Featured In Issue: CLT.biz Insights 16.09.08
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For decades, the American economy grew and prospered thanks, at least in part, to the post-war manufacturing boom. American companies found that domestic markets provided robust demand for their products, and sales and profits soared.
But over the last 30 years, as globalization and automation have changed the nature of American manufacturing, many industries have moved their manufacturing operations overseas. As our traditional manufacturing base began to erode, the high-paying manufacturing jobs of the 1960s and 1970s relocated abroad.
This shift of manufacturing to offshore locations helped give rise to new, growing middle classes in places like China, India, and Brazil. So with domestic purchasing power stagnating and new wealth being created abroad, American companies are increasingly looking to these new global markets as fertile ground for their products and services.
Thanks to the Internet and online commerce, gone are the days when only large multi-national corporations can be meaningful players in international trade. Today, small and medium-sized businesses can easily connect with buyers around the world. That’s the message that Greg Sizemore, director of the Charlotte U.S. Export Assistance Center, touts.
Right now, he points out, the United States represents only about 5 percent of worldwide buyers, so as domestic markets mature and emerging markets continue to grow, looking abroad will become increasingly important for more and more American businesses of all sizes.
Sizemore’s employer, the U.S. Commercial Service (USCS) is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration, and was established to help American businesses take advantage of opportunities in international trade. The USCS maintains 80 Export Assistance Centers across the United States and offices in U.S. embassies and consulates in nearly 80 countries.
The USCS trade professionals help connect U.S. companies with international buyers, while also providing market intelligence, trade counseling, business matchmaking, and advocacy/commercial diplomacy support. In North Carolina, the lead U.S. Export Assistance Center is located on East Morehead Street in Charlotte with satellite facilities in Greensboro and Raleigh.
In March of 2010, President Obama signed an executive order establishing the National Export Initiative (NEI) with the goal of doubling U.S. exports by the end of 2014. The Obama Administration sees increasing exports as an ideal way to create more U.S. jobs and boost the economic recovery.
In 2012, U.S. exports hit an all-time record of $2.2 trillion, despite significant economic headwinds from Europe and other parts of the world. Exports as a share of U.S. GDP were 13.9 percent, tying a record set in 2011. Growth in exports to America’s free trade agreement partners as well as record exports of motor vehicles and agricultural products were key contributors to the success.
In North Carolina, exports of merchandise totaled $28.7 billion in 2012. Canada is far and away North Carolina’s largest trading partner, representing over 24 percent of the total. Fast growing China, with 9 percent of N.C. exports, has now surpassed Mexico’s 8 percent. And while Europe is a tough market for exports due to high barriers of entry, if looked at collectively, the European Union would be second only to Canada for N.C. exports.
North Carolina’s largest export category is chemicals, accounting for over 18 percent of total merchandise exports in 2012. Other top categories include machinery, transportation equipment, computer and electronic products, and textiles and fabrics. And whether its sweet Muscadine wines from the Yadkin Valley that are becoming hot sellers in Asia, aerospace products from a bevy of component manufacturers in Monroe, or a rapidly expanding energy services sector in Charlotte, North Carolina’s export base continues to diversify.
The Charlotte-Gastonia-Rock Hill metropolitan area is the state’s largest export source, generating $6.3 billion of exports in 2011. Greensboro-Winston-Salem was second with $5.4 billion, and Raleigh-Durham was third at $4.9 billion.
“We used to spend a lot of our time telling companies about the benefits of exporting,” says Sizemore. “But these days, we don’t usually need to have that conversation because as soon as a company puts up a website, whether they know it or not, they are competing globally.
“We tell our clients to consider going to those parts of the world where their competitors are not,” continues Sizemore. “We tell them to look at Latin America, Asia, Eastern Europe, the Middle East, and even selectively at markets in Africa.”
Sizemore says there are a number of key benefits of exporting in addition to simply growing the market for their products or services. He points out that business cycles vary around the world, and when growth slows in one place, it’s often accelerating somewhere else. Exporting allows a company to offset a downturn in one region by looking for new opportunities in another.
Exporting may also allow a company to extend the life cycle of their products by introducing them into new markets. Products that no longer sell in the U.S. often still have viable markets abroad, particularly in the developing world.
“A great example of life-cycle extension are the components used by the textile industry,” explains Sizemore. “A lot of that manufacturing has gone abroad, so those component manufacturers are able to follow that work overseas. The developing world also buys products that support more labor-intensive work that we don’t have much need for in the U.S. anymore.
“Some of the companies that we work with say if not for exporting, they might have gone under in 2008,” continues Sizemore. “Not only that, they often tell us the tweaks they made to their products to compete globally helped increase the product life cycle here at home. If they had never looked overseas they would have never made those innovations.”
Selling Worldwide Opportunities
The U.S. Export Assistance Centers exist primarily to serve small and medium-sized businesses. Over 8,700 companies exported products from North Carolina in 2010 (the most recent data available) and over 88 percent of those were businesses with fewer than 500 employees. But only about 1 percent of all small businesses export, and of those, about 60 percent are exporting to just one or two markets.
The Export Assistance Center says their typical client is a business-to-business supplier providing a solution for a manufacturing process. As a lot of heavy manufacturing has shifted overseas, they are seeing increased demand in the U.S. for higher-tech light manufacturing that supports those industries that have moved offshore.
“People often ask us where they should export, but I think it all comes back to their product,” says George Thomas, senior trade specialist with the Charlotte U.S. Export Assistance Center. “We have to take a look at the product and where it might make sense, as well as the skill set in the company and their experience in exporting. We try to create a customized export plan for each client.
“I have an aerospace client from up in Mooresville that will be exhibiting their armed surveillance airplane at the Paris Air Show this summer,” Thomas continues. “We sent their literature to our Embassy in the Philippines, put an Embassy letter on top of that, and hand-delivered an invitation to the Philippine Ministry of Defense officials that might be attending the air show. We’re also doing a similar thing in Indonesia and Bulgaria.”
The hallmark of the Export Assistance Center’s offerings is their Gold Key Service which helps introduce small businesses to potential export markets. Commercial specialists in an overseas U.S. embassy or consulate help evaluate the company’s products for fit in their market. These specialists come from the business community in that country and know the language, customs and culture. They also help identify potential agents that can sell the company’s product locally.
“To get the process started, we’ll do a conference call with the industry specialist in the embassy that is going to help that company find partners to work with,” explains Thomas. “The company sends over its marketing literature and we put embassy letterhead on it and it gets sent out to potential partners and agents.”
“Our goal is to get people on airplanes and in front of qualified buyers overseas,” adds Sizemore. “Building that relationship is still critical in global business. We’ve got a lot of great technology out there, but there is no substitute for building those relationships.”
Based on the profile of the client’s typical buyer, industry specialists in the overseas office will pre-qualify agents and distributors and set up meetings for the company. Before they get on a plane at Charlotte-Douglas, the company already knows whom they are meeting with, they have an itinerary, and in some cases, they’ve already begun to correspond.
Local in-country staff meets them when they get off the plane, a driver helps them negotiate the city, and an interpreter is on hand for the meetings. Within two days they could meet with 10 or 15 folks.
The Export Assistance Center also conducts six or seven Export University seminars around the state, with two being held this year in the Charlotte area. The program covers the essentials of exporting—how to get paid, how to ship, how to find qualified buyers overseas, and how to comply with U.S. export regulations.
The North Carolina District Export Council, one of 56 District Export Councils in the U.S., sponsors Export University. The District Export Councils are not-for-profit private sector organizations whose members are appointed by the Secretary of Commerce and which work closely with the U.S. Export Assistance Centers to help small and medium sized businesses that want to export their products.
The U.S. Export Assistance Center trade specialists all have years of international experience as well as private sector business experience, and many have lived overseas. Most of the export counseling services they offer are free of charge, with the primary exception being the Gold Key Service, which costs a small business $700 per trip, plus the costs of drivers and interpreters. The Export University is $65 per attendee, but those funds go to the District Export Council that then uses the funds raised to provide stipends of up to $350 to companies to help defray the cost of using the Gold Key Service.
“Every day we’re on the phone, sending emails, coordinating conference calls with our overseas posts, looking at market intelligence for a company, looking at a target market, assessing standards, assessing documentary requirements, or maybe getting that random call to help solve an export-related problem for a client,” explains Sizemore. “We answer all those calls and its all for free in our U.S.-based offices. But when things go overseas, our overseas offices work on a cost-recovery basis, so that’s why they charge for Gold Key.”
Besides the U.S. Commercial Service, the Small Business Administration also has their regional international trade finance specialists co-located in the Charlotte Export Assistance Center. The Export-Import Bank and the N.C. Small Business and Technology Development Center also have an employee in the Charlotte office one day a week.
Charlotte: Global Trade Center
“This city is quickly coalescing around trade and I think Charlotte is positioning itself to compete globally in international trade,” says Sizemore. “A big driver of that is going to be the new intermodal center at the airport, but I also think you have some great resources out at Central Piedmont Community College and UNC Charlotte, and I think those resources are going to generate new ideas for export education and high tech products that can be quickly integrated into trade and manufacturing processes here in Charlotte.”
Sizemore thinks that Charlotte area companies are going to see increased access to export resources and those who support the export business—including private sector folks that provide freight forwarding services and the international departments at the banks— are going to see more demand for their services.
He also points out that with increased exports come higher paying jobs. Americans working for firms that export earn, on average, 15 percent more than those who work for non-exporting firms.
“A lot of this is just good timing and a number of things are coming together that will make a difference in a very short amount of time,” Sizemore predicts. “We’ve got the intermodal center coming on line at about the same time as the expansion of the Panama Canal, plus we’ve got the President’s National Export Initiative as well as state and local initiatives like the Mayor Foxx’s Export Charlotte. It’s really an exciting time to be involved with international trade in Charlotte.”
A lot has changed since the third century BC when Archimedes singlehandedly brought inventions from the drawing board to the battlefield. The Greek mathematician was a genius at applying science to the practical problems of his day and for transforming ideas into innovations.
Today the roles Archimedes played—researcher, inventor, funder, prototype builder, marketer and manufacturer—are distributed throughout any number of individuals and institutions. To stitch them back together, we moderns need offices, administrators, brokers, professionals, even legislation.
The name for the stitching operation is technology transfer. Sometimes called “technology commercialization,” the term applies to the process for turning an invention into a manufactured product. The term originally had a more limited definition, one that centered only on federally funded research.
At the University of North Carolina at Charlotte (UNC Charlotte) Office of Technology Transfer, staff members collate industry, state, local and federal government-funded research into the one product Charlotte craves: economic development.
Refining the Patent Process
Before 1980, federally-funded research was difficult to commercialize. That unfortunate situation resulted from good intentions gone awry.
In the early 1940s the federal government actively funded the invention and construction of weapons with war-winning potential. The proximity fuse that knocked out German V-2 rockets and the atomic bomb were two of their headliners.
Flushed with success and convinced that science was the key to social, economic and military progress, the government continued spending on university-based R&D after the war. At the time, it seemed prudent to retain the patents on every invention they funded. But there was no unified or consistent policy across government agencies for granting licenses to commercialize its patents. That meant miles of red tape for any business brave enough to attempt a transfer of technology from the government to the private sector.
By the end of the 1970s, the U.S. government had accumulated 28,000 patents with fewer than 5 percent commercially licensed. Faced with shuttered steel mills, a tsunami of automobiles imported from places other than Detroit, and a mid-1970s stagflation, Congress acted to free up the patent log jam. The Bayh-Dole Act of 1980 was their stick of dynamite.
The act coined the phrase “technology transfer.” More importantly, it reversed, decentralized and revolutionized ownership of government-funded inventions and discoveries. Academic institutions that carried out the actual research now owned the inventions, not the government. They were also the ones responsible for commercializing research findings.
This meant starting a small business or “spinout” with or without the participation of the inventor. It also involved granting licenses to the inventor or others so they could capitalize on the university’s patents. The act also insured that inventors shared in any income derived from the production of their ideas.
“Since Bayh-Dole, there is little doubt that academic technology transfer has had a positive impact on the economy,” says Jodi Talley, director of communications at the Association of University Technology Managers (AUTM). “Technology transfer spurred the creation of 670 new companies and 591 new products in 2011 alone.”
In 2002, The Economist named Bayh-Dole “the most inspired act of legislation over the past half century.”
“The [Bayh-Dole] Act was a great first step,” says Carl P.B. Mahler II, executive director of UNC Charlotte’s Office of Technology Transfer and a patent attorney. “If the feds want to be serious about doing technology transfer, they need to go the next step.
“That involves money,” continues Mahler. “Congress can remove a large stumbling block for universities by authorizing the National Science Foundation (NSF) and the National Institute of Health (NIH) to make grants for two tech transfer expenses: prototype building and patent applications.
“It wouldn’t take much money,” he says. “If NSF and NIH added an extra five percent to every grant they fund that has industrial relevance, that would speed commercialization at every American research university.”
Processing Ideas at UNC Charlotte
Even with Mahler’s expertise as a patent attorney and the work of Associate Director Brad Fach who is a patent agent, the patent process averages $10,000 but can be as much as $20,000. UNC Charlotte provides funds for about 20 patent applications per year.
University-based research is certainly intellectual, but it is not necessarily intellectual property. To achieve that status, discoveries are awarded a patent, copyright, trademark or declared a trade secret. All four are designed to reward clever inventors and risk-taking manufacturers and to prevent unauthorized use, manufacture or duplication. Only the first two are pursued at UNC Charlotte.
Patents and copyright protection begins with an invention report; UNC Charlotte receives 40 to 50 each year. “That is almost off the chart for most universities,” says Mahler. He is not blowing smoke
Using 2010 AUTM data, UNC Charlotte with $35 million of research ranks fifth among 148 research universities in the United States and Canada in terms of new inventions reported per dollar spent on research.
The typical research university averages one startup for every $50 million to $60 million in research done annually, Mahler estimates. UNC Charlotte is creating one for about $10 million in research.
For most of its inventions, Mahler’s office quickly produces a provisional patent application, an internal document that establishes an early priority date for an idea. This is important because the America Invents Act, which recently took effect, changed the U.S. to a first-to-file country from the former first-to-invent model.
“Having a working prototype usually no longer has a bearing on whether or not a patent will issue,” explains Fach, “unless the patent pertains to an area such as biotechnology where it is not clear whether or not an invention actually works. In those cases, a working prototype can be necessary.”
“For, say, mechanical or electrical devices the science is so well understood that the patent office can look at the invention and determine whether or not it will work,” Mahler adds, and jokes, “although you’d probably need to provide a working prototype before you can get a patent on a perpetual motion machine.”
UNC Charlotte’s obtains five to 10 utility patents per year. As per Mahler’s Patent Primer, a utility patent protects a “process, machine, article of manufacture, composition of matter, and improvement of the preceding items.”
Among the 148 AUTM universities, UNC Charlotte ranks third in number of patents filed, 15th in patents issued, and third in new startup companies (all per dollar spent on research).
“With the exception of the 15, we have been among the top 10 universities every year for the past 10 years,” touts Mahler.
Fach adds, “AUTM rankings are all calculated on a ‘per dollar spent on research’ basis. Schools like MIT and Stanford that have huge research budgets dwarf us in terms of the raw numbers of patent filings, patents issued, and start-up companies, but when you look at the numbers on a ‘per dollar spent on research’ basis, UNC Charlotte really stands out—which means that we are consistently among the most efficient universities at turning our research into practical inventions.”
The Tech Transfer Process
Only about 25 percent of the UNC Charlotte researchers that file an invention report want to be involved in a startup company.
“We lose about half of those by attrition,” says Mahler. “Usually the better the researcher, the less likely you are to be a really good business person. It is the very rare person who can do both.”
Over the five-year period from 2005 to 2009, over 70 percent of UNC Charlotte’s inventions came from the following departments: Software and Information Science (71), Mechanical Engineering and Engineering Science (53), Electrical and Computer Engineering (45), and Physics and Optical Science (44).
Note the concentration of computer-related inventions. “We have a lot of world class researchers in computers largely because of our work with banks like Wells Fargo and Bank of America,” says Mahler. “Banks need cybersecurity and the ability to visualize Big Data—two areas where the university is particularly strong,” adds Fach.
Cleverness easily crosses department lines on the Charlotte campus. “There are fewer silos here than anywhere else,” says Mahler, who previously worked at research Goliaths Case Western Reserve University and Carnegie-Mellon University. To make his point, he cites an invention to blast kidney stones that came from the UNC Charlotte physics department. Another to prolong the viability of a kidney removed from a donor for transplant sprang from the minds of a UNC Charlotte mechanical engineer and a biology professor.
With 10 to 20 percent of their research sponsored by industry, Charlotte researchers are a practical lot. Many came to the university after years of work in industry. Their focus is applied research and their goal is quickly solving business-related problems. Contrast that ethic with medical research. In that setting, inventions are five to 15 years away from the operating room or pharmacy.
The general model for tech transfer begins with an invention followed by a patent owned by the university, a license for the exclusive use of the patent, partnerships with entrepreneurs, production, royalties paid to the university by license holders and possibly, the eventual sale of the spinout company.
Some ideas are in the middle of that process. UNC Charlotte owns the patent on Dr. Faramarz Farahi’s energy-generating fabric for tents, backpacks, awnings and curtains. The fabric itself remains nameless, but its potential for military use and for generating small amounts of energy from the sun might be called revolutionary.
Dr. Farahi, a professor of physics and optics, has a few samples, an exclusive license to produce the flexible fiber optics-based product and a company name: Parasol. He lacks a production facility. He and his partners are discussing that possibility with a few companies, but none have signed on the dotted line.
The tech transfer process has moved further along for Dr. Pinku Mukherjee, associate professor of biology. She and Dr. Rahul Puri are cofounders of CanDiag, Inc., a Waxhaw, N.C. spinout. Like Dr. Farahi, the patent for their tumor antibody and resulting blood test is owned by the university, their employer, with CanDiag receiving a worldwide exclusive license.
The blood test has proved remarkably effective in the early diagnosis of breast cancer. After winning the $50,000 grand prize in the 2012 Charlotte Venture Challenge, Dr. Mukherjee herself proved effective in raising $500,000 more from venture capitalists. The patented antibody has the potential of locating a cancer site, finding where it may have metastasized, targeting drugs to the site, and checking on any possible recurrence.
Another company, founded as a startup in 2007, is even further along in the tech transfer process. Submarines use sonar to detect submerged objects; Charlotte-based InfoSense, Inc. uses acoustics to detect sewer line blockages. For cities plagued with Godzilla-size grease clogs and root breakthrough, that is a significant accomplishment. Sensor information allows crews to prioritize clog-busting maintenance and repairs.
InfoSense has been so successful that electrical and computer engineering associate professor and inventor Dr. Ivan Howitt has taken a sabbatical from the university.
Real Economic Development
Calyptix Security is even further along the tech transfer trail. Founded in 2002 and in production by early 2006, Calyptix provides military-grade computer security to small and medium-sized businesses. The type of technology Calyptix provides is far more dynamic and adaptive than the products of larger, more established companies such as Symantec and Norton.
Inventor Dr. Lawrence Teo founded Calyptix with UNC Charlotte professor Dr. Yuliang Zheng. Charlotte attorney Ben Yarbrough brought capital and business savvy to the firm. “The university’s technology transfer office is very easy to work with and supportive of our efforts,” says Yarbrough. “They want us to succeed.”
Headquartered at Ventureprise in Charlotte, Calyptix Security produces software that automatically knocks out worms, spyware, spam, denial of service attacks and other modern nuisances.
Only one of the university’s hundreds of spinouts has been sold. “It was a real home run for the university,” touts Mahler. Digital Optics Corporation, the Charlotte manufacturer of the lens in smartphones and other innovations, sold to Tessera Technologies, Inc. in 2006 for $60 million.
“We didn’t get much in terms of payout,” says Mahler, “but that is not how we grade ourselves. We like to look at the economic impact to the community and Digital Optics brought in 200 to 250 jobs.”
“Universities have a tendency to overvalue inventions,” says Mahler. Perhaps that holds true for community leaders as well. Invention is synonymous with new, creation, discovery and design, all long-standing American business values.
A more important value is in the relationship between businesses and the university. “We always want industry to feel they’ve gotten a good deal and our inventors to feel they’ve not been taken advantage of,” says Mahler. “Everyone needs to walk away satisfied and respected.”
“Universities that go into technology transfer expecting to make money are usually going to be disappointed,” maintains Mahler. “UNC Charlotte sees technology transfer in broader terms. It is a societal benefit to professors, sponsors, students and the general public. Like horse races, baseball games, the stock market and technology transfer, predicting success and making money are difficult.
“For us,” says Mahler, “the big measure is what we are doing to help economic development.”
Archimedes would be proud.
In a true reversal of misfortune, and a well-deserved one at that, the U.S. is experiencing manufacturing and employment rebounds by engaging in job-creating economic opportunities with the Asia Pacific region.
The global economic redistribution of wealth—an economic upheaval for the U.S.—has come full circle. That is, the same economic forces that have diminished our manufacturing capabilities and workforce opportunities are now the very same forces reigniting them to serve increased demand from abroad.
Fortified by the U.S. participation in the 2009 Trans-Pacific Partnership for economic integration in the Asia-Pacific region which represents more than 40 percent of world trade, the goals to increase American exports to Asia and create good jobs at home are largely becoming a reality.
The Charlotte-headquartered Tides and Times Group USA (TTG) is one such reality, increasing U.S. exports of hardwood lumber, creating jobs here in America, and revitalizing the region’s lumber industry.
Now in business for over nine years, TTG employs more than 200 people in the processing and exporting of hardwood lumber. In 2012, the company produced 12 million board feet of green lumber for domestic markets, and exported 4,000 40-foot standard containers of kiln dried lumber to overseas markets, primarily China and Vietnam.
It’s on target to produce and export 30 percent more this year, and stands as one of the top three hardwood lumber exporters in the U.S.
President Jimmy Lee and his wife and company owner Grace Lee came to the U.S. from China, branching across continents, with roots in each.
Vice President of Public Relations Larry Randall and Lee spend a lot of time traveling to TTG’s timber sites, sawmills and dry kilns across the Southeast. Randall remembers one afternoon when they were driving through a rural area and stopped at a convenience store.
“We were coming out of the store,” recalls Randall, “and Jimmy had an apple in his hand. I see him clean it, and he holds it up to the light, you know, and I can see his eyes are beaming a little bit. He looks happy. So we get in the car, and I say, ‘Jimmy, you really love apples, don’t you?’
“And Jimmy looked at me and said, ‘When I was a child in China, we were very poor, and sometimes I didn’t have enough food for school. There was a classmate whose dad had a little apple orchard, and a lot of times he handed an apple to me. Each time it was delicious, which never could I forget.’”
Lee smiles as Randall tells the story. “I cherish that apple,” he affirms.
Maybe it was the constant hunger, or maybe it was his family’s history as high-ranking members of society before the communist revolution—whatever it was, Lee always dreamed of being a businessman. He wanted to compete, and win, and make sure his family rose to the high level he wanted for them.
He knew he wouldn’t be able to afford schooling with expensive tuition, so he took advantage of lower tuition forestry universities to get his degree in wood machinery and master’s in wood science. After school, he went to work for International Paper where he rose quickly from salesman to sales manager.
During the 1990s and early 2000s, the political and economic climate in China changed drastically from when Lee was a boy. Instead of the government controlling everything, it started selling many government-owned companies to private individuals, and trade started to grow with the rest of the world.
By 2001, Lee saw that the tides were changing in his favor. He was approached by a lumber supplier in Taiwan, asking him to come work for them as a representative. He told them no, that he had a dream to work for himself. He would, however, be glad to work as a free agent, selling lumber in exchange for a commission.
They agreed. Perhaps because he offered to work for 3 percent, whereas most lumber reps demanded 6 percent.
It was a good deal for the supplier, and it worked well for Lee. Most reps lived in Taiwan, with higher living expenses, while Lee took advantage of lower costs in his country. Working out of home offices, he took advantage of low overhead, and in six months had generated the equivalent of $100,000.
“For somebody who started with $50, that was pretty good,” smiles Lee. Lee put the money straight back into the business, and by the end of 12 months had generated over a million dollars. And after that, revenue doubled every year.
Before too long, Lee began sourcing hardwood from America instead of Taiwan, where it had traditionally come from. He was among the first to do so. Little did he suspect that in a few short years, both he and his wife would be in America sourcing American hardwood lumber for their sales and distribution companies in mainland China and Hong Kong, Tides International Co., Ltd. and Tianrun Lumber Industry, Inc.
It happened in 2002—the event that changed the company’s trajectory. Lee had paid for two loads of lumber from a New York supplier, for a total of $38,000, and the supplier had disappeared without delivering the goods. Lee determined to come to America to take control and source his own materials.
Of course, coming to the States is not so easy as just deciding to come. It took a year to obtain a visa, and ultimately it was a student visa—to attend the National Hardwood Lumber Association’s lumber inspector school (NHLA) in Memphis.
An education at the NHLA is a ticket to significant opportunity in the American lumber market, says Lee. He had won entry into the school, and the visa to allow him to study, but he still had some big challenges in store—not least of which was the entirely new culture.
“I came into the States the last day of 2003,” recalls Lee. “In China, New Year’s Day is a happy day, when family gets together. So I came to the States alone and I felt really lost. I didn’t even know how to order a meal.”
He recalls being baffled by seeing the item “ranch” listed on a menu, and thinking that it must mean a really big meal, because he had learned that “ranch” means a large, expansive space for raising cows or horses. He became even more confused when the waitress explained that it was a dressing, because he knew “dressing” meant something to do with clothes.
“That happened to me quite a lot,” he says. “People laughed at me.”
Despite the challenges, Lee says America was better than he expected. The lady he rented from helped him with the language, and he did well in school. He liked the people and saw lots of opportunity. So he asked Grace to join him, and she too attended the NHLA training (and graduated at the top of her class, Lee is proud to share).
Within a year of graduating from NHLA inspector school, Lee started Tides and Times Group USA as a new company in the U.S. and won a work visa based on his investment in creating U.S. jobs. Grace joined him as a sales person a year later.
“She was born for sales,” says Lee. Very quickly, her performance outstripped the competition. Lee put her in charge of COCO Lumber, one of TTG’s subsidiaries. TTG, originally based in High Point, grew quickly. Meanwhile, the company in China was still growing fast, and Lee prepared to sell it so he could focus on the U.S. business. That sale was complete in 2008.
“I was working 16 hours a day through the week most of the time before I hired the first employee, Larry Randall, in 2007. Larry understands not only the culture of the Southeast, but also the hardwood connects and the nuances to this industry. With Larry’s valuable set of competencies to the company, I only need to work 12 hours a day,” says Lee.
Lee subsequently rounded out his top management team with the additions of Grace Lee, Herb Nanney, Ralph Laughter, Steven Wu and some other. He found that the Chinese competence and the southeast U.S. competence created a formidable partnership.
“Now you can see our growth,” nods Lee. “For export alone, we handled 37 containers in 2004, and that number increased to 220 in 2005, 460 in 2006, 902 in 2007, 1,548 in 2008, 1,753 in 2009, 3,225 in 2010, 3,821 in 2011, and 4,018 in 2012. The key is the managerial staff and company strategy.”
However, the company still had obstacles to overcome, the largest being the dwindling supply and increasing competition for export-ready lumber. TTG acted aggressively, purchasing green (undried) lumber, and having it custom dried. Then the company began purchasing sawmills, so it could buy standing timber and have it sawed, dried, graded and sorted in TTG facilities.
Once again, the timing was perfect. Most lumber buyers had hit a wall in response to the economy. Where they had always relied on short-term credit to make purchases, collecting revenue on the other end, credit was suddenly unavailable. Simultaneously, sawmills and drying kilns were shutting down all over the region as demand for their products dried up.
Lee’s financial strength, due to his business success in China, placed him in a perfect position to make cash purchases at historic low prices. As a result, since 2009, TTG has purchased, reopened and improved eight facilities in North Carolina, South Carolina and Virginia, including sawmills and hardwood dry kiln facilities.
Although the company still purchases about half of its kiln dried lumber need, it has also continued to purchase sawmills and dry kilns across the Southeast. TTG’s subsidiaries now include Oak Valley Hardwoods, Inc.; COCO Lumber Company, LLC; Tides International Company; and Bluesky Lumber Industry, LLC.
The company has created approximately 200 jobs, more than 140 of which were added in the state of North Carolina over the past three years. TTG expects to expand its business to New York, Pennsylvania and other Northern states in the near future.
TTG has come a long way from initially sourcing hardwood lumber from American lumber manufacturers. As the market has changed, the company has changed strategy and even begun marketing lumber in Vietnam. TTG is now one of the major oak-flooring suppliers to the U.S. flooring industry and one of the major hardwood lumber suppliers to overseas markets, especially China and Vietnam. Nearly 40 percent of annual exports are from the sawmills in the Carolinas and Virginia.
Randall says that size, and Lee’s reputation, have their advantages. Besides economies of scale, TTG is a preferred buyer across the region due to the size of their orders and the fact that sellers know they will be treated fairly. At the same time, Lee’s consistent record of fair dealing means that he can always export on a ship where many exporters are vying for limited space.
This combination of strengths has contributed to TTG becoming one of the top three lumber exporters in the country. Which is not, apparently, good enough for Lee. He plans to become the No. 1 lumber exporter within the next five years. And then he plans to start an entirely new business.
But, Lee says, they do plan to slow down slightly over the next few years, so he can stay healthy. Instead of shooting for 100 percent growth each year, they’re going to settle into only 30 percent.
Wood products imports are predicted to grow as China remains the global gorilla. North American lumber prices are forecasted to soar in 2013 and reach record highs in 2014. A new five-year outlook shows that supply and demand conditions in wood products for the long-awaited “super-cycle” are now taking hold, with the full impact still some 3-plus years away.
Lee is quick to credit the hospitality and support of the Charlotte Chamber, the Charlotte business community and the people of North Carolina. He’s also a member of the Chinese Chamber of Commerce. And he hasn’t forgotten those apples—he makes sure his companies give back to their communities regularly.
In retrospect, Lee says coming to the U.S. was the best decision they ever made. They love it here and they love Charlotte. Oh yeah, about that new business he’s going to start when he’s reached the top with this one? It’ll be a high end restaurant. Because for all his success, Lee hasn’t forgotten what it’s like to be hungry.
Based in Charlotte, Argus Fire Control designs, manufactures and installs automatic fire protection and metal detection systems to keep textile, non-woven and recycling businesses safe from fire. Many of their customers are cotton spinning mills which make the yarn or thread that goes into woven or knitted fabric. These mills are at a particularly high risk for fire.
“Over the past 20 years the production rate of spinning machines has increased in velocity, multiplying the risk of spark and fire” explains Michael Viniconis, who’s been president of Argus Fire Control for the last 10 of them. “Many modern mills run 24 hours a day and are almost ‘lights out’ with few people and only security cameras in production departments, making fire detection an issue.
“Argus products can extinguish a fire while it’s still a single spark. Our products can detect a spark and extinguish it or control it in less than 50 milliseconds—that’s one-20th of a second.”
Besides protecting people from injury, fire detection and protection equipment safeguards mill machinery which has an average value of $100,000 per machine and prevents loss of production time at an estimated rate of $2,000 per hour or more.
Argus also has products that detect loose metal traveling in production lines. “Metal will damage machines and cause sparks,” explains Viniconis. “Our products detect metal as small as two millimeters and remove it without interrupting production.”
Argus products include automatic fire protection systems for bale openers, infrared spark detectors, spark diverter systems, metal diverter systems, filtration system fire protection and their newest product, the high speed AD-50eC THS-TT Metal and Spark Diverter designed to be the most compact and sensitive product of its kind on the market.
Argus uses their products to design a customized solution for each customer. “Costs range from $5,000 to protect a small machine to $500,000 for a large mill installation. There may be multiple processes in cotton spinning mills and textile mills and each machine is a little different, requiring a different solution,” says Viniconis. “The mill will send us a machinery drawing and we’ll advise them on what they need, we’ll have a technical discussion and then we’ll put it all together.”
The roots of Argus Fire Control trace back to the 1940s and an Atlantacompany called Southeastern Safety Appliances which sold safety goggles and handheld fire extinguishers. Argus founder, Dick Thomas came up with the idea of automating the process.
Initially the company protected Southeastern U.S. spinning mills like Parkdale Mills, Frontier Yarns and Gildan. But as the textile industry—key industry for the Carolinas since the early1900s—started to shift, so did company operations.
“At one time there were about 600 spinning mills in the U.S.,” explains Viniconis. “Now there are probably 50. By the early 2000s much cotton spinning had shifted to Pakistan, India, China, Bangladesh, Brazil and Mexico. That business—and our customer base—began moving offshore.”
It was something that Viniconis himself had done. Growing up on a small Connecticut farm, he dreamed of traveling the world—a shortwave radio, a gift from his father, allowed him to listen to broadcasts of Radio Cairo and All India Radio and to fall asleep to the chimes of Big Ben from the BBC.
Later Viniconis studied International Relations at Colby College in Maine and received a scholarship to spend his junior year studying in Vienna and Paris. Graduation led to a 14-year career with KLM Royal Dutch Airlines.
Viniconis continues, “Luckily, Dick Thomas and his wife Jeanne, who ran the business together, had forethought. They had the vision to see that the textile industry might not always stay in the U.S. and were already exporting to Latin America and Europe. When I came on board in the 1990s, they tasked me with developing more business overseas.
“I figured I didn’t know anything about fire protection or textiles but after working at KLM, I knew about international trade. I found out quickly this isn’t something where you make one trip overseas and change your balance sheet. It takes years to develop some international markets.
“It was three years of travel to Pakistan—more than 10 visits—before we started generating business there. The management of most companies wouldn’t have the patience but Dick Thomas did. He said, ‘Just keep going. It’ll happen.’
“And it has continued to happen,” the veteran Viniconis says, his lifelong “travel bug” not yet satiated.
Argus Fire Control participates in an average of five major industry trade shows around the globe each year.
“Myanmar and Cambodia are new markets with trade shows coming up,” explains Viniconis. “At first I may just go to the shows as a visitor with brochures, business cards and an open mind. I meet the local companies, find an agent and then possibly exhibit at next year’s show.”
Viniconis is quick to point out that the encouragement of Argus’ international growth is strongly supported by company Chairman Bob Duncan and Vice Chairman George Wagner.
“They have invested a great deal of time, money and patience to reach current levels of exports in these markets, and they have carefully assembled a team of international-minded and dedicated staff, engineers and technicians to support this growth,” affirms Viniconis.
Argus Fire Control also takes advantage of the resources of the U.S. Department of Commerce and the U.S. Export Assistance Center (USEAC) to stay ahead of emerging markets. “The Department of Commerce has been instrumental in getting us overseas,” says Viniconis.
“They assisted us with raw data to identify markets we should consider. We still use them to identify new markets and different sales channels. They can open the doors to U.S. embassies and attaches around the world.”
The USEAC opened its Charlotte office in 1996. Greg Sizemore is the director. “Argus used our program called ‘Gold Key Service,’ where we can set up meetings for them or for other North Carolina companies with qualified buyers abroad,” Sizemore explains. “We have offices in over 80 countries and our people abroad can find key distributors and develop market intelligence. We can even provide interpreters and driving services. It’s one of the best things we do with an over 80 percent success rate.
“But the key to success internationally is travel. Mike Viniconis knows this. His passport is easily two inches thick with annexes stapled onto the back. When you get on a plane you’re proving to potential buyers that you’re serious about their market and you’re willing to commit. Getting on a plane and building that relationship with prospective buyers overseas is critical to international success.”
Since the Thomases retired from Argus in the late 1990s, Viniconis has continued to spearhead the company’s international push. One five-week business junket last fall had him in Pakistan, India, Thailand, Indonesia, Singapore and Japan. Since September 2012, he’s been overseas for a total of 15 weeks.
The push has paid off; Argus Fire Control now does business in more than 50 countries and exports of their product are 80 percent of their total sales. And while Argus exports to the more familiar regions of Europe and Southeast Asia, it seems no location is too exotic. Current work includes a project in a remote corner of Uzbekistan and they just concluded agreements for three textile mills being built in Angola.
“We do business in countries where there are no Starbucks or McDonalds,” Viniconis says. “It’s been interesting as well as a lot of fun.”
Argus credits their use of independent sales agents in each country as key to their success. “The art of this business is to find the right agent,” says Viniconis. “We’re doing extremely well now in Bangladesh, India, Pakistan, Mexico and Korea because we have good agents there and the markets are doing well. Having the right agent is critical to a small business exporting successfully.”
Viniconis affirms there is great demand overseas for American products. “Everywhere we’ve done business we find American products are held in high regard. Overseas markets like Americans’ honesty in business, they like the service we provide and the high quality and reliability of the products. American products last.
“Argus has systems out there that are 15 or 20 years old. We joke that it’s not good to be a spare parts salesman for Argus; you won’t make any money. These systems have to operate not only locally in the Carolinas but also in Uzbekistan—that’s a long way to go to replace a part. These systems need to work.
“We design our products to be as ‘plug and play’ and as robust as possible so they don’t require much service, just normal maintenance. We also train the end user, the mill, to do the service. If they prefer, they can contract maintenance to our agents but most of our customers do their own service.
“We’re not the low cost provider, but considering the life of the product, we offer great value and reliability.”
Viniconis maintains that internal R&D also factors heavily into design improvements and new products: “Our products have to perform under harsh industrial environments—dust, dirt, noise—and be able to withstand power fluctuations of 15 to 20 percent.
“Imagine the power grid in Bangladesh. Our systems need to be able to withstand power surges, brownouts and blackouts and to come back and operate as if nothing happened. That’s why we sometimes install triple levels of power protection.”
Shrink or Swim
For Argus Fire Control, the challenges of doing business globally are far outweighed by the benefits. One enormous benefit in particular stands out: survival.
Argus customer Parkdale Mills is a leading global provider of spun yarn. Parkdale President Dan Nation has worked with Argus Fire Control for 25 years and has a unique perspective on the company.
“The textile business was on the decline for awhile. There was a lot of consolidation and a lot of companies went out of business. This affected a huge part of Argus’ business, but rather than sit back and shrink with that market, they decided to make their market bigger, to expand overseas.
“I watched Mike build that business. It was amazing to see the places he would go—countries I would never go to. He’s a road warrior. Now they’re all over the world. When I became president of Parkdale, one of the first things I did was sit down and talk to Mike about how he took his company international, because he’s done as good a job at it as anybody I’ve seen,” attests Nation.
Viniconis states it simply, “If we had not expanded overseas, we would not exist. We couldn’t have survived on domestic business. Exports kept us alive and now the profitability of exports allows us to grow.”
And growth has led to a new Argus Fire Control facility. In May, the company moved to a 13,000-square-foot facility near I-85 and the Billy Graham Parkway. “I always like to be in either the landing or takeoff pattern of the airport,” Viniconis jokes.
In May, the company also received the prestigious President’s E Award for 2013 from the U.S. Department of Commerce and the White House. Winners of the E Award are recognized for their significant contribution to increasing U.S. exports.
“We’re very excited,” says Viniconis. “It’s an award that every exporter aspires to. We’ve had four steady years of export growth. Because of exports, Argus Fire Control never experienced the recession.”
Viniconis is also a proud member of the North Carolina District Export Council and says he has learned a lot from his involvement with the group and from their chairman, Wayne Cooper, whom Viniconis considers a mentor.
“The Export Council is very active,” Viniconis says. “They host seminars and road shows and work with local community colleges. It’s made up of a cross section of industries—manufacturing and service—and every size of company from small businesses like Argus to Caterpillar. We’re all excited about exports.
“We mentor other businesses and encourage them to export. The statistics are that only one percent of businesses in the U.S. export and of that one percent, most only export to one other country.
“Any company making an interesting product nowadays probably gets inquiries from international customers. I’d advise them to take those inquiries and contact the Export Assistance Center or the District Export Council or me and we’ll tell them what their next step should be.
“Field those inquiries because you never know when your domestic market might start to wither and you need an international market to keep your company going and strong.”
When Malcom McLean patented the intermodal shipping container in 1956, he revolutionized the transport of goods and cargo. No longer were the sale of goods limited to specific regions; thanks to the ease and uniformity of intermodal containers, goods could travel the world.
Well, shipping container architecture is once again taking center stage, or rather, becoming the stage for hospitality venues, tradeshows and other public events with Boxman Studios’ design, development, and deployment of them as immersive brand environments for events and trade shows around the world.
Containers Come Full Circle
Few inventions can boast as profound a social and economic impact on everyday life as the shipping container. It’s a large steel box built in standard sizes to support the transportation of goods by ship, truck, train, and sometimes even airplanes. Invented by native North Carolinian Malcom McLean (Maxton, N.C.)—known as the truck driver who reinvented shipping—the shipping container replaced wooden crates and loosely packed boxes that were clumsy, expensive and time time-consuming to load and unload.
Because of its uniform design—stackability, versatility, strength, resistance to theft, and ease of loading and unloading—the uncomplicated shipping container greatly reduced the costs of production and distribution, some say by up to 90 percent. Nearly every product imported into this country is transported via a ship in a metal shipping container.
Once the ship arrives in port, the containers are removed from the ship via a large crane and transferred onto railroad cars and tractor trailers for transport into the interior areas of the country.
Today, the majority of shipping containers are manufactured in China with over 21,000 landing on U.S. shores each day. In the United States we have an overabundance of used shipping containers because of the economics of international trade; we import more than we export. But once they’re here, they’re oftentimes orphaned. This is where Boxman Studios comes in.
“We see endless possibilities in the repurposing of these very sustainable boxes,” attests David Campbell, president, CEO and founder of Boxman Studios, LLC.
Campbell calls himself a “serial entrepreneur,” at one point in his childhood aspiring to be an architect. Today, he lives in Myers Park with his wife and three children.
Campbell grew up in Katonah, N.Y., and earned a journalism degree from Ohio Wesleyan University in 1995. He returned to New York City and joined up as a stock broker with Prudential Securities, becoming a trader on Wall Street.
An invitation to play golf in Charlotte a year later turned into a job offer with investment and brokerage firm Interstate Johnson Lane. After three years, he changed industries and accepted accepting a position with Harris Murr and Associates, a Charlotte-based real estate developer.
Three years later, his burning desire to become an entrepreneur led him to open his own real estate development company, Acer Development, specializing in commercial properties, specifically office and retail space. Today, Campbell still keeps a hand in this business.
Campbell describes himself as a visionary—a contemplative person. He deliberately takes time for reflection and goal-setting. He clears his calendar for one day every 90 days, going it solo oftentimes in the mountains to reassess and redefine his goals, dreams and expectations of life.
He credits this open mindset of continually seeking out challenges for this current chapter in his life. In 2008, after reading an article about new uses for decommissioned shipping containers, he was intrigued. So he bought one and started playing in the mobile hospitality space. By 2009, he had a staff of 11.
One of his first gigs was to set up a mobile hospitality venue at the Charlotte Motor Speedway. Using a shipping container, Campbell’s vision was to create a positive sensory experience for each visitor, a concept called “experiential marketing.” Unfortunately, right before the event, the client cancelled. Having already designed a ‘Pop-up Party’ for his client, Campbell decided to attend the racetrack event anyway and throw a party to see who would come.
“The unique design of the container as a hospitality venue attracted many visitors,” says Campbell. “I knew I was onto to something as I watched people slowly realize what the venue was made of and thought it was really cool. It validated our design principles.”
Boxman Studios modifies these decommissioned shipping containers on a five-acre, 65,000-square-foot property just north of Charlotte. Both corporate offices and manufacturing are housed here, along with space for trucks that transport these repurposed containers to client locations around the country. Boxman Studios also has a storage, manufacturing and distribution center in Los Angeles.
A Better Brand Experience
Campbell has structured Boxman Studios into three separate business proficiencies—design, development and deployment. The design process is highly collaborative, with the first question asked of the client, “What do you what want to achieve?”
“I have all the faith in the world that we can create unique and one-of-a-kind experiences for our clients and for their customers,” says Campbell.
“We have a custom solutions mentality,” describes Campbell. “When working with our customers, we want our solutions to be easier, cheaper and cooler than our competition.” Campbell says he has created a company culture around the “just say yes” approach to customers.
For all of Boxman Studios’ projects, the main goal in the architectural design of a mobile hospitality venue is to facilitate interaction. Whether throwing a party or creating a pop-up retail space, clients typically want an attractive, interesting and welcoming venue to entertain and impress clients.
And with using sustainable architecture such as shipping containers, Campbell points out that he is helping his clients align their brand with a responsible environmentally-friendly solution.
Boxman Studios’ mobile hospitality venues are oftentimes pop-up parties that are popular rental units for many reasons. It arrives as a box, the flaps go down and is adorned with a bar, couches, TV, stereos, WiFi, electrical (either power or solar), and customized branding—all built in and already attached. The only thing left to add are the people.
Campbell has positioned his company as a strong player in the experiential marketing space. Essentially, experiential marketing attempts to connect consumers with brands in personally memorable and relevant ways by creating a positive sensory experience to influence or motivate potential customers to become loyal brand users.
Experiential marketing uses tactics that ignite the senses and emotions, whether it is audio or visual (or a melding of both), a physical sampling of a product, an anticipation of winning something, or many other forms. In Boxman Studios’ case, they’re creating an architecturally unique sensory experience for the visitor to get their attention. Once they’ve gotten their attention, the next step is to share a brand’s message in a memorable way that will stick.
Jack Daniels is one of the better known brands taking advantage of experiential marketing rather than traditional approaches. The company prides itself as independence with a shot of rebel. They used that mentality to create a comfortable environment for visitors to sit with a brand ambassador, discuss whiskey versus bourbon, and sample some good old No. 7. Jack Daniels gave customers a memorable experience.
Red Bull is not only a high-energy drink, it is a high-energy company. They needed a customized venue that could travel with them anywhere. Boxman Studios created a convenience store-style interactive booth using a 20-foot container which features all the comforts and amenities of a convenience store, down to the snacks and ice-cold Red Bull. It is easy to set up and break down, and it can accommodate virtually any space.
Boxman Studios’ sales team targets global brands, architectural firms designing sustainable environments, and/or marketing firms who support global brands selling solutions in support of tradeshows, events or clients in need of a permanent or semi permanent building.
“These custom-built designs have many applications where we can create an environment that’s memorable, adds to our client’s brand equity, and highly complements what they are selling,” says Campbell.
Launching Customized Environments
In 2012, Mark McInnis from Javelin, an experiential marketing agency in St. Louis, Mo., reached out to Boxman Studios to help their client Samsung with the North American launch of their new Galaxy S III phone targeting the consumer market. Samsung wanted to take the technology to the people and let them interact with the phones in an intimate environment to experience all of its features directly.
Samsung’s 12-week, eight-city campaign took America by storm in customized environments that let people experience the smartphone on a personal level. Starting with a repurposed 20-foot container, Boxman Studios customized a ‘cabana’ design maximizing showroom space and giving Samsung representatives room to engage with prospective customers.
Fully customized and appropriately branded, Boxman Studios’ iconic solution attracted crowds in every market. The comprehensive campaign turned out to be so successful, that Samsung continued the tour in three additional markets.
Earlier this year, Javelin reached out to Boxman Studios on another Samsung project, this time targeting college students. This road tour was designed to introduce Samsung’s next generation phone, the Galaxy S 4. For four days, a Boxman Studios’ mobile hospitality venue was set up in a recreational area on six campuses for the students to try out the latest and greatest Samsung phones and win prizes.
McInnis says, “Boxman’s mobile hospitality venues give a sense of premium quality that feels permanent, versus another mobile technology that’s typically on wheels. These venues on campuses work very well for us,” says McInnis.
“After an all day event, you can lock them up at night, return the next morning, open them up, host the event and then drive them out to the next location. For these types of road tours, Boxman handles all the logistics including providing trucks, drivers, loading and unloading. It truly is a great resource to have in our toolkit to offer our clients,” adds McInnis.
Each year, the world’s leading thinkers and doers gather at the TED Conference for an event many describe as the “ultimate brain spa” or “a four-day journey in the future in the company of those creating it.”
Google wanted to have a big presence at this event and was given courtyard property outside the Long Beach Convention Center to create an iconic presence. The venue needed to be large enough to accommodate visitors from the TED Conference, and yet small enough to fit into a limited footprint. It also had to be versatile enough to include a range of activities to keep convention goers engaged and entertained. Boxman Studios was called in.
Two weeks before the TED Conference, Boxman Studios began setting up shop in Los Angeles with five, 40-foot shipping containers. Reaching 24 feet into the air, Boxman Studios designed and created three temporary buildings that were dubbed the ‘Google Garage.’ Each container was delicately lifted from the street into Google’s assigned space outside of the Long Beach Convention Center.
A 3,000-square-foot structure was then filled with all things Google, including interactive YouTube screens, viewing areas for the TED talks, an Android charging station, a basketball hoop, a claw machine, a coffee bar, and various other cool activities to take a break from the conference. The result—Boxman Studios created an innovative, yet iconic space for attendees.
As a young boy, Campbell’s dream of becoming an architect didn’t necessarily involve big metal boxes used for sleek hospitality venues. But looking out to the future, Campbell has big dreams for these sustainable customized shipping containers. He sees endless possibilities including pop-up buildings for emergency services and greater uses in the education, medical and growing of food industries.
For over 30 years the National Science Foundation (NSF) has played matchmaker with the nation’s businesses and universities. These clever scientists have taken a dollop of federal dollars, added a few rules and regulations, and created dozens of abiding relationships. The courtships are all centered on common research interests and many have lasted for years.
Passions are kept alive because each has something the other needs. For the university, it is the money and sense of urgency that businesses bring. Companies pay a membership fee for entrée to the universities laboratories. Businesses also link important social and economic value to what might otherwise be isolated academic work. For business, it is the university’s expertise, students, equipment and ideas and the commercial possibilities of that intriguing mix.
Each NSF pairing is not restricted to one university and one business, but many, with multiple universities and multiple businesses all working together. NSF’s Industry/University Cooperative Research Centers (IUCRCs) have a significant track record of contributing to the commercialization of valuable research and, in fact, have served as a premier example of “leveraged” funding—a model for other government programs in how to develop cost-effective synergy with the nation’s research and development process.
The Charlotte region can be particularly proud of UNC Charlotte’s participation in the IUCRC program, which has brought together significant industry-university partnerships helping to nurture the seeds of innovation targeting areas for future growth.
Planting a Seed
An IUCRC typically begins with a small collaborative one-year planning grant to a group of university faculty members able to demonstrate the scientific, organizational and entrepreneurial skills necessary to form a team and run a successful Center. From there, it is up to the Center to obtain commitments for funding from the affiliated universities and industry partners.
If successful on a merit review, NSF may make an initial five-year award; NSF funding may be extended for two subsequent five-year periods. After that, a center “graduates” and must reinvent itself and reapply for a final five years.
Currently there are approximately 61 IUCRCs at 178 university sites across the nation. Corporate members now number over 500 with many holding memberships in two or more IUCRCs. Counting duplications, there are over 1,000 corporate memberships in FY 2012.
Of UNC Charlotte’s six IUCRCs, two are in the planning stages, three are active and one has graduated and reapplied for a longer and revamped life span.
Vice Chancellor for Research and Economic Development Dr. Robert Wilhelm, also executive director of the Charlotte Research Institute, oversees the six IUCRCs at UNC Charlotte established in the following areas: Freeform Optics; Safety, Security, and Rescue; Metamaterials; Sustainably Integrated Buildings and Sites; Configuration Analytics and Automation; and Precision Metrology.
“Some IUCRCs have as many as 50 corporate affiliates,” asserts Wilhelm. “We don’t have one that big yet, but it is our hope. Centers will not get support from NSF unless they have at least six member companies with each contributing $30,000 to $50,000 a year. For that investment, a corporation plays an active role in defining the Center’s research agenda. It also has access to research results and the university’s vast wealth of human capital.”
Member companies regard the IUCRCs research agenda as “pre-competitive,” says Wilhelm. “It is early R&D.” Discoveries typically apply to a broad range of potential products rather than to one in particular. Nevertheless, IUCRCs consistently produce research that results in the creation of intellectual property. In one recent year, there were 29 invention disclosures, 30 patent applications, 12 patents, six license agreements and one copyright.
Six Seeds: Freeform Optics
UNC Charlotte, the University of Rochester and Penn State University have teamed up to propose a Center for Freeform Optics for NSF support. Dr. Angela Davies, an assistant professor in optical metrology, would co-lead the IUCRC at UNC Charlotte.
They cannot release the names of companies committed to joining it, as they won’t find out the NSF decision until July.
“Freeform optics is the ability to manufacture optical surfaces in arbitrary shapes,” explains Davies. Arbitrary usually means shapes other than spherical. Google Glass, a wearable-computer with head-mounted display is a recent and highly publicized example.
Collaboration with the University of Rochester and Dr. Jannick Rolland would bring “strong expertise” to the new center, says Davies. That’s because Rolland has perfected a head-worn display for augmented reality that looks like something out of the sci-fi thriller Minority Report.
She takes information from the environment and integrates it with data from the Internet, GPS, an infrared camera, light-emitting diodes (LED) and mobile phone applications. It is then selectively displayed on lenses in a set of goggles. This is reality augmented by modern technology.
Head-worn displays would revolutionize our driving experience. Highway travelers would see the next turn overlaid on their goggles, eyeglasses or windshield. Ratings for restaurants would pop up as you approach. In a blinding snowstorm or dense fog, images of vehicles ahead would be seen clearly in enough time to avoid an accident.
Business tried to commercialize augmented reality glasses in the late 1990s and failed. Recent developments in miniaturization, illumination and freeform optics have brought ultra-cool augmented reality glasses closer to reality. But the microdisplay industry lags behind the technology, a problem the new Center intends to remedy.
Six Seeds: Safety, Security and Rescue
Another of UNC Charlotte’s new partnerships is the Safety, Security and Rescue Research Center. Dr. Jing Xiao is its director. Although it may sound like a burglar alarm laboratory, Xiao’s research combines two modern technologies—robotics and sensing.
“The two are inseparable,” says Xiao. With colleagues from the Universities of Minnesota and Denver, Xiao studies how these two technologies can enhance the safety and security of human workers. Her University of Pennsylvania colleagues have adopted the rescue emphasis. They are experts in developing small, agile flying robots that swarm, sense each other’s presence, survey disasters and coordinate rescue operations.
Xiao champions the use of robotics and sensing in healthcare. Doctors already use robotics for minimally invasive surgery, a branch of medicine more precise than cutting with a hand-held scalpel. The robotic scalpel needs to provide important feedback to the human operator so that the physician does not cut too deeply or push too hard. That’s Xiao’s specialty, the science of haptics. She has successfully incorporated the sense of touch into robotic scalpels, making them more human.
“A lot of elderly people want to stay at home,” says Xiao, “and robotics can help them.” These robots don’t look anything like a human nurse, but they can fetch water and food and remind patients to take their medicine. There are also smart hospital beds that integrate the various devices monitoring a patient’s condition.
Some beds sense when a sleep apnea patient stops breathing. The bed then turns the patient so that breathing can resume. Mobile patients now have smart wheelchairs equipped with a laser range scanner, tablet computer, infrared camera and speech recognition software. The wheelchair can learn the layout of the home from the patient’s voice and then travel to where it is told.
So far, three Charlotte businesses have partnered with this center: Robotics Operations CoroWare Charlotte, Electric Power Research Institute (EPRI) and Carolinas Medical Center. “We are still recruiting members,” says Xiao.
Six Seeds: Configuration Analytics and Automation
Five banks including Bank of America and Wells Fargo, were recent victims of large scale cyber attacks. Foreign governments are prime suspects. What’s next? Wrong question, says Dr. Bei-Tseng Chu, chair of UNC Charlotte’s Department of Software and Information Systems.
“It is better to ask what industry is not open to attack. The answer is only those we don’t care about. If it’s important and of value, it is in danger from ‘hacktivists’ and thieves,” says Chu.
Protecting the nation’s information technology infrastructure is the goal of the newly approved Center for Configuration Analytics and Automation. Chu is a researcher at the center; Dr. Ehab Al-Shaer, its director. Its first day in business was May 1. George Mason University and the University of California-Davis are center members; allied companies will be announced later.
Complex computer systems are built or configured with thousands of components—everything from routers and servers to firewalls, switches, DMZ subnetworks and proxies. “The more complexity, the more opportunity for error,” says Chu. Configuration analytics enable computers to do the work of correcting problems ahead of time.
Moving information to the cloud presents a promise and peril for small businesses. Before the cloud, they couldn’t afford high-level system security. With the cloud, they have more resources, but they become a bigger target. In the movie, Jaws, the crew needed a bigger boat to take down a Great White. In the cloud, it is a bigger weapon like Cloud Checker, a pet software project of Dr. Al-Shaer and a big gun for his new center.
Six Seeds: Sustainably Integrated Buildings and Sites
Urban Eden, UNC Charlotte’s entry into the 2013 Solar Decathlon competition, combines state-of-the-art photovoltaic panels and geopolymer cement concrete embedded with water-filled capillary tubes. With the help of the sun, it’s designed to fully power a home for 10 days. That feat may win the 49ers points at the Solar Decathlon Village in Irvine, California, in October.
It may also help advance the work of the NSF Sustainably Integrated Buildings and Sites Center (SIBS). Associate Professor Dr. Robert Cox, who was an advisor on Urban Eden, is its director.
The center is new. Its first day under NSF was tax day, April 15. Academic partners include Carnegie Mellon University and the City University of New York. At this early date, the participating companies are Wells Fargo, Bank of America, Ingersoll Rand, Johnson Controls, Vornado Realty Trust and the New York City Department of Citywide Administrative Services.
SIBS will concentrate on four basic resources—air, energy, water and materials—and then spiral the investigation up a notch to see how each contributes to a building’s interior, the building itself and the environment in which the building is placed.
“To date, most of our emphasis has been on energy,” says Cox. “We currently have a heavy emphasis on the use of data mining and sensing for improved energy efficiency in buildings.”
Buildings are unlike other engineered environments, says Cox. They are often designed with aesthetics first and energy efficiency further down the line.
“Even when architects design an energy-efficient building, when you put people in it, all of a sudden, it isn’t,” says Cox. “Occupants use more light than anticipated, they add space heaters.” The first rule of the new SIBS center is occupant comfort. A comfortable occupant is more productive and more efficient.
Six Seeds: Metamaterials
It is a little more complicated to explain the magic taking place in Dr. Mike Fiddy’s two-year-old Metamaterial Center.
Metamaterials are not found in nature. They are artificial structures engineered to have refractive indices below +1, even into the negative numbers. What makes them so intriguing is that they not only reverse a few laws of physics, but also move Harry Potter’s cloak of invisibility closer to reality.
Much of the work that goes on between Fiddy’s lab in Charlotte and those at City University of New York, Clarkson University and Western Carolina University is theoretical. Today’s metamaterials are microscopic and years away from production.
Fiddy talks as often about meta-atoms, nanostructures and models as he does about metamaterials or invisibility. “When it comes to making practical metamaterials,” says Fiddy, “we need a world that is a lot more sophisticated than today.”
At this early stage of development in a field barely 10 years old, research is driven by the Center’s corporate sponsors, says Fiddy. Those on board include Raytheon, Corning, Xerox, Goodrich, the Army Research Labs and the Air Force Research Lab at Wright-Patterson Air Force Base.
The military certainly has an interest in Harry Potter’s cloak. Imagine a battleship that is invisible to both radar and sonar, one that can’t be seen or heard.
“Today we can’t make something invisible, but we can make it hard to see at some frequencies,” says Fiddy. “The theory is there, but we are really still taking baby steps. We are only 10 to 15 percent of the way there.”
Six Seeds: Precision Metrology
“We are big dogs in precision metrology,” says Wilhelm also Charlotte Research Institute’s executive director. Based on the number of industrial partners the Center for Precision Metrology has recruited (14), its faculty (20), laboratory inventory (41), past and current projects (49) and longevity (19 years), he is not exaggerating.
Unlike all of the university’s other NSF IUCRCs, this is the only one based solely at UNC Charlotte. That’s because there are no other universities in its league. That too is no exaggeration.
The metrology center invented the world’s first subatomic measuring machine, the first laser tracker and set at least four national standards adopted by the American Society of Mechanical Engineers. It also spun off numerous production companies, including Charlotte-based, InSituTec.
The center graduated from NSF in 2008 and this year Center Director Dr. Bob Hocken has reapplied for continuing status as an IUCRC. “I’d be rather surprised if we were not approved,” he says. Precision Metrology Center was first approved in 1998.
Included among its industrial affiliates are Caterpillar, Corning Cable Systems, Pratt & Whitney, GE Energy and General Dynamics. Hocken hopes that one of the Center’s early affiliates, Boeing, may soon be returning. Affiliates, some with offices in Charlotte or in nearby communities, provide the center with $400,000 in annual financial support.
Clearly, the Precision Metrology Center is a success story writ large.
Significant Leverage: Buy-in and Return on Investment
The IUCRC Program is a model of “leverage”—in terms of “leverage in,” obtaining the buy-in of partner companies, and in terms of “leverage out,” the return to the community on the Program’s activities.
NSF’s financial contribution to the Centers is relatively small—about $15 million in FY 2011. Funding from sources other than NSF is much larger, totaling more than $68 million in FY 2011. Over the past three years, for every dollar the IUCRC Program invests, the average center secures $2.9 to $3.8 dollars in industry funding and between $7.3 to $10.9 of total funding.
It is difficult to measure the impact of IUCRCs since they perform pre-competitive, shared research, nonetheless, the data consistently documents the leveraging effect of IUCRC financial support, the establishment of valuable partnerships, immediately realized R&D impacts and descriptions of technology breakthroughs. In one assessment strategy, it was determined that each dollar invested by NSF helped to create $69.4 in benefits, with a total net present value of $1.27 billion.
“The IUCRC Program allows for critical collaboration delivering advancements in research that can be commercialized and monetized in the global marketplace more expeditiously,” attests Vice Chancellor Wilhelm. There is no doubt that the IUCRCs at UNC Charlotte truly leverage this region’s university resources and personnel, and business relationships, generating wealth and job creating opportunities.
Each time Mel Graham passes through the gates at The Club at Longview, he is struck by the natural beauty of the land—the rolling topography of old trees, natural streams and Six-Mile Creek, along with natural land preserves.
“God gave us a wonderful canvas to work with,” says Graham, the founding partner and visionary of The Club at Longview. And what a masterpiece he and his partners have created.
The Club at Longview is situated in a 500-acre private gated residential community south of Charlotte with the region’s only Jack Nicklaus Signature Golf Course. The Club is consistently ranked one of the top 20 private clubs in North Carolina by Golf Digest ‘Best in State.’
Graham began design and construction of the Club in 2000 and completed it in 2003. He owns it in partnership with James Little, formerly an investment banker, and Bruce Anderson and Pat Welsh of Welsh, Carson, Anderson & Stowe.
Together, the partners have built a community that promotes an atmosphere of relaxation and exclusivity with uncompromised conveniences and amenities for members to enjoy, with respect for the highest quality design concepts and land preservation.
There are 310 manor-style luxury estates. Approximately half of the home sites are built out with homes valued from $1 to over $10 million. There are 40 home sites remaining for sale. The integrity and high standards of the community are maintained by the Club’s Architectural Review Committee.
A Signature Imprint
The “signature” attraction to The Club at Longview is its 220-acre, 18-hole Jack Nicklaus Signature Golf Course.
“As Jack Nicklaus stood on this property, and looked at the gently rolling hills with its pines and hardwoods, its creeks, ponds and nature preserves, he said, ‘It’s as if it was always meant to be the home of a great golf course,’” Graham remembers. “Jack shared and appreciated the inherent beauty of the land, and had a plan to maximize and preserve it.
“I told him we wanted the architecture and old-world themed amenities emulating traditional English and Scottish manors—something that looked like it had been here forever,” continues Graham.
It was a natural for Nicklaus, who said it reminded him of Muirfield, which he had designed in his hometown of Dublin, Ohio, the site of the famous PGA Memorial Tournament, echoings old stone walls and Irish-themed landscaping.
Graham worked closely with Nicklaus as he personally designed the course, and supervised the building of it every step of the way. “The process is incredibly involved; everyone sees the surface result, but what is necessary to make a golf course functional is literally buried,” explains Graham.
“There are hundreds of thousands of tons of dirt that must be moved to grade and balance the site, plus there are over 30 miles of irrigation lines, 280-plus miles of wiring and over 15 miles of drainage lines that must be laid at the site. Add to that an average of 100 million gallons of irrigation water annually, and there is a lot going on beneath your feet.
“Each green also has its own separate remote-controlled mister system to cool it during hot weather conditions. There are over 1,500 sprinkler heads that are individually controlled and a sub-air system that functions as a giant shop-vac, to pull moisture out of the green.
“Jack is very specific about what it takes for proper play conditions and proper course health, and what goes on beneath the surface is a huge component of that,” Graham comments, appreciative of Nicklaus’ strict course specifications.
“Working with the natural topography of a great piece of land, he designed a world-class golf course,” Graham says, nodding. “Jack Nicklaus is a great in the golf world and a great friend. We could not have worked with anyone better.”
Graham credits director of golf course operations and longtime friend, Ray Avery, for overseeing the details of construction and the ultimate quality of the course today. “The golf course would not be what it is today without Ray and his great team of maintenance professionals,” says Graham.
The charming gatehouse and the magnificent clubhouse of The Club at Longview have an air of distinction, and along with the manor-style homes on the grounds look native to England or Scotland, favorite travel spots for Graham and his wife Terri.
“This is the common theme and goal for the entire project—the golf course, clubhouse, streets and homes. We want it to have an old-world look and a feel of home and permanency,” says Graham. “It’s unique architecture that you won’t find anywhere else in the Carolinas.”
While the architecture may be purposefully dated, the amenities are anything but. The clubhouse facilities, totaling 38,000 square feet and open 24/7, include a 10,000-square-foot activity center housing a full-service fitness center, adult and family pools, aerobic studio, spa and steam room, and an expansive youth lodge. Buildings also include a gate house and carriage house.
There are multiple dining facilities on the property to accommodate both casual and formal dining, as well as banquets and meetings. Four hydro-clay tennis courts await the inclination of members. There is a tennis pro and a golf pro on staff to provide instruction. Personal concierge services are available.
“When you first drive through the gates, you don’t realize the complexity of the operation. It takes a small army to manage this property and all the amenities,” says Graham, adding “We have a great staff that is second to none. We train our people to treat members and guests with down home southern hospitality.”
Waxhaw resident Rick Poling is the Club’s general manager; he most recently hails from the Miramont in Bryan, Texas. Chip Swanson is the director of golf, a PGA member since 1993 most recently hailing from The Club at Spanish Peaks in Big Sky, Montana, although he has over 20 years’ experience at several high end clubs throughout the country.
The tennis pro is world-renowned ATP tennis tour coach Louis Vosloo from South Africa. Vosloo has played with the likes of Pete Sampras, James Blake, Robin Soderling, the Bryan Brothers and Andy Roddick. As a tennis pro and coach, he has worked with the Brickell Tennis Club in Miami as well as The Dunes Golf and Tennis Club and The Sundial Beach and Golf Resort on Sanibel Island.
Both Avery and Golf Course Superintendant Barry Rewis maintain and manicure the course to provide one of the best conditioned courses in theCarolinas.
The Longview Tradition
The history of Longview dates back to the 1800s when it was first known as The Longview Black Jack Farm. In the early 1950s, a portion of the grounds were purchased by Graham’s father, owner of Graham Brothers’ Dairy Farm and brother of Reverend Billy Graham, to put his dry cattle out to pasture.
“As a kid, I walked the property all the time, appreciating this God-given, beautiful landscape,” says Graham. “I always knew we could make Longview something very special.”
Graham alongside his father farmed the land into his twenties at which time he embarked on what became a successful career in the construction and real estate business.
“As I started making money, I began to purchase adjoining parcels to the farm,” recounts Graham, “and, over the next 20 years, was able to accumulate over a thousand acres. In the late 1990s, Charlotte was exploding to the south. So when the Rea Road extension and Highway 485 were announced, I decided to develop what is now Longview,” recalls Graham.
At the highest points of the property, the Charlotte skyline is visible. “This property was perfect due to its proximity to the rapidly growing south side of Charlotte. It’s 30 minutes from uptown Charlotte, a reasonable commute, plus, its location in Union County means lower taxes and great schools,” he points out.
Graham’s vision came about after extensive travels through England and Scotland. “I fell in love with old world architecture and wanted to create one of the finest residential communities anywhere in the Carolinas. I wanted classic architecture that would withstand the test of time.”
He was also influenced by the longevity and stability of Charlotte’s Eastover and Myers Park neighborhoods. The streets of Longview are lined with plantings of majestic oak trees now 10 years old. “They will only improve with age,” observes Graham.
“I enjoy golf. I’m not a pro but enjoy playing on a challenging, fair and physically attractive golf course,” says Little, who adds that he’s always wanted to own a golf course. “The opportunity to become a partner came at just the right time.”
“There is a tendency for people to assume that anyone who invests in this [Longview] is in it for the money, but it’s a long term prospect,” says Little. “It’s really about seeking a high quality of lifestyle.”
“It’s a close-knit community and a great place for families. The schools are ranked very highly. When it was conceived, everybody thought that only older people would live here, but that’s not the case now,” Little says.
Life at Its Best
Although The Club at Longview has certainly felt the slowing effects of the recent economic downturn, Graham says they have continued to grow at a rate of about 12 new members per year. Currently, there are 22 homes—all sold—under construction.
Graham attributes Longview’s success to the business knowledge and economic strength of the ownership partners. “We had the pockets to support it,” says Graham. “Not only did we weather the storm, but we paid off all the debt.”
The partners also recently invested an additional one million dollars to complete and repair infrastructure across the property. “We put our money where our mouths are and stuck with our original convictions,” says Graham. “I have three great partners and I am thankful for them.”
Graham describes the membership as “a broad mix, bringing together older families from Charlotte and Union County and newcomers from across the country. We have self-made entrepreneurs all the way to executives and CEOs. It’s a wide demographic and racially diverse.”
“Most residents within the community tell me they feel very fortunate and blessed to live in such a pristine, serene neighborhood,” says Graham, “ and we are very appreciative of the support we have from them.”
Membership to The Club at Longview is contingent upon application approval by the membership committee. “We’re looking for like-minded individuals and professionals that can contribute to the social community that we’re building here. That will require the financial wherewithal to be a member of the club,” explains Little.
“People come for different reasons,” says Graham. “Some are here because it’s a great place to raise a family; for others it provides a second or third retirement home. Still, others are attracted to all the activities, and, of course, excellent golf with no tee times.”
The Club at Longview has four types of memberships: golf memberships, social memberships, corporate memberships and national memberships. Golf memberships are capped at 395, but are still available. Social memberships have no cap; management expects to add 30 new members this year.
The Club at Longview also contributes to the greater region. “We want to be good corporate citizens and an asset to the surrounding area,” says Graham. “Personally, I believe that God has blessed me and I want to reach out to the community and give back.”
The Club sponsors multiple fundraisers each year to benefit a wide variety of charities. Last year, it hosted the Chiquita Golf Tournament. Approximately $1 million in proceeds went to benefit local charities.
Mel Graham currently has a home in Blowing Rock and also lives in the old governor’s mansion in Charlotte, known as Morrocroft.
“I kept about 50 acres in the heart of Longview which was the small farm that my daddy first bought,” confided Graham. “I intend to build out there. I can have all the stress the world has to offer, but when I pull through the gates of Longview, it all disappears leaving peace and serenity.
“For me, Longview is far more than another real estate venture—it is home.”
In 1976, at the age of 22, Mike Thompson started in the insurance business. As a suggestion for success, more seasoned colleagues advised him to get involved in civic activities, so Thompson chose to attend a civic club meeting in East Charlotte.
Charlotte’s mayor was the club’s guest speaker and Thompson recalls the mayor’s first remarks as especially meaningful.
“When he got up and said, ‘My name is Ken Harris and I’m with New England Mutual Life Insurance Company,’ I immediately felt like my career choice had been validated. The mayor of Charlotte was an insurance agent and proud to be one,” Thompson recounts.
Today, Thompson himself is the managing partner of the former mayor’s agency, which was known as Harris Murphy and Associates before 1994.
It’s been Thompson Financial Group, Inc. (TFG) since then, but the roots of the company date back to 1905. “There have only been six others in my position, so it has been a privilege and an honor to have this firm,” says Thompson.
TFG is the North Carolina agency for New England Financial, a MetLife company. New England Financial formed when MetLife merged with the oldest mutual company in the U.S., New England Mutual Life Insurance Company, in 1998.
With close to $600 million in assets under management and over 50,000 policy holders, TFG offers a wide range of financial services from estate planning, investments, insurance and total wealth management to corporate solutions such as risk management and employee benefits.
“My predecessor handled the pension plan for the North Carolina Bar Association, so many of our clients in the 1940s and ’50s were attorneys,” explains Thompson. “We still provide financial services to many attorneys.
“We’ve also had a very large business in the construction industry. We started the Carolina Construction Alliance as a service to our customers in the construction industry. At one point, we handled the insurance and investments and were the primary financial advisor for 300 to 500 construction firms.
“More recently, we’ve been working with independent pharmacies across North Carolina and Virginia.”
TFG started out based in North Carolina with principal offices in Charlotte, Raleigh and Greensboro. In 2007, TFG merged with the Virginia agency for New England Financial, Financial Services of Virginia, and gained offices in Richmond and Charlottesville.
Last year TFG merged with the South Carolina agency known as Carolina Capital Management, whose main offices are in Charleston and Greenville.
“So now we encompass three states and we’re more of a regional firm,” Thompson comments. “We also have international clients and are licensed in 42 states.”
All of the agencies have kept their original names to retain local market recognition and, along with TFG, are covered under the corporate entity name NEF of the Carolinas, LLC.
TFG currently has about 55 career advisors and several hundred associated brokers. TFG career advisors start as employees, but as they grow they become independent contractors, eventually owning their own businesses. As the firm’s managing partner, Thompson’s goal is to assist each advisor toward that opportunity.
“Each of the 55 advisors runs their business according to their own business plan and their target clients vary according to how they wish to specialize themselves in the marketplace,” Thompson explains. “Some advisors specialize in working with individuals, some only with corporations. But whatever client market they choose, our products and services can support their clients’ needs.”
MetLife is TFG’s primary carrier but Thompson notes, “Our career advisors have access to many carriers, and choose where to place a client’s business based on what is best for each client.”
“The days of the product sales people have pretty much gone away. Agents are called advisors because they act in that capacity. Somewhere around 50 percent of our business today is in wealth management, with the remaining portion in risk management or insurance. When I started, only five percent of the business was wealth management. Today’s industry professionals need to be well-versed in the entire arena of financial services.”
Expertise, Products and Tools
Each advisor has specialized tools to best assist their clients. TFG uses a holistic approach to financial planning called “consultative selling.” The seven-step program begins with an assessment of a client’s current position and of their goals and objectives, identifying gaps and creating a vision, and then moves to development and implementation of a customized plan to achieve those goals. Periodic status meetings monitor and refine the plan.
Many advisors also take advantage of the firm’s specialized technology tool called Personal Financial View (PFV). According to Thompson, “PFV is a web-based program that aggregates all of a client’s critical documents and key information in one location. A client can easily access and view their financial picture and collaborate with us in real time. The PFV tool separates us from our competition.”
TFG identifies several common stages with specific financial planning needs: early stages include a new couple or a startup business, both needing to establish a relationship with a financial services person; intermediate stages may involve a couple buying a home or starting a family or a growing business needing advice on liability insurance, adding employee benefits or group health insurance; later stages could involve establishing kids’ college education funds or estate planning for the individual and additions of a 401(k) plan or programs for key employee retention or a business succession plan for a mature business.
Through their in-house specialists or affiliated companies, TFG has the personal solutions for all the stages of the financial life cycle. But Thompson notes that TFG also stands out for its expertise in an emerging market.
“Many companies can help you make money, but what happens when you want to start taking the money out?” asks Thompson. “Who will help you integrate your 401(k) with your pension? When is the best time to start receiving social security? As a business owner, how will I be able to retire? What are the tax implications when you withdraw or move money from an account?
“Baby Boomers are running into these questions now. They’re afraid they might outlive their money. Our expertise really works well with distribution planning. My goal, and our goal as a firm, is to make sure clients have a comfortable retirement. This kind of planning is a specialty for our firm. There’s no substitute for planning.
Thompson has been assisting some of his clients for over 30 years. Dr. Jerry Punch became a client 36 years ago when he was just a second-year medical student at Wake Forest’s Bowman Gray School of Medicine.
“The first time I met Mike Thompson, my wife and I were living in a three-room apartment that had no heat. Mike came over to speak to us about planning for our future,” recalls Punch. “When you’re a medical student a lot of insurance and investment people reach out to you because of your potential for a significant income in the future. I had turned down numerous other people, but Mike was different. After speaking with him, I realized this was an individual who really cared and would look after my family long-term.”
Punch, who in addition to having been CEO of his own emergency medicine company and a hospital chief of staff, is also well known for his work as a commentator for NASCAR and college football and basketball games on ESPN and ABC and as a motivational speaker and a consultant in sports medicine.
“I travel a lot in my career and I’m constantly bombarded with people who say they’re an expert in estate planning or that they have this high profile athlete or NASCAR driver as a client,” Punch says. “But in my opinion, none of them have anything more to offer or are anymore knowledgeable than Mike Thompson.
“I use almost every service TFG offers and I’ve never had a single regret. I trust him with my future and with my finances. I have a tremendous comfort level knowing that Mike is taking care of me and my family as if he were a part of my family.”
Thompson acknowledges that the most satisfying part of his work is seeing the tangible effects of what he does in his clients’ lives:
“It’s always rewarding when my work helps a client achieve a goal.” He recalls one instance when he met with partners in a lumber company in theNorth Carolina mountains to discuss a buy-sell agreement so that in the event of a partner’s death the remaining partner could buy the deceased partner’s share of the business. It would protect the business but one partner was very resistant.
“It took a lot of planning, explaining and working with the partners to finally get the agreement in place, but it was important that we did it because within two years of the policies going into effect, one of the partners passed away. Because of the policies though, the remaining partner was able to retain the business, and the deceased partner’s wife and family received a fair market price for their share of the business.. They were so thankful that we had worked to get that protection into place. That had a huge effect on me.”
Thompson’s concern for his clients is one of the reasons he’s initiated a succession plan for his own firm. “My plan is to retire from management of the company in the next few years, but I want to ensure my clients are still receiving the service they deserve. So I’ve entered into a succession plan with my partner Ed Cook, who will be the management successor. But I’m not getting out of the business; I’m just changing roles.”
Last year MetLife initiated a “team selling” system where experienced advisors pair up with individuals new to the business. The new people assist the advisors, freeing them up to focus on clientacquisition and sales. There are dedicated roles within the team for the advisors who focus on sales and the practice managers who manage service to clients.
“I’m forming a team myself so I can lead by example,” says Thompson.
Thompson’s team practice manager is April Lee. Lee, who has worked as Thompson’s right-hand person since 2007, finds many advantages in the team selling approach. “This service model enhances the client experience,” she says. “Clients like having one point of contact and the responsiveness that brings. They also like that the advisors have more time for interaction with them.”
Thompson predicts that service enhancements will also result from MetLife’s choice of Charlotte as the hub for their U.S. retail business. The move will consolidate MetLife’s product management, marketing, sales and customer support people in the city by the end of 2015.
“I am very proud that MetLife chose to relocate to my hometown,” says Thompson. “This is a good thing for the city of Charlotte, for our firm and for our clients.
“And that’s the most important thing—that we can continue to provide a great client experience. We want to ensure that our clients’ financial needs and concerns are addressed with the highest level of attention, insight and capability.”