Terry Douglass has been a long time mentor of our professor, Dr. Martin. He holds a Ph. D. in Electrical Engineering from the University of Tennessee. While working at Oak Ridge National Laboratory, he helped develop a technology that changed health care call the PET Scan or, Positron Emission Tomography. He founded CTI Molecular Imaging and acted as Chairman and CEO until they were acquired by Siemens in 2005. He now runs Provision Foundation which manages a number of profit and nonprofit healthcare related ministries. Mr. Douglas has been an extremely successful entrepreneur and had some very interesting experiences to share with our class.
The first experience he shared with us was when CTI was able to get approval to commercially use PET Scans in 1997. “In healthcare”, he told us, “there is no such thing as free enterprise.” CTI tried a number of ways to get the technology approved through the EPA and other sources and was never successful. After talking to a friend who worked in government, he tried to get the technology approved legislatively instead of administratively. It was finally passed by congress, tacked onto a bill that was approved in 1997. After this their revenues skyrocketed and many different companies were interested in acquiring CTI, including Siemens. They decided not to sell but instead held an IPO in 2002. I thought this was very interesting because it a real example that there are, as the common phrase goes, “two ways to skin a cat.” It also showed Mr. Douglass’s impressive drive to run a successful business because he never gave up in seeking getting the technology is business hinged on approved for public use.
This brings me to his next experience, running a public company. Terry Douglass is the first entrepreneur we have talked to that has acted as CEO in a public company, he referred to them as “the dark days.” There are many differences in running a public and private company, the first is that you have to start thinking quarter to quarter instead of long term. This was one of Mr. Douglass’s mistakes. He had always looked 5 to 10 years down the road to see what was best for his company, but once you go public, you have to try and act for the shareholders and make sure your quarterly statements are sound. He missed his mark on several quarterly projections and their stock fell dramatically from 2002 to 2004. Eventually, he learned a few tricks of the trade by projecting on the low side so that the company can exceed expectations. The stock started growing and was eventually sold to Siemens for about 3 dollars a share more than what is was originally priced at.
During Mr. Douglass’s stint at CTI, he and a few of the other founders continually put stock of CTI in a trust which now funds Provision Foundation. The main purpose of Provision Foundation is to provide seed Monday and administrative support such as accounting and technology support to small businesses across the southeast, the most notable one being East Tennessee Health Center. He made a point that Provision makes sure to identify a CEO or entrepreneur and let them run their company as they feel called to do.
Terry Douglass is truly a great man who feels called to service. He has helped many, many people, both here in the southeast and also abroad in places such as Haiti. He left us with a few points that, “no matter where you are in your career, there is always the opportunity to support others. Many people think that service only comes from NGO’s and ministries but in fact, everyone has the capability to serve others.”
Monday, March 29, 2010
Thursday, March 4, 2010
Vig Sherrill and Aldis Inc.
Vig Sherrill is the CEO of Aldis Inc. which commercializes and sells patent-pending, efficient traffic and energy management technology and services to municipal partners. They have a product line called GridSmart™ which is a significant advance in intelligent traffic management. Using an ultra wide angle lens with a horizon-to-horizon view in concert with proprietary software, GridSmart™ utilizes advanced vision processing science and the ability to apply logic to what is seen in the intersection and for several hundred feet in all directions around the intersection. Before starting Aldis, Vig Sherrill has been a serial entrepreneur heading Flextronics Semiconductor and ASIC International.
Aldis is still a Venture Capital backed company and has yet to post positive cash flows yet. However, the fact that they are VC based shows that Aldis shows strong promise for large profits in the future. A large advantage Aldis has over its competitors is that their system is entirely software based which means the hardware it runs off of, a PC, will inherently get cheaper and faster over time. Aldis is leveraging off of other proven technologies that other companies do the engineering on. Because Vig started the company in 2006, which is relatively late compared to his competitors, he is not stuck trying to use or upgrade old hardware but instead has leverage off of a proven technology, the PC, that other companies do the engineering on to improve.
Vig also shared with us some of the financial planning of Aldis. He explained how it is important to sell to the engineer who will be using the product who will then convince the CFO who will ultimately write the check. This was a reoccurring theme, that the ultimate user is not necessarily the person who writes the check. Another example of this is the fact that the beneficiaries of the traffic control system, the citizens, will not be the ones writing the check for the GridSmart™ system but instead the city will. Vig also shared that because there are only a limited number of intersections to place their system in, about 350,000 total in the US, even if they sold a system at every intersection, eventually, their income stream would stop. Aldis has reacted by selling in emerging markets such as China which plans to build about 200 cities larger than Knoxville in the next 25 years.
An additional opportunity that spawned from the GridSmart™ System is that they could sell the data collected by the systems to companies such as Walmart or Exxon who would like to know traffic patterns in different areas to help plan on where to build new stores and stations. This brings me to another point of advice Vig shared with us. That is, he doesn’t know a single entrepreneur who is making money on what they initially set out to make money on. Therefore, it is important to recognize that as an entrepreneur there will be a lot of left turns, and that success is dependent on knowing when and when not to make them. As Dr. Martin likes to say, “the only way to get experience is by bad judgment,” so don’t be discouraged when you make mistakes.
Vig is a very energetic man and obviously loves his work. He gave us some very insightful knowledge on owning your own business and on Venture Capital funding. A few stats he gave us which I found particularly interesting were that about 1 in 1000 companies that ask for VC funding actually get funded and of those, only about 1 in 5 are successful. Additionally, since 9/11, not a single venture capital company has made money. Vig shared that venture capitalists are not the bad guys they are made out to be but that it is important to know that whoever controls the money, ultimately controls the business. If you end up seeking VC money, you must be willing to let go of the control of your company.
Lastly, the story from Vig that most sticks in my mind is when one of Vig’s friends asked him what it was like not to have a boss. Vig replied that when you have your own company, every single customer who walks through the door is your boss. He takes his job very personally and wants to his company to reflect positively on himself and therefore he makes sure to always please his customers. It is the old adage, “the customer is always right”. This is what I believe to be Vig’s greatest success as a leader. He is a leader not that takes total control and does what he wants, but a leader that serves and does what his customers want or need.
Aldis is still a Venture Capital backed company and has yet to post positive cash flows yet. However, the fact that they are VC based shows that Aldis shows strong promise for large profits in the future. A large advantage Aldis has over its competitors is that their system is entirely software based which means the hardware it runs off of, a PC, will inherently get cheaper and faster over time. Aldis is leveraging off of other proven technologies that other companies do the engineering on. Because Vig started the company in 2006, which is relatively late compared to his competitors, he is not stuck trying to use or upgrade old hardware but instead has leverage off of a proven technology, the PC, that other companies do the engineering on to improve.
Vig also shared with us some of the financial planning of Aldis. He explained how it is important to sell to the engineer who will be using the product who will then convince the CFO who will ultimately write the check. This was a reoccurring theme, that the ultimate user is not necessarily the person who writes the check. Another example of this is the fact that the beneficiaries of the traffic control system, the citizens, will not be the ones writing the check for the GridSmart™ system but instead the city will. Vig also shared that because there are only a limited number of intersections to place their system in, about 350,000 total in the US, even if they sold a system at every intersection, eventually, their income stream would stop. Aldis has reacted by selling in emerging markets such as China which plans to build about 200 cities larger than Knoxville in the next 25 years.
An additional opportunity that spawned from the GridSmart™ System is that they could sell the data collected by the systems to companies such as Walmart or Exxon who would like to know traffic patterns in different areas to help plan on where to build new stores and stations. This brings me to another point of advice Vig shared with us. That is, he doesn’t know a single entrepreneur who is making money on what they initially set out to make money on. Therefore, it is important to recognize that as an entrepreneur there will be a lot of left turns, and that success is dependent on knowing when and when not to make them. As Dr. Martin likes to say, “the only way to get experience is by bad judgment,” so don’t be discouraged when you make mistakes.
Vig is a very energetic man and obviously loves his work. He gave us some very insightful knowledge on owning your own business and on Venture Capital funding. A few stats he gave us which I found particularly interesting were that about 1 in 1000 companies that ask for VC funding actually get funded and of those, only about 1 in 5 are successful. Additionally, since 9/11, not a single venture capital company has made money. Vig shared that venture capitalists are not the bad guys they are made out to be but that it is important to know that whoever controls the money, ultimately controls the business. If you end up seeking VC money, you must be willing to let go of the control of your company.
Lastly, the story from Vig that most sticks in my mind is when one of Vig’s friends asked him what it was like not to have a boss. Vig replied that when you have your own company, every single customer who walks through the door is your boss. He takes his job very personally and wants to his company to reflect positively on himself and therefore he makes sure to always please his customers. It is the old adage, “the customer is always right”. This is what I believe to be Vig’s greatest success as a leader. He is a leader not that takes total control and does what he wants, but a leader that serves and does what his customers want or need.
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