Vig Sherrill : Aldis

On March 1 we visited Aldis in Oak Ridge. Aldis is Vig Sherrill's most recent venture. Aldis is seeking to improve traffic flow with control systems using fish eye cameras and vehicle recognition software. The Aldis system tracks vehicles and sends calls to traffic lights when vehicles approach intersections. It does this all through a camera which replaces the current in ground induction systems which fail and have to be replaced fairly often. Aldis is strictly a software company, they allow others to produce the hardware which their system runs on. This allows the company to take advantage of Moore's law; next year when faster processors come out Aldis does not have obsolete products, they just install their software on the new faster platform giving their product more functionality. The real problem with Aldis's business is that the end user is not the person who will pay for the technology. The end users will be drivers however the municipal government which maintains the traffic lights will be the decision maker on purchasing the product. There has to be some value in the product for the city governing offices. For this reason Aldis has built in the ability for the software to count every car that comes through an intersection over a given time period. Normally cities send workers out to intersections with clipboards to take samples of traffic numbers. With the Aldis system there will be no need to count with a clipboard, the data will also be much more accurate. This data can also be used to determine the best place to build new stores or community attractions. Aldis is a venture capital funded company not because they think they will make a ton of money selling camera's to put on every traffic light in the US, but because there will be substantial value in the data that is collected from those systems. Vig's memorable advice was "Don't start a company, you have to work really long hours, put in tons of effort, success chances are small, why would you do that? You would have to be crazy!"

Jeff Bohanan : Protomet Precision Manufacturing

On Feb 22 my class mates and I visited Jeff Bohanan at Protomet Precision Manufacturing. Protomet is a world class machine shop where lots of fancy and complex parts are manufactured for a variety of products. Jeff started his career at Y-12 nuclear weapons facility in Oak Ridge. After going through a 2 year rotation program at Y-12, Jeff decided he wanted to go out on his own and build a world class manufacturing company. He and a friend started a two man engineering consulting company. In the beginning the two did a lot of work back for Y-12, the employer they had left to start their company. This helped them stay afloat while they pursued other contracts. An opportunity came up to bid on a Mercedes contract to machine a part for their SUV's seat belt assembly. Only problem was that Jeff didn't have a machine shop. Mercedes needed 1 million parts over 5 years at a target price of $4. Jeff and his partner came up with a cost effective way to manufacture the parts and bid on the contract without disclosing that they didn't have the facilities to machine the parts. They got chosen for the contract and immediately bought and installed a machine to produce the parts. While their machine was being installed they contract manufactured with a few other shops to make prototypes. A week or so after Jeff had ordered his machine for building the parts, Mercedes called and said they had a new cheaper way of making the part and wouldn't need Jeff's help any longer. He was devastated, they had spent everything they had to buy the machine to make the parts. He negotiated with Mercedes to make some of the first parts while they were getting their new process up and running. It turned out that their new process didn't work quite like they thought and Jeff ended up making all 1 million of the parts over a 5 year period. Protomet Precision Manufacturing grew out of that experience. Today Protomet's two biggest industries are homeland security and wakeboard boat parts. They manufacture surveillance camera housings that can read license plates and automatically check them in a database in a fraction of a second. Protomet is also a major manufacturer of what Jeff calls "bling parts" for wakeboard boats. These are typically the polished aluminum logo plates and tower components that may house speakers or wakeboard racks. Jeff's real competitive advantage is his ability to design and help customers redesign things in a way that they can be manufactured cost effectively. He is a big proponent of setting goals and spoke highly of Brian Tracy and his leadership development philosophies. Jeff's final words of advice were the following: "You may think that technology will be your biggest difficulty in entrepreneurship, but people will most certainly be your biggest difficulty". He spoke a lot about how to hire good people and reward them for what they do. He said "The main thing is to have integrity in the process, be very honest and shoot strait with people"

Mark Medley : Control Technology Incorporated

On February 15th we got a chance to visit Mark Medley at his company, Control Technology Incorporated. CTI, not to be confused with the CTI from last week, has been around for a while here in Knoxville. Mark Medley founded two companies in the 70's with a few college friends, one was called 1330 corp and focused on publishing magazines, the other was called computer concepts and was focused on building computer systems to automate manufacturing facilities. Mark worked with the Mayfield milk family to help automate their dairy production facilities with programmable logic controllers. In the 1980's Mark was interested in expanding the business beyond milk production so he decided to buy Mayfields part of Computer Concepts and take the company on his own. Initially Marks company was financed by borrowing money from family and friends and from the bank. Bank loans for start ups are pretty much impossible these days. CTI now makes custom circuit boards and PLC's that go into all kinds of products. CTI has a clean manufacturing facility and some state of the art equipment. It was pretty entertaining to sit and watch a robotic arm place different components on a circuit board. Once all the components are placed, the entire board is soldered at once to fix each component in place. CTI does specialized boards in orders of 50-500, not huge lots of production. This forces them to remain nimble in their operations and create competitive advantage through their customer service and adaptability.