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Those who recall the movie, The Graduate, know the buzzword for business in the 1960s was ?plastics.? Now, as we enter the beginning of the 21st century, the buzzword is ?e-commerce.? Research groups are predicting the amount of business done online could reach trillions of dollars by 2004. One Charlotte firm is betting millions of dollars in venture capital ? and its future ? that it can become one of the major players heard in the buzz.
?There?s such momentum for Internet-everything, and businesses believe they?ve got to get on the Web or they?ll miss the boat,? observes Jess Marzak, a venture partner with California-based Bank of America Venture Partners. ?E-commerce is going to have a tremendous impact on the way companies do business.
?But,? Marzak adds, ?it?s one thing to build a site where people can learn about you and quite another to create a site where you conduct commerce.?
That?s where Charlotte-based Osprey
With their motto ?Migrating business processes and profitability to the Internet,? Osprey?s literature describes itself as a company that ?delivers customer-centered e-business solutions to enterprises seeking a strategic consulting partner with a proven approach to the Internet.? Clients who have used Osprey?s Internet-enabling technologies and expertise include Hendrick Motorsports Raceshop, Monsanto, IBO City, Kobalt Tools, Moonbuzz and ECompanystore.
Osprey helps its clients develop a strategy for the Internet and then, its recruiting video explains, ?turns your vision into reality online.? For example, Osprey assisted E4close, a dot.com company, in developing a Web site focused on listing and sales of foreclosed residential real estate and now continues to help guide their growth with ongoing project management, front-end design, consulting and custom development.
Another client is Source Technologies, a leading supplier of MICR check printing solutions technology. Osprey helped it develop a Web presence to sell printer products and consumables to both businesses and consumers. Following the development of Source Technologies? initial Internet strategy, Osprey guided it through the strategy for product presentation, payment, taxes and backend integration to support both business-to-business (B2B) and business-to-consumer (B2C) operations.
As these companies realized, it takes much more than a fancy Web site where people click and point to buy products to create a successful Internet presence.
?E-commerce impacts your order entry system, customer relations, fulfillment processes, distribution, shipping, sales and marketing, pricing, billing, taxes, manufacturing, employee training, your organizational infrastructure ? a whole array of logistical issues. You?re going to get a clear look at all your business processes, good and bad,? explains Osprey president and CEO Dave Rizzo, 43, who founded the firm in 1993. ?We can help you navigate through all that and help you find answers, plus we?re there to help you maintain it afterwards. At Osprey, we deliver rapid, effective, strategic solutions to automate transactions, e-business processes and customer relationships.?
Comments Marzak, ?To do e-commerce well, it needs to be integrated with your existing ERP [enterprise resource planning] systems (the guts of the software that runs a business). Many companies don?t do it well. That?s where the business is, and that?s where Osprey has turned its efforts.?
But it didn?t start out that way. When Rizzo left IBM in 1992 after 13 years with Big Blue to begin Osprey Systems, he focused on installing, training, supporting and consulting for ERP software products from Waldorf, Germany-based SAP AG. But that market turned sluggish as the 1990s progressed, and in 1998, Osprey began an e-commerce division headed up by Tom Wilson.
?I wish I could say we had a grand strategic plan to transform the company, but actually we got into e-commerce as an interesting experiment,? Rizzo chuckles. ?We saw a market trend, invested in it, and it grew. No one knew how profoundly that decision would change the company.?
But they had an inkling. By mid-1998, Osprey had reached a turning point, and Rizzo was already being courted by people who wanted to buy the company. ?We recognized that to have a national presence, create name recognition and offer value-added services, we needed a strategic financial partner,? he says.
When Bank of America Ventures and Morgan Stanley came through with the first round of $16 million in spring 1999 (another $5 million came through in February), Rizzo said they knew they had arrived. ?It was like the Good House-keeping Seal of Approval,? he says. ?There was no guarantee we would make it, but it certainly increased the odds.?
?We invest in good people who offer good services and products to growing markets,? Marzak says. ?Rizzo and his team were experienced and had a good track record. Moving into e-commerce systems integration was a dramatic change, but it was exactly the right thing to do.?
Last year, Osprey?s e-business revenues increased by 437 percent. When 2000 began, the firm had 215 employees, and by mid-year, the number has jumped to 235. It?s expected to reach 275 by year?s end. Its 40,000-square-foot building on Nations Ford Road, where they moved in 1995, is too small. ?We?ve got options on the land around us, so there?s room to expand, ?Rizzo says. ?But we never thought we?d outgrow this building this fast.? To handle the need for more employees, Osprey has begun a strong recruitment campaign, including a video that features management team members parachuting tandem out of an airplane and Rizzo, attired in a leather jacket and helmet, revving a motorcycle in his office. Bi-monthly employee orientation sessions have been beefed up and last several days.
The bulk of the venture capital has been used for an aggressive marketing campaign, which Rizzo says will cost about $4.5 million this year. The company hired Boston-based TFA Leo Burnett to develop its marketing strategy, which included dropping ?Systems? from its name and the introduction of a new logo in January. The osprey is now in forward motion, instead of gliding. (Rizzo says it makes the logo look less like something from the Audubon Society.)
The purpose of the marketing campaign, Rizzo says, ?is name recognition ? getting a potential customer to think of Osprey before we make a sales call.? That includes a Web site ? naturally ? but also a lot of traditional efforts as well, such as placing print ads in trade publications, taking advantage of editorial opportunities, making appearances at trade shows, delivering presentations by Rizzo and other members of the management team, creating alliances with software companies, building an international sales force, and opening sales offices domestically in cities such as Boston, Philadelphia, Atlanta, Chicago, Dallas and Miami.
The efforts are paying off, Rizzo says, with gross revenues tripling in 90 days. International business is also starting to take off with such recent clients as Acominas, a Brazilian steel manufacturer, and Domtar Paper and Pacifica Paper, both out of Canada. Osprey also built the e-commerce component of El Sitio, a Latin American B2C portal site similar to Yahoo!. In less than six weeks, Osprey created a multi-lingual shopping experience in English and Spanish and provided creative design services to allow for seamless transition from existing pages to shopping pages.
But as promising as all this is, it isn?t enough. Rizzo estimates Osprey needs another $30 to $50 million in equity to be relevant and sustainable. Up until a few months ago going public seemed like the best option, but, as Rizzo notes, ?with all the volatility and heartburn in the market these days, it?s hard to do an IPO. We?ll make a decision soon.?
Marzak is not so coy. ?There?s no market for e-companies to go public,? he says. ?But we will take advantage of the market if it returns.?
Rizzo remains optimistic about raising capital and he regularly makes presentations to potential investors ?It?s harder to raise $500,000 than $20 million ? the more you raise, the easier it is to raise it,? he observes. ?We are positioning the company to raise as much as we can at the best terms we can.?
Being a service provider helps protect Osprey from market ups and downs. ?One benefit of what we do is that we offer technology enablement services, which everyone needs,? Rizzo notes.
But anticipating market and technological changes and then taking advantage of them when the wave crests is a must for Osprey to survive. Dot.com businesses are already dead, say industry experts, and they forecast B2B websites will fizzle out by 2003. Rizzo says the major players will be determined in the next 18 months.
But while Osprey is looking to be one of those players, it must be simultaneously preparing for what comes next. ?You have to anticipate what?s going to be hot next ? customers come to you as a consultant because they expect you to know these things,? he explains. ?And once you identify the trend, does your workforce have the skills to do it, and can their existing skills be transferred? There?s a constant morphing of skills every 18 months.
?If you guess wrong, you get acquired,? Rizzo adds wryly. Actually, it seems that Rizzo had an intuitive sense of all this when he named his company Osprey. Reading to his children one night, he came upon the description of the osprey as a bird with ?the ability to see clearly through murky waters.?
Says Scott Krasner, Osprey?s vice president, marketing and strategic planning, ?The osprey?s traits are highly valuable in the e-commerce environment ? having a broader perspective, a focused vision, improving over time, and long-term relationships.? (Ospreys mate for life.)
Marzak may not be quite so eloquent but his confidence in Osprey is clear. ?Whatever comes next is still going to have the flavor of ERP and e-commerce, and Osprey knows that,? he says. ?They have a very bright management team who can move very quickly. They have already refocused their business completely in 18 months ? and they can do it again.?
Recently, a private company with proprietary e-commerce-related software hired Marion Bass Securities Corporation to raise between $5 to $10 million of venture capital. As the Bass corporate finance team went to work on a marketing analysis and company evaluation, they recognized that competitive conditions in the marketplace made it an attractive time for the e-commerce company to consider acquisition.
Less than three weeks after the e-commerce company agreed to investigate the potential of a merger, the Bass team found a company that was interested. Six months later, the e-commerce investors received six and a half times their return on equity.
According to Scott Cornwell, vice president of Auction Services, with Assets2Auction.com, a division of Smart Online, Inc., Marion Bass is also largely responsible for Assets2Auction’s success through the acquisition by Smart Online, Inc.
“Marion Bass Securities has some unique qualities about the way they do business,” says Cornwell. “They have a personal approach combined with a strong aptitude for investment banking. This combination of their professional level of business and their personal touch is what guaranteed our success.
“From the beginning, they set out to understand what was going on in all areas of our entrepreneurial lives, all those things going on behind the scenes that move a company forward.
“When we were first forming the company, I introduced them to a lot of our personal advisors, key employees, people who were investing in us and potential employees. They took the time to understand those people. They looked at everything from our long- term goals to our exit strategy and gained insight into why we were building the company.
“We called them once when we were interviewing a potential board member and asked if we could use their boardroom. When I arrived, there were sandwiches from Dean & Deluca. This was in the early days when they really had no guarantee that our company would even succeed.
“At the end of the day, you can have a standard investment banker who’s just there to raise money for you by bringing in a network of investors or you can have Marion Bass. Just bringing in the capital won’t guarantee your company’s success.
“You read about all these dot com companies where two 30-year-olds build a company. No problem! Well, in the real world you need a partner who understands your business and who will commit to be there for you until you reach your goal. I will owe a lot to Marion Bass in the future for sticking with us. They’re a large part of why we will continue to be successful in the future.”
Seeking Out a Niche
Marion Bass Securities has found a lucrative niche by focusing its investment banking attention on companies raising $5 to $15 million in venture capital.
“It’s not a profitable investment range for banks so we fulfill a need in by matching investors with companies,” explains Marion Bass, chairman of the board and chief executive officer.
Bass, 60, entered the investment business in 1966 and founded Marion Bass Securities Corporation in 1979. Today, it is the largest privately owned regional investment banking and brokerage firm in North Carolina with offices also in Raleigh, Atlanta, Knoxville and Little Rock. The company has served individuals, institutions and corporations in 49 states.
In the early days, the company focused on raising debt capital. Then in the 1970s and 80s, Marion Bass shifted its focus into real estate. When the 1986 Tax Reform Act and the Savings & Loan crisis sent real estate into depression, values plummeted by up to 50 percent. Bass took money out of the company pocket to put behind the partnerships and held on. He sold 22 properties of the Real Estate Investment Trust in 1997 and returned money to his investors.
His motivation: “My name is on the door,” he says. “It’s important to stand behind our investments.”
Bass’s investors made out well compared to the rest of the industry according to Bass. The reputation he established through that trial has served him well.
“Over the past three years, we’ve concluded 22 corporate financial transactions with a total volume in excess of $120 million,” he says.
By 1996 the company shifted investment its banking focus once again, this time including capital formation through initial public offerings for mid-sized companies.
Investment Banking With A Personal Touch
Jim Phelps, who heads up the corporate finance team within the firm as senior vice president, holds an engineering degree from Johns Hopkins, an MBA from Stanford and a law degree from UCLA and gained experience in his early days as a Wall Street attorney.
Phelps sums up what Marion Bass Securities does for a company this way: “First we screen a company to determine if it and its technology is too small or too early or too late. We put together information disclosing who they are and what they do. We craft a financial strategy, contact sources of capital speaking with scores of potential investors, craft a sales presentation, arrange meetings, prepare the company for meetings, assist in negotiating transactions, put it all in document form and close the deal. In other words, we orchestrate the process by which folks find formal funding or sell their company. It all has to be done in a matter of months. If it took a year, the company could be dead.”
Despite the grueling pace, he declares, “There’s no more exciting and rewarding work around. It’s challenging. One has an opportunity to really have an impact and we’ve been wonderfully successful. I know we’ve done some things that were exceptionally difficult. Some of it has been by inspiration but a lot by perspiration. In the end, whether someone else could have done it, I don’t know.”
The I-85 “Boom Belt”
Bass founded his business in Charlotte, intending it to be a strategic location in the middle of the I-85 corridor as it stretched between the Research Triangle and Atlanta. His reasons are well-defined. The sector is a hotbed for technology. He now targets companies generally fitting within the parameters of information technology, including software/Internet, healthcare information services and telecommunications (wireless and broadband).
“There has been a shift to a new economy,” he explains. “The foundation of the old economy during the industrial revolution was mass production and labor. The new economy is based on technology and the knowledge of the worker. As we redefine our economy from a digital perspective, we have record numbers of new companies being formed. These need capital, advisory services and need to become public at some point.”
“This [geographical] sector along I-85 stands significantly above the national average of new company formations. In 1999 a record amount of venture capital was invested in emerging companies totaling $48.3 billion. The number one recipient for venture capital was Silicon Valley. Number two was Boston. Number three was the Southeast. In the Southeast, the two largest were the Research Triangle and Atlanta. Last year $1.2 billion in venture capital funds were invested in 109 different North Carolina companies. Of all the venture capital that was invested in North Carolina last year, 89 percent was in the Research Triangle.” Bass also believes Charlotte to be strategic for building his own company.
“Charlotte is one of the top global financial centers in the U.S., just behind New York. It has a good employment infrastructure for our business. We plan to bring between seven to twenty-eight people into the Charlotte office in the next 18 months. We’re looking for topnotch research people in information technology, healthcare information services and telecommunications.”
Bass recently opened an investment banking division in Raleigh because of their major focus there.
“These days, we have to turn business away,” he confides. “We look at 50 companies for every one company we agree to finance. Our team evaluates potential clients on the quality of their management team, the uniqueness of their technology and the new economy space they are focused in before we take on a project.”
Offering Life Solutions through Investment Advisory
Although investment banking is their major growth area, the retail side remains a strong part of the Marion Bass Securities identity.
The financial growth of individuals moving into this region is significantly higher then the national average,” Bass offers. “They need advice on such things as stocks, municipal bonds, asset allocation and estate planning.”
To prepare their financial advisors to meet the needs of individuals as well as corporations they’ve devised a training program for their financial advisor team.
“The demands of the affluent investor are changing because their needs are changing,” says Randy Nash, executive vice president and director of training and development. “To meet these needs, we have developed our training program, Advisor 20/20. The program is research driven and focuses on offering our clients life solutions.” “20/20 indicates perfect sight which is our goal as we look toward the future,” explains Gregg Hollidge, a Bass investment manager with 30 years’ experience in the business. “From our research, we devised a program that would enhance and prepare our financial advisors for the future.
“An investor experiences many changes during a lifetime such as marriage, buying a home, having a child and career as well as tax status changes. With these come change in their financial goals and strategies.
The trend now is away from a broker simply assisting with trade activity toward being a financial advisor, or counselor. A financial advisor looks at the total picture of the client’s life, continually monitoring and assisting in adjusting his portfolio to perfectly fit his changing needs over an entire lifetime.
“For example, as you approach 80, you are less risk tolerant and more interested in income then you are in growth like you were in your 30’s. As a client’s goals change an investment advisor needs to help them develop a discipline for a total picture, not at a point in time but over a period of time in the investor’s life.
”In order to keep their investment advisors up to date on the latest financial products, Marion Bass offers intense and continuous training.
“Twenty years ago, you had mutual funds, Ginnie Mae’s and bonds,” Hollidge continues. “Now you have 150 new products every year. As we look to the future we want to be assured that our investment advisors are the best they can be by receiving continuous education.
“As a smaller regional firm, we have the flexibility to take small groups of advisors and sit down with them continuously. We offer follow-up training, working one on one and support for the advisor as they meet with their clients.”
“The new economy is also an economy of mass customization with the digital evolution of the Web and Internet,” says Bass. “Today you can go online and design your own car from models available, punch a button and have it delivered to your door in 21 days. This ability is making the overall economy more efficient, less time-sensitive, driving costs down.”
“We are presently studying various methods in investment banking as well as brokerage to expand our business with on-line strategies. Customers can sign up for services, transact trades and access their personal information. We plan to expand all that in the near future.”
In the days before cable and satellite television, television viewers could either watch shows on VHF (channels 2-13) or UHF (channels 14-83). The fare on most local UHF channels consisted of syndicated reruns, classic films, “shock theatre”, kung fu movies and other low-cost fare. One UHF station that became a household name was Ted Turner’s Superstation, WTBS, which helped build his media empire.
Now a local Internet company hopes to duplicate that kind of success, ironically, by featuring much of the same content as an old UHF station. Charlotte-based LikeTelevision, Inc. is an Internet broadcast network that delivers a combination of pre-released content and original programming. The company, led by Doug Hawthorn, William Krause and Jim Safran, maintains a library of over 2,000 video clips of streaming media content, including the “Classic Television Channel” with such hits as The Beverly Hillbillies, The Andy Griffith Show and Bonanza. They also have the “Movie Channel,” with films like Night of the Living Dead and The Legend of Marilyn Monroe. The company also offers original LikeTelevision productions and exclusive content created by various artists.
LikeTelevision streams its video and audio content over the Internet. That means anyone with a fairly new computer, a high-speed connection to the Internet and current browser software can watch the show of their choice anytime he or she desires. The three men hope liketelevision.com becomes the premier destination for streaming video as broadband access becomes more common with both consumers and businesses. At the moment, they are ahead of the curve.
“We’re not concerned,” says Hawthorn, chief creative officer. “We know we’re ahead of our time. So were Yahoo! and broadcast.com.” In fact, like so many other Internet businesses, being the first to capture an audience is an integral part of the strategy. “Being first is really an advantage,” says Jim Safran, CEO, and a former executive at Vnet Internet Access and Interpath Communications. “The audience is not just coming to see the movies. It’s the whole experience of the site.”
The company has lined up close relationships with Real Networks, Excite @ Home, ChannelSeek and Scour. Their site is frequently a featured site on Real‘s immensely popular “Take 5” site. Already, liketelevision.com has developed a reputation as a “must-see” Web destination.
In addition to its head start in the market, the company has some technical advantages as well, including a patent pending on what they call “Instant Gratification Streaming”or IGS. IGS is a proprietary process of digitizing entertainment media for computer viewing and streaming broadcast via the Internet.
Hawthorn, an independent audio producer and sound engineer met Krause in 1996 and together they formed Pendulum, Inc. Among other projects, they developed video CD-ROMs for businesses. But they saw the future lay elsewhere. “We knew a lot about distribution for a CD, and how limiting that was,” says Krause. “I knew – everyone knew – it was going to get bigger. That threshold where you could deliver content over the Internet was right around the corner. So we started trying to get good at that because we knew that distribution model just was so awesome.”
Adds Hawthorn, “The system we developed removes the part of the video and audio spectrum that become trash artifacts when the file is interpolated for streaming over the Internet. So the stuff that you are encoding is all real. It’s not turning into artifacts.”
In the age of the convergence of television and the Internet, the three men and their staff at LikeTelevision are both throwbacks and visionaries.
“Unlike a lot of sites out there, we’re not anti-television,” says Safran. “We’d love for our stuff to eventually migrate back towards that, and we’d love to show the way.”
Indeed, the programming on LikeTelevision is not based on any scientific research. “We pick programming based on what was entertaining to us,” says Safran. “We want to make sure some of the old stuff has a home. And I think the public recognizes quality. That still matters out on the Internet.”
Apparently it does. Last July, they were streaming 1,000 videos per month. By December, they were doing over 500,000 a month. Today they are up to 1 million videos streamed per month, and their prospects only look brighter. Forrester Research estimates that by 2003, there will be over 25 million broadband subscribers.
“We really are better known outside this area than we are here,” says Safran. although each of the three principals has been here about 20 years, “It’s almost just by luck of geography that we live here.”
Adds Krause, “For every person watching here, there’s 1,000 watching in California,” says Krause. “And that’s true of 15 or so other states.” Future revenue drivers will depend on that national audience, as the company plans to forego banner ads for 30-second digital commercials.
LikeTelevision plans to establish a high performance server infrastructure this year and add additional staff to help accommodate their growth. The company is looking for another round of financing, hoping to raise $10 million.
Using the latest technology to deliver old television programs may seem a bit ironic, but Andy, Jethro, Little Joe and the rest of the gang are at ground zero in the convergence of the Internet and TV. And a Charlotte company is the reason why.
Are you a naive “Babe in the Woods” suffering from lack of interest in your financial portfolio? Or perhaps a damsel in distress waiting for your White Knight to rescue you from a prison of investment boredom? Maybe you are more the Cleopatra type, a successful career woman who is convinced she doesn’t need any help managing her money. These are just three of the six “investment syndromes” some women suffer from when dealing with money matters.
Julie Garella and Michelle Maidt, principals of Carnegie Capital Advisors, have identified these syndromes, and they aim to combat these and other fears that women have regarding their finances. Although Carnegie manages both personal and institutional portfolios, educating women about their finances has become the two women’s biggest passion.
In 1997, Garella and Maidt founded Carnegie, the only financial services firm in the Carolinas owned totally by women. The two partners met through the Carolina Association of Women in Investment in the early 1990s. Garella was working at Interstate/Johnson Lane in Charlotte as senior vice-president of fixed income sales. Prior to that job, she worked with Smith Barney Harris Upham in Charlotte, where she managed portfolios for high net worth individuals, retirement plans and custodial accounts.
Maidt spent 23 years with Royal Insurance in Charlotte as their property and casualty portfolio strategist. She also was head of equities at Royal, where she managed all portfolios, including the pension and 401(k) plans. Before that, she managed fixed income for the property and casualty portfolio and the company’s pension plan.
Garella wanted to start a woman-owned investment firm. She saw her strengths as sales and marketing and felt that Maidt would be the perfect partner in the enterprise. “Michelle had a lot of depth and experience in the markets. We would have these breakfasts at Bruegger’s, and I would keep asking her what she wanted to do ‘when she grew up.’ She had 23 years of portfolio management experience and knew how to run a company.” Maidt eventually signed on “for the challenge of building a company from the ground up.”
taking the plunge
In 1997, the two women took the plunge and started Carnegie Capital Advisors; a SEC registered investment advisory firm dedicated solely to investment management. They are a client-driven firm composed of three divisions. Each division focuses on a different client type: Institutional Asset Management, Fund Management and their Private Client Group.
Carnegie’s portfolio managers develop a strategic investment plan for each client that maximizes returns at a pre-specified level of risk. The company only services high net worth individuals and companies, “but we will refer other clients to a stable of other people that can help them. We don’t want to be all things to all people,” says Garella.
Garella remarks, “All our clients are looking for a highly consultative process. That’s what we offer: a big picture approach to financial management.” Carnegie employees look at a client’s business plan, goals and objectives and long-term strategy.
Maidt explains: “We define the client’s goals and objectives, then we come up with what the strategy and asset allocation should be.” Garella adds, “We manage expectations. We have charts and graphs to show them volatility versus return.”
Maidt cites the example of the April NASDAQ plunge to illustrate their clients’ response to a potentially frightening market situation. “After NASDAQ tanked, we didn’t have one client miffed. We analyze the values of clients’ securities beforehand and spread their portfolio out among different industries.” Garella supports Maidt’s statement saying, “The reason we didn’t have panicked clients after the market went down 600 points is that we had a plan to deal with each client. We really spend a lot of time with them on the front end.”
Both Garella and Maidt have found the Charlotte climate hospitable to a female-run and owned business. Garella emphasizes “We started the business by asking people what they needed. We work with the client to educate them while they educate us. In two or three meetings, we’ll show the client our overall strategy. We pay for ourselves.” Maidt adds that they have encountered some skepticism: “We’re just going in with our expertise. We’re relatively new, so some people are cautious.” Maidt says Carnegie obtains most of its business through referrals and “word-of-mouth reputation. Some of our institutional work has also brought in individual clients.”
helping women invest
Although the Carnegie team did not originally target the women’s market as clients, Garella claims, “That’s where our greatest successes came from.” Women are now involved in all areas of finance and investing, either as employees or as the managers of their personal and/or their family’s income. A recent study by the National Association of Securities Dealers found that women now make up over 47 percent of investors. According to this same study, women’s investment portfolios often earn more than men’s do.
Despite this success story, many women are still reluctant to deal with investing their earnings. Fear of the unknown holds many of these would-be investors back. The biggest mistake a woman can make with her finances, says Garella, is “not getting involved.” Many of their individual, high net worth female clients come to them as widows or divorcees. Maidt relates, “Once they come to us, they get a little more educated. Especially in a divorce situation, they’re scared. A lot of them don’t want to deal with finances.” Garella adds, “These women come in here and with a little education, they get very involved in their finances.
They get hooked. Taking care of your finances is empowering. You get more confidence in all areas of your life. It’s a very positive thing.”
To help further define and explain their female client’s fears, Garella and Maidt have identified six investing “syndromes” that women often experience. They call the syndromes “Babe in the Woods,” “White Knight,” “Cleopatra,” “Dear in the Headlights,” “Bag Lady” and “Golden Girl”. These syndromes affect women from all income levels. Garella and Maidt claim that although women may identify with more than one of these mentalities; there is usually one scenario that dominates their investment pattern.
babe in the woods
“Babe in the Woods” tends to be an intelligent young career-focused woman. She uses her hectic schedule as an excuse for not learning about her finances and puts investing low on her list of priorities. The cure for such folly? According to Garella and Maidt, there are four steps: 1.) Pay yourself first. 2.) Design a simple plan to invest as much as you are comfortable with in your company’s 401(k) plan; 3.) Pay off credit card debt; 4.) Invest $100 monthly in mutual funds. The results? Investing $100 per month could create a portfolio worth as much as $17,384 in ten years, $87,727 in twenty-five years, and $206,780 in thirty-five years. Not too shabby!
“White Knight” syndrome is one that all too many women fall into. Women who identify with this mentality expect that someone else will take care of their finances. Such a woman may not be able to read her financial statements, understand why and how her money is invested, or to determine if she is making a good return on these investments. Her knight may or may not turn out to be Prince Charming. The cure? Find someone objective (who is not related) to teach her about managing your investments. The result? The more confidence she gains in the financial area, the more she will enjoy managing her money.
“Cleopatra” syndrome strikes most often in high-powered career women. The modern-day Cleo is a mover and shaker who earns a significant income. She may toy with on-line investing and think she has the expertise to handle her finances on her own. What she won’t admit is that she doesn’t have the time or the expertise to make all her investment choices with no outside advice. Garella comments, “This high-powered executive is doing it all. However, no one can do everything well. Investing is a full time job.” Maidt adds, “We show clients that parts of their portfolio may be dormant.” Some Cleopatras may also become overly attached to an approach to investing that no longer fits the market. As Garella points out, “If you become too dogmatic about owning something, you lose opportunities.
dear in the headlights
“Dear in the Headlights” syndrome occurs most often to women who have experienced a divorce, a husband’s death, or even a job change. Women in these stressful situations may turn inward and try to avoid dealing with their new situation. Like a deer caught in the headlights of an on-coming car, such a woman is vulnerable and her inaction may yield unpleasant results. The cure is to relax and untangle herself from her emotions. Garella and Maidt claim that a well-trained financial advisor is as critical at this time as a lawyer. The result may be a much more equitable financial outcome in a divorce or a better financial strategy as a widow or new jobholder.
“Bag Lady” syndrome is often seen in women who have inherited wealth. Garella observes, “A lot of times, these women haven’t earned the money, so they don’t know how to replace it. There’s a lot of fear of the unknown here.” Maidt adds that this is a syndrome often seen in children of the Depression and World War II. “These are people who only believe in hard assets.” Maidt also includes investors in the 1973-1974 market crash who “got burned.” This woman may not be very savvy about investing and tends to be a “financial hypochondriac.” The cure again is to seek out a good investment planner to allay those financial demons. The Bag Lady should get involved and help her advisor develop a portfolio that will maintain her lifestyle. Garella and Maidt have seen the resulting knowledge and confidence gained through this exercise help such women not only to maintain their wealth, but also to increase it through strategic investment planning.
Finally, “Golden Girls” syndrome refers to women nearing retirement. This woman may be a married woman or a widow. She may have kept up the family finances for years, saving little bits here and there. However, her finances, like her files, are in disarray. Organization is her downfall. Garella points out, “As you go through life, you choose goals and you constantly have to readjust those goals. Just because you were good at accumulating wealth doesn’t mean you can put it under your mattress.”
Whether or not you suffer from one of these investing syndromes, Carnegie Capital Advisors still aims to guide both institutional and individual clients through all types of investment hazards. Both Garella and Maidt claim that on-line investing and boilerplate investing services can’t replace the one-on-one service and expertise that a firm like Carnegie provides. Maidt cites an example: “An advertiser on CNBC had a market system of when to buy and sell stocks. They got absolutely crushed on margin calls.”
Regarding online investing, Garella adds, “You can’t get strategy off of a computer.” Both the principals in this firm agree that investing fads come and go, but they claim there is no substitute for the consultative portfolio management process. Garella also adds “We’re not into market timing, we’re into portfolio management.”
When Charles Saleh arrived at Southern Engineering headquarters in 1994, he found mass destruction from a recent tornado, obsolete equipment, a handful of employees and only one personal computer in the entire building. Charged with the seemingly impossible – rescuing the bankrupt business – his future looked bleak. “Normally when you start a company, you start at ground level,” Saleh replied. “We started below ground. People thought I was crazy.”
The situation was a far cry from the company’s heyday. Founded in 1911, Charlotte, N.C.-based Southern Engineering was one of the premier steel fabricators in the Southeast. Dubbed “Little Pittsburgh” the company’s Wilkerson Boulevard headquarters fabricated and erected most of the buildings in Charlotte and the surrounding area, including Independence Arena (the old Charlotte Coliseum), Ovens Auditorium, and power plants dotting the region. Many current competitors launched their careers and learned the steel fabrication business at Southern Engineering.
But in the economic environment of the early 1990s, the company began to falter.
Gregg Lucas, industrial analyst at Wachovia Securities, explains, “The steel business is a notoriously cyclical business. When the economy catches a cold, the steel catches the flu.”
Additionally, Southern Engineering had relied too heavily on large projects for big corporations. The narrow customer base left the company in the lurch as corporate giants scaled back or placed projects on hold during the recession in the early 1990s. Saleh says, “When the big customers dried up, there wasn’t enough to keep it alive.”
Old, decrepit facilities only added insult to injury. With creditors mounting, the company filed for bankruptcy. Its subsidiary company, Catawba Rebar, shut down completely, and Southern Engineering employees waited for the ax to fall.
But much to their surprise, it didn’t. The Nuqul Group, a worldwide conglomerate with roots in the Middle East, saw opportunity in the ailing business. They set up a holding company, Beta International, and purchased Southern Engineering and Catawba Rebar in 1994. Nuqul poured $5 million into new equipment and technology, and Charles Saleh was appointed the task of the turnaround.
Some weren’t so sure that resuscitating the fabricator was such a good idea. The steel industry is inherently risky. Analyst Gregg Lucas comments, “When companies tighten their belts, they tend to delay building. The cycles are particularly tough, exaggerated at times because it’s not just what happens here in this country, it’s the whole rest of the world.” He adds, “There’s always the question of how foreign economies will affect our supply and demand.”
“Why steel?” counters Saleh. “You will always need steel. Steel is one of
the basics in life.” This engineer-turned-businessman actually welcomed the challenge.
“Show me an industry that is not competitive. The issue is not competition. It’s how much confidence you have in yourself.”
Still, Saleh had to instill that confidence in his weary employees. “I had to build trust,” he says. “I told them that we were going to be the premier company in this area again. But I didn’t just want them to hear my words; I had to prove it.” On the offensive, Saleh acted more like a coach than a president. He rehired laid-off employees and encouraged creative problem-solving. He overhauled inefficient and outmoded practices. And he instituted training, quality improvement and safety programs that exceeded industry norms.
Saleh’s management philosophy is quite simple. “It really comes down to the basics. The number one rule is trust. Your word is your bond. When you do the right things in life and treat people well, the rest will follow.”
Bankruptcy had also eroded the trust of suppliers and customers. Saleh carefully set out to rebuild those relationships. He paid suppliers COD until the company regained credibility. He boldly approached potential customers, bidding on small projects, and earning their respect by exceeding expectations. “We had to start small,” he recalls. “We told them that we were a new company. Give us a chance and we won’t let you down. And we didn’t.”
As the sleeping company came back to life, Saleh looked to expand Southern’s geographical reach. His goal was to offer turnkey service to contractors and developers throughout the eastern United States. With Southern making a steady comeback, he set his sights on Lynchburg Steel.
Unlike Southern Engineering, Lynchburg Steel had never fallen on hard times. This Monroe, Va.-based fabricator had grown steadily to $45 million in sales in 1996. With another facility in Abingdon, Va., the outfit was clearly a success story. Beta International acquired Lynchburg Steel in 1997.
The sale did not affect any of the local jobs, and the management team was left intact. Saleh notes, “Nothing changed except ownership. The company is still ‘humming’ like it has always been.” Founder, C.V. “Andy” Anderson is now chief operating officer.
With Lynchburg Steel in its fold, Beta International has extended its customer base as well as its geographical reach. A perfect complement to Southern Engineering’s markets, the combined companies now support customers from Massachusetts to Florida.
Saleh has diversified Beta International’s affiliate companies into new markets. Business lines have expanded from steel fabrication services and rebar for construction into non-construction fabrication, like components for truck bodies and chassis. Capitalizing on the synergies of its affiliates, Beta International is now a powerful one-stop resource for the construction industry.
In recent years, Beta International has provided all the steel and fabrication services for Concord Mills Mall, IBM facilities, and the University of Maryland Performing Arts Center. Saleh recognizes that talented managers are critical to the company’s ongoing successes.
“No one claps with one hand. You always have to have good people.” He considers Bob Hackworth, executive vice president; Shawn Plyben, engineering manager; Jim Anderson, director of operations; and Jim Patterson, financial controller, invaluable to company. He also credits Tony Glaser, vice president at Carolina Rebar, as well as Andy Anderson and his son, Doug, at the Virginia facilities.
Charles Saleh admits that engineers don’t always make the best business-people. “Usually, when you’re so technically-oriented, you think of things in minute details. But you can’t run a business that way. That’s one thing I’ve had to overcome.”
from the heartland to the south
He also had to overcome bitterly cold winters in the Midwest. As a young man, he visited his sister in Des Moines, Iowa and decided to attend Iowa State University. “I visited in the summer and it was absolutely beautiful,” he remembers. “I had no idea it could reach 88 degrees below in the winter.”
But Saleh was no quitter. He obtained a bachelor’s degree in mechanical engineering in 1980 then headed south, completing a master’s degree in mechanical engineering at Georgia Tech in 1982. He worked for IBM until 1991, when he launched Alpha International Trading Company, a pulp and paper export business, that he still runs today. Saleh also holds a N.C. Contractor’s License and a N.C. Real Estate Broker’s License.
When Nuqul Group tapped him as president of the newly created Beta International in 1994, the job appealed to his entrepreneurial spirit. Unfazed by the seemingly impossible task, he said, “One of the things I learned from my dad was persistence. Keep knocking on that door until it opens.”
At 42, he is surprisingly young for such a momentous undertaking. But his biggest priority is his wife, Mary, and their five children. Saleh is also deeply committed to the community; “We need to be known for our ethics and for making our community a better place to live.”
He has demonstrated this dedication, serving on the Charlotte Chamber’s Board of Advisors, as Chairman of the Manufacturing Flagship for Carolina Advantage, and on the Charlotte-Mecklenburg Development Corporation. Saleh is also a member of the Westside Business Association and supports programs that target Westside youths. “It’s important to help children get the best start.”
Southern Engineering has grown from 13 employees in 1994 to 130 today. Carolina Rebar, once empty and lifeless, now employs 30. Lynchburg Steel is better than ever. Although Saleh is proud of material achievements, he has a broader vision of success. “It’s easy to be successful upfront. But the tough part is in sustaining it. Now that we have grown to this level, my next priority is not only to sustain it, but to make this a solid and stable organization.”
The Internet has shaped a new medium for doing business. Fueled by the accessibility of personal computers and the low cost of connectivity, The World Wide Web has fundamentally changed the way companies compete. New “dot com” companies that didn’t even exist a few years ago are selling products and services directly over the Web. As the pioneers in this new e-business world, they are challenging established “brick and mortar” enterprises to change their business models. Slow and steady may not win this race, and increasingly, traditional businesses are turning to a new breed of Internet-savvy consultants to help them compete.
The market forced us to go to the Internet,” says Tim Roche, senior vice president and CIO of Mergent FIS.
“Our product is business and financial information. Many of our customers wanted to receive the product by the Internet rather than in print.”
FIS, formerly a division of Moody’s Investment Services, was purchased by Mergent, Inc. in 1998. Based in New York City, the company’s data collection operation is in Charlotte.
Since John Moody pioneered the collection and dissemination of information on securities in 1900, FIS has been a highly respected publisher of a wide range of well-known manuals, investment guides and other products.
It has more than 15,000 customers who are annual subscribers to these products as well as buyers of individual products. Many of its customers are reference professionals at university and public libraries. Until 1990, FIS’s cornerstone products were its manuals and investment guides. But then, Roche says, the company began to focus its product-development agenda on CD-ROM technology. “Now we’re seeing the Internet replace CD-ROM and even some print sales,” says Roche. “CD-ROM technology is no longer in favor.”
As it looked for ways to move from print to the Internet, FIS turned to the Charlotte office of Oracle, the world’s leading supplier of software for information management and the world’s second largest independent software company.
Originally a developer of traditional database software, Oracle repositioned its business a few years ago as an Internet-based solutions provider. Last year its earnings jumped 33 percent to $1.4 billion, on sales of $9.3 billion. Oracle was able to provide the software tools to help FIS make the transition from print to the Internet.
The FIS database consists of over 10,000 U.S. public companies and more than 12,000 international public companies. It includes financial statements, business descriptions, capitalization structure, and share price data.
“We had many different systems, all oriented toward print products,” says Roche. “We needed to move data in a more timely fashion. The biggest benefit of the Internet is that it could provide more information much faster.” The company now uses the Internet to speed access and delivery of the data to customers with time-sensitive needs.
“We lose business if we provide wrong, bad or out-of-date data,” says Roche. “If we lose business, we lose revenue. The new system has much better integrity.”
Another example of a successful partnership of this sort is the one between marchFIRST and clicklogistics.
Headquartered in Concord, clicklogistics provides comprehensive business-to-business logistics solutions. “Click” was established in July of 1999 and is a subsidiary of Cardinal Logistics Management, Inc. Click’s services include order management, carrier management, optimization and consulting. Its customers include other dot coms, retailers and manufacturers. While each customer’s needs differ, most have both domestic and international shipping requirements.
“Click is not a pure dot com, nor is it a startup,” says Eric Wolfe, Click’s chief operating officer. “We have an established book of business and an infrastructure of experienced personnel to back our technology. Our business is building and supporting effective transportation processes – we want to use technology to support efficient communication, not technology as an end in itself. We recognized however, that we needed to get the technology in place to support Internet activity and we needed to do it very quickly.”
Click turned to marchFIRST for help. MarchFIRST was created earlier this year through the merger of two industry powerhouses, Whittman-Hart and USWeb/CKS. Robert Bernard, president and CEO of marchFIRST, founded Whittman-Hart in 1984 to provide services and solutions for IBM’s midrange computers. By 2000 he had grown the firm into a leading provider of e-business solutions for fast-growing and middle-market companies.
USWeb/CKS was founded in 1995 by three former Novell executives. It rapidly became a leader in Internet professional services, with a strong emphasis on the business-to-consumer marketplace and brand building. As a result of the merger, marchFIRST has a multidisciplinary focus. It has 8,500 employees and offices in 654 cities and 14 countries, with headquarters in Chicago.
“We don’t have a large development staff and don’t plan to have one,” says Eric Scholar, Click’s chief community officer. “We’re a logistics company. We choose to target alliances with technology providers and providers of supply chain services so that we can focus on our core competency – excellent logistics management services. MarchFIRST is one of the links in our chain of alliances.”
MarchFIRST sent a team to do a technological assessment for Click. Then they suggested specific changes in network hardware and helped develop a different format for the data that was being exchanged with customers.
“These guys had a good idea of what they needed to accomplish,” says Jon Nance, senior manager at marchFIRST. “They just didn’t know how to do it. We became the enabler.”
One requirement from Click was to use the Extensible Markup Language (XML), a format for structured documents and data on the Web, for data exchange. XML can be used by an individual or a group of individuals or companies that want to share information in a consistent way. MarchFIRST worked within Click’s existing framework of Microsoft technology and tools to create new interfaces for receiving XML-based messages.
“The use of XML, to send and receive business documents, is very new and industry standards are still being contested, but we believe that its inherent flexibility makes it the best choice to support our e-commerce initiatives,” says Shanon Hart, Click’s chief knowledge officer. “We want to leverage technology that can be used today and that will also drive us into the future.”
Nance points out that the interfaces they developed give Click a repeatable solution to the problems of electronic date interchange. It provides an application beyond just one customer.
“Customers need to make an order, find out the status of their order, find out what they owe, and pay it all in one system,” says T.J. Felice, office managing partner at marchFIRST. “We were able to develop that system for ordering, invoicing and remittance.”
“We worked with Click exactly as we do with other clients,” explains Nance. “We recognize that we are nothing more than a tool to them. They needed to grow their business. We helped them create a strategy and the plan to implement it.”
Some businesses need an e-business solution for internal problems. Addison Whitney, a Charlotte-based strategic branding and design consultancy serving Fortune 1000 companies, had a problem managing its internal database system. It turned to System 5 Technologies for help. System 5 undertook a two-month project to revamp Addison Whitney’s internal data system.
“They knew what they wanted,” says Nadine Film, account executive for Charlotte and Western North Carolina and South Carolina at System 5. “They just didn’t know how to get it.”
System 5 Technologies is a five year old company with headquarters in Charlotte and offices in Raleigh, Knoxville, Atlanta and Orlando. The company works with customers to bring current technologies together with the customer’s business vision. It provides companies with a complete “end to end” business solution. System 5 is the 14th fastest growing privately held firm in the Carolinas, according to KPMG.
The way System 5 worked with Addison Whitney is typical of the way
it partners with its clients. The process began with a discussion of Addison Whitney’s business practices, rather than technology.
“We had to understand how they wanted their internal process to work,” says Film. “Then we could help them select a solution which would best fit their needs. Once the package selection was done, we helped them implement it.”
The result is a database which manages Addison Whitney’s contacts with its customers in a more efficient and secure way. There is one all encompassing database for internal employees to work with, but it is partitioned and access is restricted. The database is designed to grow as the company grows.
“We were able to help them redefine the way they were handling contact strategy,” says Film. “We were able to use technology to accomplish Addison Whitney’s objectives.”
Rutherford-based Tanner Corporation manufactures women’s high fashion clothing apparel as well as gifts and accessories. It sells these primarily through a network of approximately 2,000 wardrobe consultants across the country. This sales force needed to access information stored at Tanner’s headquarters, regarding historical buying patterns of their customers, the current status of the inventory, and more detailed specifications of the Tanner product line. The consultants also needed to be able to place orders on-line and to improve and expedite the sales cycle.
Tanner had been producing monthly printed reports and mailing them to consultants. This was ineffective because of the cost involved and the time lapse between when the report was generated and when the consultant received it. The answer was to create a Web site for the sales force, not for customers, which could do more than simply deliver reports. To develop the site, Tanner turned to OnSphere Corporation, a spin-off of DB Basics Inc. which was founded in 1988 in Raleigh.
In January 2000, DB Basics created OnSphere to specialize in helping companies develop their e-business objectives. The company was one of the first in the nation to specialize in client/server development and training.
OnSphere developed a Web site for Tanner that generates reports on demand. This eliminates the problem of stale data.
“The majority of our work is with companies who want to be proactive,” says Matthew Toney, e-business solutions manager at Onsphere. “Technology has grown at a faster rate than many businesses can handle. That’s why they come to us. Tanner didn’t just save money this way. The consultants were able to get the information they wanted, when they wanted it.”
This solution was so successful that Tanner officials began to see other ways the new technology could work for them. The order processing department saw that sales orders could now be initiated on the Web rather than over the telephone by order entry clerks. The Doncaster clothing-line catalogue could be transferred to the Web site. Additional information and more detailed specifications could be included in the online catalogue than in the printed version because of space and cost. Also, the internal management team started using the report system.
“Like most clients, Tanner came to us with one idea,” says Toney. “When that was implemented, it opened doors to other ideas. They could see ways to solve other problems with Internet technology.”
As quickly as the Internet is revolutionizing the way we do business, the Internet services market is growing to help businesses of all sizes make the transition to the new world of e-commerce. By 2003, the Internet services market is expected to reach $80 billion in North America alone. Companies looking to make the transition to e-business models have plenty of help.
“We decided to focus only on quality custom work and it was a gamble.”
So says G. Michael Walker, president and founder of G. Michael’s, a premier display design firm in Charlotte. Few people think about display design, but this competitive, if not hidden industry is big business. Walker studied the market and positioned his company for explosive growth. “We made a strategic decision that we were not going to be another large retail outlet,” he explains. “We were going to be a boutique, which meant we had to be better than everybody else.”
Walker’s gamble has paid off with bigger, better facilities and more employees to handle the growing number of clients. Display design combines the best of art, engineering, technology and imagination to create sets for television, museums, theme parks, trade shows and much, much more. G. Michael’s boasts an impressive client list that includes corporate powerhouses and nationally known brands. Today most clients come to G. Michael’s by referral. But it wasn’t always that way.
Back in 1981, G. Michael’s was a fledgling design firm with only three employees. “When I started out, we were set designers,” Walker recalled. “We would design and build sets for TV commercials.” In the era before North Carolina’s appeal to the film industry, Charlotte was a booming town for commercials. Jefferson Productions (now Jefferson Pilot) and other major production companies generated much work for the tiny firm. “The first year we were in business, we did 70-75 sets for commercials.”
The company had a curious business mix, with television and theme park attractions.
Then Jefferson Productions exited commercial-making. Walker had to think fast; his business depended on it. He instinctively chose another revenue channel.
“When I was in college, I had designed a couple of exhibits, so I decided that maybe the exhibit industry was the one to go into. We started doing exhibits and it just took off.”
By then, Walker’s wife, Bunnie, had joined the firm. With a strong background in sales, she drummed up new clients in the trade show exhibit business. Bunnie made cold calls, generated new business, and took tighter reigns over the company’s financials. The business began to grow. Walker’s innovative designs and commitment to customer relationships also had an impact. “We had a lot of success because we had a lot of new ideas.”
Despite his promising future, Walker still had a tough time sleeping at night.
“I used to worry about going bankrupt every day. That really bothered me.” He was also concerned that the business was not well-capitalized. Funded through private sources, Walker wondered if the company had the resources to thrive.
“We were growing only in bits and pieces,” he remembered.
At that time, G. Michael’s was not only fabricating $50,000-plus custom trade show exhibits, but also selling less expensive, modular “pop-up” units. “We were trying to be everything to everybody,” Walker explains. “We were pulled in a lot of directions.” He also wanted to expand his revenue mix to other areas. Walker took a hard look at his firm and changed its direction. The firm discontinued selling portable modular exhibits in 1994 and hasn’t looked back since.
“When we decided that we were going to be the best at what we do – that’s when we really began to grow. For the last couple of years, I’ve relaxed, not worrying about success or failure. Our focus is on growth.
“Today, we don’t market trade show work, we don’t make cold calls. About 99 percent of our trade show exhibit business comes from people who see our work in a show hall and come to us. That side of the business has grown in spite of ourselves.”
About three years ago, the firm ventured into the world of museum exhibits. Although museum designs tend to require more technology than trade show work, Walker finds this segment rewarding. “It has more permanency, ” he notes.
G Michael’s now has five designers and one individual whose sole responsibility is exploring new technology. “That’s why we’ve really grown in the last three to five years,” says Walker.
Companies also flock to G. Michael’s because of its commitment to customer relationships. “We are image builders,” Walker clarifies. “It’s important for us to know the clients inside and out. We have to understand the client’s products, how they sell, and their competition to do a good job.” This strategy has afforded the company a diverse and loyal clientele.
Today about 50 percent of the firm’s revenue comes from trade show exhibits; 40 percent from museum exhibits; and 10 percent from television sets, corporate lobbies, and show room displays.
The challenges Walker now faces are different from the ones he dealt with several years ago. “Labor is always a challenge,” he comments. “A lot of kids come out of college without the right tools for this industry. Graduates know theory and how to use software, but not design basics. What’s more, high schools don’t teach industrial arts anymore, so our work pool [for fabrication] is smaller.”
A graduate of South Mecklenburg High School, Mike Walker took a circuitous route to custom display design. “I was going to be either an architect or a preacher.” But after briefly attending UNC Charlotte’s Architecture and Engineering School, he left to join the Navy. Four years later he returned to Charlotte and received an associate degree from Central Piedmont Community College in graphics arts.
A born conceptualizer with a gift for design, he applied to Appalachian State University’s program in Industrial Technology. “Industrial technology involves design, plastics, metals, wood, electronics – a little bit of everything.” He grins. “Every day of my career I use something I learned in college.” With a business minor, Walker obtained his bachelor’s degree in 1977.
Walker moved to Atlanta, where he headed up the research and development department for a large point-of-purchase manufacturer. Disenchanted with Atlanta, the Carolina native returned to Charlotte, working as a senior designer at another firm. After a few years, he struck out on his own.
Display design is both a creative and exacting craft. The G. Michael’s design team is well versed in graphic design, architecture, technology, museum design, three-dimensional design and interior design. Although computer skills are crucial, the ability to conceptualize an idea is what drives the process forward.
After a year in its current location, Walker is already expanding. “We’re probably looking at another 11,000-12,000 square foot addition in the very near future,” he estimates.
G. Michael’s is a family affair. Walker’s wife, Bunnie, is executive vice president in charge of new sales. He praises her business acumen. “She’s been the biggest asset to the firm. I couldn’t have done this without her.” Their son, Todd, a graduate of the Savannah College of Art & Design, is a designer.
Walker’s younger brother, Terry, is vice president of operations. Mike Walker still spearheads the creative aspects of the firm and is assisted by David Carpenter, who is vice president of design.
At 50, Walker hasn’t really slowed down enough to truly savor the fruits of his labor. But he’s working on it. “I want to continue to grow the company, but focus on the next generation. I want to empower my employees to run this business without me. Someday I expect to retire and just go diving with my wife.”
Now we’re talking about underwear on the Internet. Well, men won’t talk about it in the department store or anywhere else in public, so why not a specialty Web site? After all isn’t that easier than asking the 19 year-old female clerk at the store “Just how do these briefs fit?” Belmont-based yourunderwear.com caters to men who don’t like to buy at stores by providing designer quality undergarments – everything from T-shirts to socks and of course underwear – on the Internet.
“Undees, skivvies, undershorts…There are only so many ways to say underwear – and after all, that’s what we’re talking about.” Nolan Mills smiles as he describes how the company got its name. He and his partner Jimmy Poag have the background to make this site successful. Poag’s 15 years of experience in underwear engineering fit with Mill’s 10 years’ experience in the textile industry; together they know underwear.
Native Charlotteans, the two men met through mutual acquaintances in early 1998. Not long after, they put their heads together to go into business. While all duties are ultimately shared, Nolan Mills manages the marketing and Jimmy Poag is responsible for the technical aspects of the products. Both are involved with client satisfaction.
The two entrepreneurs’ strategy is to market a high quality product with a level of customization no other company offers, and to use the Web to keep prices competitive. They have taken the attributes of top designer brands and rolled them all into a single premium line of men’s undergarments. Along the way, they have made some improvements. The T-shirts are longer, the briefs fuller, and the socks softer than comparable products.
In July 2000, when the site is revamped, clients will be able to customize the fit even more. As Mills explains, a 6-foot tall man and a 5’5″ man, each with a 42-inch chest and 34-inch waist, need different lengths in their T-shirts and in the legs of their boxers. One size really does not fit all. Taking this into consideration, your-underwear.com will offer more varieties of sizes that are suited to men’s different body types than the traditional small, medium, large and extra large method. The site will have a table with height and weight that customers can use to find just the right size product for their body shape.
But even with all their customization, Poag and Mills are able to keep costs down by using the Web to sell directly to the consumer. By simplifying the packaging and eliminating the overhead that brick and mortar retailers encumber, their prices are competitive with comparable retail brands.
Their knowledge of the industry and how sizes and qualities differ should also give the two men an edge. Little things like knowing knits only shrink seven percent, while boxers don’t shrink at all, are important when calculating size and fit. All of the yourunderwear.com products are made in North Carolina by Beltex Corporation, a manufacturer of premium undergarments for over 55 years.
It’s not that most men don’t care about their underwear, it’s that they don’t make time to buy it. They let the women in their life purchase underwear for them. In fact, more than 70 percent of all men’s underwear is bought by women. So Mills and Poag are letting their clients, both men and women, discover what they like from their Web site.
Men may want to try the boxer briefs or boxers, but they really don’t want to agonize over the decision with a clerk in a department store comparing brands, prices and fits. “That’s why most men buy something and wear it until it falls apart,” say Poag. “We want to offer men an easy way to figure fit and pick a style. Try it. If you don’t like it for any reason send it back.” They really mean that too.
Since November of 1999 there have only been two returns which resulted in exchanges for size, beams Poag. “I’m not saying that something couldn’t slip through, because anything is possible, but our quality control process is quite detailed. It is checked at every stage of manufacturing, including being checked by a Zero Defect team, and again at packaging. The little stickers you see when you unpack the garments – ‘Inspected by #7’ – well there really is a number #7.”
Not that there haven’t been some challenges to overcome. They had a great idea, the business experience, but not the technical expertise to bring the dot com to life. They found an advertising agency, a web boutique and a hosting company and utilized their own graphics talent to design the site. The Web site went live November 15, 1999, coupled with local advertising on television and radio. The original hosting company wasn’t able to keep up with the demand, though, which caused the Web site to stall or fail to load altogether. It’s the kiss of death for a dot com. “It’s quite serious. You can lose a customer in 16 seconds on the Web,” says Poag. As of January 2000 they were using a new host provider and the Web site problems have been resolved. This summer, they are planning a major nationwide advertising campaign to announce the revamping of the site.
Yourunderwear.com is designed to provide premium quality underwear, at half the designer prices, with accurate fit for a client – who really doesn’t want to shop for them at a store anyway. They’ll even offer you the opportunity to subscribe to regular shipments on a schedule that you determine. Either way, they’ve got you covered.