Nucsafe’s 14-year journey chronicled
By Tom Ballard, Director of Innovation and Entrepreneurial Initiatives, Pershing Yoakley & Associates, P.C.
The Oak Ridge community has a rich heritage of companies focused on instrumentation, including start-ups in the nuclear safeguards and radiation detection space. One of those is Nucsafe, a company founded in April 1999 when it licensed lithium glass technology from Pacific Northwest National Laboratory.
We recently sat down with three of the company’s principals to better understand their challenging 14-year journey that was impacted by events ranging from simultaneous airline hijackings on September 11, 2001 to the extended global economic downturn. As with many small entrepreneurial businesses, Nucsafe has had both good times and difficult times along the way.
It appears the leadership team has found a good mix today with an international footprint and a focus on detection systems for nuclear security markets including border, port security, mobile and aerial monitoring, and specialized portable applications. The R&D is done in Oak Ridge, while manufacturing occurs in a plant in Corbin, KY.
We talked with two individuals who were at Nucsafe on the first day – Chief Executive Officer Rick Seymour and President and Chief Operating Officer Lester Sideropoulos – plus Bill Richardson, Chief Commercial Officer, who joined the Nucsafe team in 2003. The three, however, had worked together off and on for decades in other Oak Ridge companies such as ORTEC and Tennelec/Nucleus.
Like most start-ups that license technology, there’s a good deal to learn and considerable investment that is required, particularly with a technology that was classified until the early 1990s. Seymour reflected when he said that “labs don’t always tell you the bad stuff, in part because they don’t always know.”
Just a little over two years after founding Nucsafe, Seymour and Sideropoulos experienced the first of several challenges. “After 9-11, we fought a very long and uphill battle over 10 years to improve the glass,” Seymour said.
During the period, he said the company substantially improved the technical performance of the licensed technology to meet the changing market requirements. For one technical requirement, Nucsafe was able to improve performance for one specification by a factor of 10,000.
Less than two months later, with much of the world still reeling from the terrorist attacks in the U.S., Nucsafe faced a real challenge – deliver a product to a British governmental authority – within four months.
“We took the contract with some degree of risk,” Seymour said, but delivered the product on time and within budget. Later, as we improved the product technologically, Nucsafe upgraded the units already installed in England at no cost to the customer.
This attention to customer service ensured a strong and long-standing customer relationship to which Seymour and Sideropoulos credit the company’s win of a $35 million IDIQ with the British government in 2005, four years later.
As if improving their technology was not enough, Nucsafe also had to “weather the 2008 economic global crisis,” as Sideropoulos described it. Contracts with both government agencies and large defense contractors were often delayed. For large companies, Seymour noted that a year or two can be dealt with in their larger economic budgets, but for small companies like Nucsafe, cash flow is very critical.
Along the way, the now 14-year old company has had to look for ways to recover through adverse financial conditions. Seymour said that 80 percent of its revenues in 2005-06 came from two major customers. Today, Nucsafe’s customer base ranges at any one time between 30 and 40, a much more manageable risk position.
We’ll review more about Nucsafe’s evolution in the next article in this series.