|All in the Family|
|By Nethea Fortney-Rhinehardt|
| You are a key executive reviewing market demographics. You know what your customers are buying and what they’ve bought in the past. But how can this information help you make more intelligent decisions about what they’ll buy next year? |
A state-of-the-art computer program deftly whittles down the raw data into key trends — customer segments, buying patterns, most profitable customers and successful product lines. It even tells you what to offer next year, all other things remaining equal.
But business is anything but static. How do you shift your game plan if the economy goes into recession? What if there is a shortage of raw materials? What if the labor market tightens? How do you adjust production? How do you regroup?
In a sea of swirling business variables, this leading-edge technology can simplify decision-making, even if you’ve already negotiated a contract or bought a new warehouse. This type of program, an optimization tool, considers the shifting variables and actually makes decisions for you. Data mining turns your raw data into knowledge and optimization software translates that knowledge into best practices decisions.
Sounds too good to be true? Not so, according to Matthew Michalewicz, 24, CEO of NuTech Solutions, a Charlotte, N.C.-based firm specializing in data mining and optimization technology.
“Most businesses know that a traditional IT solution purchased today will become an obsolete dinosaur before its installation is even complete,” says Michalewicz. “Even the best software package must undergo immediate upgrades once it is installed. The era of static solutions is drawing to a close and large corporations selling traditional IT packages have their days numbered. IT solutions of the future have to be adaptive. Business software must identify changes in the competitive landscape as soon as they occur and take the measures necessary to maximize performance relative to them. Only then can businesses achieve peak performance.”
“We are using adaptive technologies to determine outcomes in everything from supply chain management to credit scoring to distribution,” he explains. “Our solutions have the flexibility to adjust.”
NuTech Solutions is the creation of Michalewicz, his father Zbigniew, a computer scientist, and Dan Cullen, a top financial consultant. Their adaptive technology is a dizzying world of genetic algorithms, neural networks, evolutionary programming, ant systems, DNA computing, and quantum computing closed to all but few brilliant Ph.D.s.
NuTech already has the market cornered in Ph.D.s. With over 30 top Ph.D.’s on staff and another 30 expected by year-end, NuTech is poised to add more patents and copyrights to its already impressive cache of intellectual property. While Zbigniew insists that computational intelligence isn’t that hard to understand, non-experts need not apply.
“Our technology is based on natural processes,” he says. “In our system, you run artificial evolutionary processes where complex business processes adapt, respond and evolve better solutions without the need for additional programming. With any change in environment, the business process adapts with an optimal solution. It not only make a lot of sense, it will be the new wave of the future for computer applications. You’ve heard of smart cards. Why not smart computers?”
If this all sounds a little far-fetched, consider that it is already a reality. NuTech has amassed a noteworthy client list. Ford Motor Company, for example, tapped NuTech’s technical expertise to optimize the distribution of off-lease vehicles for Ford Credit Company. The annual savings for Ford? Twenty milion dollars.
“It’s living proof that the technology works,” says Matthew. Ford isn’t the only true believer. NuTech’s influence extends to the hallowed halls of government. The U.S. Department of Defense recently asked NuTech to develop an advanced artificial life program that will model the military development of foreign countries. This project will help top defense officials predict future military threats for the United States.
BMW sought out the company to create an advanced modeling system that allows engineers to test new crash zones without building physical prototypes. “Our system has helped shorten the production cycle of cars because they don’t have to build as many prototypes and then crash them to test them,” CEO Michalewicz explains.
The Ministry of Traffic in Rotterdam, The Netherlands turned to NuTech Solutions for an adaptive system for traffic-light control on a real-time basis. NuTech did not disappoint. They developed a computer system that dynamically reacts to time-varying traffic conditions at street intersections to optimize wide-area throughput.
Success is sweet, but Michalewicz does not take his high-profile clientele for granted. “I believe that our clients are critical to our success.”
While his customers are from diverse industry segments, Michalewicz says that clients generally seek the same types of services. “First, they don’t know what their data means. Second, they don’t know how to make good decisions based on their data. Third, their infrastructure doesn’t work.”
While the company’s key offerings are custom data mining and optimization tools, a lesser known but equally important facet is NuTech’s in-house infrastructure arm. “We believe that the network infrastructure powering all of these software developments is just as important as the actual software itself,” he says. “We want to make sure that our clients have the necessary backbone to handle our types of systems.”
On the Acquisition Trail
To that end, NuTech’s earliest acquisitions were LAN Systems Design, a network implementation company and CTHA, a network design company, both based in the Queen City. While the acquisitions first appeared to be a departure from NuTech’s core competency, it is all a part of a master plan.
“The network component is just as critical as the actual software component,” Michalewicz stresses. “And if we can’t develop the proper network infrastructure, we can’t deliver the software part. One comes before the other. From the beginning we wanted to develop everything from start to finish.”
NuTech has moved aggressively on the acquisition front, with four acquisitions already under its belt and a fifth (Dragon Network Corp.) pending in Japan. Shortly after acquiring the Charlotte companies, NuTech added Davis Digital Solutions in Germany and then Topos, based in Warsaw, Poland. Both companies employed scientists specializing in subsets of NuTech’s technology. It’s quite a growth vehicle for a company that is less than two years old, but as Michalewicz points out, it isn’t the size, but the talent acquired that matters.
“Most of our acquisitions were small companies. Some were only five- or six-person firms,” he underlines. “Our key capital component, our key asset is really the people. We have acquired people who are leaders in these technologies and from there we develop products.”
NuTech’s team of experts also brings a wealth of industry contacts, so much so that nearly all of the company’s clients come through word of mouth. The company has had little need to advertise thus far, and its intellectual might has instant credibility all over the world.
With over 30 software products currently available and more in the works, there really isn’t a one-size-fits-all solution. Michalewicz, though, envisions a day when NuTech solutions are more readily available commercially. “My goal,” he shares, “is to shrink-wrap our products so people can use them. I’d love to see a resume that says, ‘I’m proficient in Excel, SAS and NuTech Optimization and Data Mining tools.’ ”
The Power of Three
Considering how far NuTech has come in such a short time, Matthew’s dream just might come to fruition. Just a few years ago, he was a student at UNC Charlotte working toward a finance degree. His father, Zbigniew, was, until recently, head of UNC Charlotte’s computer science department, a well-known and respected scientist in his field. Dan Cullen, a family friend, was a successful money manager overseeing $100 million in assets.
After graduating near the top of his class, Michalewicz accepted a position at Ernst & Young. But he found that his entrepreneurial spirit wasn’t cut out for consulting. “Ernst & Young is a great company,” he says, “but I felt really limited in my job there. It just wasn’t a good fit.”
Instead, he went to work at Dan Cullen’s independent firm, Cullen Financial Group. As Michalewicz studied market trends and emerging technology companies, he realized that his father was sitting on a gold mine. His vision, drive and creativity, coupled with his father’s technology and Cullen’s fundraising prowess could be a winning combination for something big. In June 1999, the threesome set up shop.
“This [NuTech] couldn’t have happened without each one of the three of us,” Matthew Michalewicz says. “Each of us provided a key component to getting this company off the ground.” Investors were inclined to agree. NuTech raised at least $5 million last year and is in the midst of another round of financing. Although Michalewicz is mum about revenue projections, previous published reports have placed figures anywhere from $20 to $90 million.
And he isn’t all that concerned about competiton. Michalewicz insists that competitors are few and far between in this emerging industry. “There may be a consulting company here and there, but adaptive technology companies tend to be small and fragmented,” he says. And with NuTech buying up what they believe are the best firms, barriers to entry are high. “There are very few companies that have any expertise in the areas that we’re pioneering. We are on the leading edge.”
From Communism to Capitalism
The Michalewicz family odyssey to NuTech Solutions is a story spanning World War II and the Cold War. The elder Michalewicz explains that his grandfather actually emigrated to the U.S. in 1910, settling in the Chicago area. A daughter returned to Poland in 1939 for a visit, only to be trapped in the country during World War II. The family remained separated for decades.
This daughter, Zbigniew’s mother, married and raised her family in Poland. Zbigniew graduated from the University of Warsaw with a master’s degree in applied mathematics and went on to receive his Ph.D. from the Polish Academy of Science. But by 1982, he was weary of communism. It was the height of the Solidarity movement, and he yearned for a better life for his wife and young son, Matthew.
“It was a most unpleasant time,” he remembers. “We just had to move somewhere.”
Somewhere turned out to be a world away in Wellington, New Zealand, where Zbigniew accepted a university post. In 1988, he set his sights on the United States. After all, he had family in Chicago. The Michalewicz family came to Charlotte in 1989 for Zbigniew’s new job in the computer science department at UNC Charlotte. Twelve years later he is chief scientist in million-dollar company with his son at the helm.
Even he marvels at how far they have come. “None of us ever dreamed it would have turned out like this.”
NuTech’s University-area facility is headquarters to the company, which also has offices in Boston, Chicago, Denver, Colo., Dortmund, Germany and Warsaw, Poland. Soon Matthew Michalewicz expects to add Tokyo, Japan. The firm has swelled from the three founders to 133 employees worldwide. Despite his young age, Michalewicz is a driving force behind the company’s success, and he anticipates only good things to come.
“NuTech is at the beginning of an emerging industry. We’re not entering an industry five to ten years down the road where there are a lot of established players. We can be the first. We have the opportunity to dominate this industry.”
|Nethea Fortney-Rhinehardt is a Charlotte based freelance writer.||