stations.
    “My workload doubled with the same salary. I saw the writing on the wall but I still wasn’t ready to make the jump,” he admits. Story made an appointment with General Manager Reta Thorn to set up a plan to transition him out.
    “That’s when it hit me,” he says. “I was being a wimp. The only way this would work was to make a commitment and do it. I handed in my resignation.”
    “I was so busy I kept asking Becky to help me write lyrics. After a few spots, I realized she was really good. She became the designated writer. I kept her so busy that in 1994 we had a discussion over a McDonald’s fish sandwich and she finally resigned from radio.”
    The Storys carefully gathered their team. They saw the value in finding people who excelled in their craft and giving them the freedom to do what they did best. Along with McGinnis and Fedele, Barbara Lewis, a singer looking to do music on her own terms, became production coordinator. Melissa Curlin became production assistant. Until 1999, all their business came by word of mouth.
    “We’d thrown together a brochure and demo for referrals. It had a 30 percent hit rate. In 1996, Gary Ludwick, my marketing mentor, convinced me that I needed a really good CD/brochure package. It was a lot of money, but he put it in terms of how many jobs it would take to pay for it and I saw the value. I felt we owed it to ourselves and to those who referred clients to us to have something professional to send out. He wrote the script and warned me not to send it out unsolicited or I’d have more business than I could handle. The next year, our hit rate from referrals jumped to 70 percent.”

the beat goes on
     By 1999 Story had a good foundation in the region, but had a national and international vision. Making that vision a reality became Kenn Buckner’s job as director of sales and marketing. The vision included film scoring, which has materialized this year. Story’s current project is full orchestrations for a French film, Le Chemin Du Retour, directed by David Murray. And another director is already knocking on the door.
    In this technological age, the potential seems limitless. “Audio is no longer the stepchild,” Story expounds. TV has progressed from mono to stereo and we have the capabilities for 500 channels, all needing music. With home theater systems, music and sound are becoming increasingly more important to the success of a production.
    “Multimedia is an entirely new field. There’s so much to learn, like how you would treat music differently in one form of media than in another. It all bodes well for our industry.”
    Story has one major rule for planning for the future: “I look ahead five years and imagine myself doing what I’m doing now. Then I ask, ‘Will that be fun?’ When the answer is no, it’s time to do something else.”

Now we’re talking about underwear on the Internet. Well, men won’t talk about it in the department store or anywhere else in public, so why not a specialty Web site? After all isn’t that easier than asking the 19 year-old female clerk at the store “Just how do these briefs fit?” Belmont-based yourunderwear.com caters to men who don’t like to buy at stores by providing designer quality undergarments – everything from T-shirts to socks and of course underwear – on the Internet.
    “Undees, skivvies, undershorts…There are only so many ways to say underwear – and after all, that’s what we’re talking about.” Nolan Mills smiles as he describes how the company got its name. He and his partner Jimmy Poag have the background to make this site successful. Poag’s 15 years of experience in underwear engineering fit with Mill’s 10 years’ experience in the textile industry; together they know underwear.
    Native Charlotteans, the two men met through mutual acquaintances in early 1998. Not long after, they put their heads together to go into business. While all duties are ultimately shared, Nolan Mills manages the marketing and Jimmy Poag is responsible for the technical aspects of the products. Both are involved with client satisfaction.
     The two entrepreneurs’ strategy is to market a high quality product with a level of customization no other company offers, and to use the Web to keep prices competitive. They have taken the attributes of top designer brands and rolled them all into a single premium line of men’s undergarments. Along the way, they have made some improvements. The T-shirts are longer, the briefs fuller, and the socks softer than comparable products.
    In July 2000, when the site is revamped, clients will be able to customize the fit even more. As Mills explains, a 6-foot tall man and a 5’5″ man, each with a 42-inch chest and 34-inch waist, need different lengths in their T-shirts and in the legs of their boxers. One size really does not fit all. Taking this into consideration, your-underwear.com will offer more varieties of sizes that are suited to men’s different body types than the traditional small, medium, large and extra large method. The site will have a table with height and weight that customers can use to find just the right size product for their body shape.
    But even with all their customization, Poag and Mills are able to keep costs down by using the Web to sell directly to the consumer. By simplifying the packaging and eliminating the overhead that brick and mortar retailers encumber, their prices are competitive with comparable retail brands.
    Their knowledge of the industry and how sizes and qualities differ should also give the two men an edge. Little things like knowing knits only shrink seven percent, while boxers don’t shrink at all, are important when calculating size and fit. All of the yourunderwear.com products are made in North Carolina by Beltex Corporation, a manufacturer of premium undergarments for over 55 years.
    It’s not that most men don’t care about their underwear, it’s that they don’t make time to buy it. They let the women in their life purchase underwear for them. In fact, more than 70 percent of all men’s underwear is bought by women. So Mills and Poag are letting their clients, both men and women, discover what they like from their Web site.
    Men may want to try the boxer briefs or boxers, but they really don’t want to agonize over the decision with a clerk in a department store comparing brands, prices and fits. “That’s why most men buy something and wear it until it falls apart,” say Poag. “We want to offer men an easy way to figure fit and pick a style. Try it. If you don’t like it for any reason send it back.” They really mean that too.
    Since November of 1999 there have only been two returns which resulted in exchanges for size, beams Poag. “I’m not saying that something couldn’t slip through, because anything is possible, but our quality control process is quite detailed. It is checked at every stage of manufacturing, including being checked by a Zero Defect team, and again at packaging. The little stickers you see when you unpack the garments – ‘Inspected by #7’ – well there really is a number #7.”
    Not that there haven’t been some challenges to overcome. They had a great idea, the business experience, but not the technical expertise to bring the dot com to life. They found an advertising agency, a web boutique and a hosting company and utilized their own graphics talent to design the site. The Web site went live November 15, 1999, coupled with local advertising on television and radio. The original hosting company wasn’t able to keep up with the demand, though, which caused the Web site to stall or fail to load altogether. It’s the kiss of death for a dot com. “It’s quite serious. You can lose a customer in 16 seconds on the Web,” says Poag. As of January 2000 they were using a new host provider and the Web site problems have been resolved. This summer, they are planning a major nationwide advertising campaign to announce the revamping of the site.
    Yourunderwear.com is designed to provide premium quality underwear, at half the designer prices, with accurate fit for a client – who really doesn’t want to shop for them at a store anyway. They’ll even offer you the opportunity to subscribe to regular shipments on a schedule that you determine. Either way, they’ve got you covered.


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