When Bill Clough took the reigns, CUI Global Inc. was $41.5M in debt. Today, it’s worth over $100M and growing. Take notice, fellow oil executives.
Our guest today is Bill Clough, President & CEO, at CUI Global Inc.
Bill is not your typical oilfield CEO. After 14 years serving as a Swat Team leader in his hometown of Oakland, California, he was recruited into the Federal Government’s Air Patrol unit. When the promised 3-week deployments extended into months, he moved into litigation and operated a successful law firm with offices in Oakland, Los Angeles, and Hawaii for 17 years.
His move into entrepreneurship, and subsequently oil and gas came by accident. When a business partner accidentally almost cost him $2 million.
His experience in leadership making precise tactical decisions in crisis times clearly served him well, as he turned a company with over $40M in debt into a cashflow positive $100M — and growing — enterprise.
Bill stopped by Tribe Rocket Inc.’s studio in the Museum District in Houston, Texas on his way back to the city he now calls home; Portland, Oregon.
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#064.5.1 Oil and Gas This Week Podcast: How Strong Oil Executives Lead in Crisis
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James: I’m James Hahn II, and you’re listening to the Oil and Gas This Week Podcast, Brought To You By Red Wing. This is Episode 64.5.1. .5 episodes are my chance to speak with entrepreneurs, executives, and thought leaders from inside and outside the industry. To hear their stories. What inspires their work. What culture drives their company. What innovations they’re bringing to the oilfield.
My guest today is Bill Clough, President and CEO at CUI Global Inc. Bill is not your typical oilfields CEO. After 14 years serving as a Swat Team leader in his hometown of Oakland, California, he was recruited into the Federal Government’s Air Patrol unit. When the promised three-week deployments extended into months, he moved into litigation to spend more time with his wife and new baby daughter. Over the course of 17 years, he grew his law firm into a successful practice with offices in Oakland, Los Angeles and Hawaii.
Bill stopped by in Tribe Rocket Inc. studio in the Museum District in Houston, Texas on his way back to the city he now calls home in Portland, Oregon.
Bill: I’m from Oakland, California, born and raised.
Bill: Yeah. Oaktown.
James: Did you go to college out in California?
Bill: I did. I went to the University of San Francisco, and then graduated with a law degree from Hastings College of Law also in San Francisco.
James: That would explain why you would also like to be a litigator possibly.
Bill: I actually was a litigator for almost 17 years. I had a very successful California practice.
James: How did you become an entrepreneur?
Bill: It was through an accident actually. I was at the end of my legal career getting ready to retire. I’ve made an investment with a friend who had introduced me to a number of investments and frankly done pretty well. I had given him a couple $2 million to put into a company that he said was sure to succeed. It was a pre-revenue company, this is back in 2006, that had what appeared to be a very exciting thermal management technology.
As I was getting to retire and planning on using that $2 million as part of my retirement he came to me in a panic explaining that the people we had invested in were great guys but had no idea how to run a business, and that if we didn’t get more involved we would lose my money.
That was not part of my retirement plan. So I came into this company originally as General Counsel. We ended up bringing in what we thought would be a very competent individual to run the company, an ex-Nike executive, who came in and actually started spending more money than we were making. At the time that we replaced him he was burning through about $800,000 a month in burn rate.
I came in as acting CEO when he was removed. That was in late 2007. I’ve run the company ever since. When I came into the company it was doing about $19 million a year in revenue and had $41.5 million in debt.
James: Are we talking about CUI Global right now?
Bill: The precursor company was called Waytronics, but it became CUI Global when we acquired the electronics portion of the company, CUI in Portland, Oregon. We took that company though in eight years which I’m very proud of. It wasn’t me. It was the entire team. We took that company from what was effectively bankrupt in 2008 to today approaching $90 million in revenue, effectively no debt. We have $7 million cash in the bank. We just signed a contract with the Italians that’s going to be worth somewhere between $60 and $100 million over the next three years. So it’s been quite a turnaround.
James: I mentioned before we got on the air here about NASDAQ, I think it was a CEO Signature Series that they were interviewing you. There was still a heck of a lot of debt on the books. How much debt was on the books when you came in?
Bill: It was $41.5 million in debt. It was amazing actually. The timing could not have been worse. It was an interesting time. We actually acquired the company and got firmly involved in May of 2008. At that point, like I said, we were doing about $19 million a year in revenue, had $41.5 million in debt, but we had a plan. In November of 2008 we were going to go out to the equity markets, race a bunch of capital and pay off all the debt. Unfortunately, if you recall, in September of 2008 Lehman Brothers imploded, and there were no equity markets to go to. In fact there was nowhere to go.
James: That was right around the end of my mortgage banking. I’m very familiar.
Bill: Yeah. You’re very familiar with it. When I was an attorney I represented a lot of mortgage bankers. There were fewer after that 2008 debacle. If we had to do it all over again, I should’ve filed bankruptcy and walked away. I was not prepared to walk away from my investment.
So I put together a team that I thought I could depend on, and in fact I could depend on. We really realigned the company, verticalized the sales group, streamline the company, and over the next four or five years really changed the way the company worked and made it profitable.
James: Let me also backtrack a little bit. In order to be able to lead an organization through such a difficult time like that you must have had some leadership under difficult times in the past. I believe you have a military background. Is that right?
Bill: I was a police officer for 16 years. So it’s quasi-military, if you will. My experience really came from early on in my career. I was an early member of Special Weapons and Tactical Group out of San Francisco Bay Area Department. We developed really small unit tactics. That experience of approximately 10 years as a SWAT fire team leader and then a SWAT commander and then became a SWAT commander of a division in the Honolulu Police Department in the early ‘80s, that experience really taught me how to manage people under crisis circumstances.
When you have somebody shooting at you, you have to be able to depend on the team you’re working with. It has to be a dependency that you see in few other circumstances. So to build that team would the cohesive nature and the need for trust and dependent on each team member it taught me how to build small teams and how those small teams could interact. I’ve applied that throughout my career. I applied it in my law firm and I’ve certainly applied it over my years with CUI Global.
James: You were effectively fighting the original Cocaine Cowboys out there in Honolulu and San Francisco.
Bill: Honolulu was more ice than anything else. In the San Francisco Bay Area it was really methamphetamine. We had a huge trade of methamphetamine back then, predominately Hells Angels but others as well. So it was an interesting time to be a police officer.
James: At a certain point you said, “All right. I’m going to go become a lawyer because I’m tired of being shot at.”
Bill: It was a little more complicated than that. I was working, as I mentioned, as a SWAT division commander in Honolulu at the time that TWA Flight 847 was hijacked to Beirut. People may remember the pictures at the time and the pictures you see on internet of the captain waving at the window of the cabin with a gun being held to his head.
Following that, Reagan who was the president at the time reinstituted the Air Marshal Program except instead of being based around Cuban hijackings it was going to be based internationally. He went out and sought predominantly very high profile, very well-trained experienced tactical team members from myself, others from Dallas, Texas, from New York City, from really all major police departments you can imagine. He recruited a very tight-knit core of people who became the Air Marshal Program in the early ‘80s.
I personally was assigned out of Frankfurt West Germany, flew all over the world from Frankfurt, but there were teams of us that would fly on certain aircraft. We were told when we originally were deployed that it would be a six-week deployment and then we would be in for six weeks, and that’s how it would work. I had a two-year-old daughter at the time and a four-year-old son. My first deployment was seven months. I came back for three weeks, went out for another six months —
James: The government and mission creep, are you telling me it never happens?
Bill: The government and mission creep. So I came back to second deployment. My wife at the time said, “I can’t really live like this.” I said, “Hon, think of it this way. It’s like you married somebody in the military. We’ll be out for six months, in for six months.” She said, “Number one, I didn’t marry somebody in the military. Number two, you’re not in for six months. You’re out for six months, in for three weeks and back out.” So I had to make a decision at that point. Was my globetrotting career worth more to me than my family? It was not.
I’d always thought about going to law school. I applied to a number of different law schools and was accepted by many of them. The one that I chose was Hastings. I think it was a good choice. I ended up graduating there.
James: Hastings is —
Bill: In San Francisco. It’s a UC campus. I graduated in 1990, opened my own law firm in 1991, and became very successful having offices in LA, San Francisco and Honolulu for about 17 years.
James: What kind of cases were you working in those 17 years?
Bill: I did almost all plaintiffs, personal injury and business litigation. I represented some very large movie studios but in business transaction, not in creative transactions. I represented, for example, a company called Infodisc out of Taiwan. It was one of the largest replicators of DVD discs in the world. We worked for 20th Century Fox, for MGM, for Universal.
And then I represented a lot of complex personal injury cases. I represented, for example, deep-sea undersea divers largely out of Santa Barbara but, really, all over the world, developed an expertise in that, their Jones Act Seaman, and so it’s a very specialized area of the law. I actually argued in front of the US Supreme Court in a Jones Act case. It was something that was quite exciting and very fulfilling and, frankly, quite profitable. It was something I enjoyed a lot.
James: We know that the first transition was because of the wife, if you will. This one that you went about, you were basically deciding to retire, and then kind of got your money wrapped up in something, and you’ve been here ever since.
Bill: Yeah. That’s pretty much the story. I tell people this all the time. I spent four years as an undercover narcotics officer when I was very young, and so I acquired the ability to buy and sell narcotics which is really very similar to buy and selling stock in the stock exchange. It’s the same motivation, and that’s fear and greed, fear of not getting that deal that’s the next Microsoft, and greed that you get every penny that you can out of every investment. I tell people this. My legal career, my police career, my career as an undercover narcotics officer, all have prepared me to be a very, very capable CEO of a public corporation, and that’s what I’m doing today.
James: One thing that really jumped out to me in all the interviews and everything that I looked at to prepare for this is clearly you’re not driven by that fear and that greed. Company culture is something that’s very important to you. Collaboration among teams is especially something very important to you. Can you talk to us a little bit about that?
Bill: Yeah. Actually we were talking before. I think one of the cornerstones of my management style is to push down and delegate authority. I want to make the people who work with me better because I always felt that if I make them better, if I make them shine, then that makes me look good as well. I think that to be a really good, capable manager you have to make sure that the people you hire are, in some sense, better than you.
People are going to come up through the ranks who can in fact replace you if push comes to shove. I’ve always prided myself on doing that, on bringing people along who I felt were capable, bright, enthusiastic. I have a team now. They’re predominantly young men and women who are in their late 30s, maybe some as old as 40, but predominantly young men and women who are very enthusiastic, very talented and, frankly, bring a whole different form of enthusiasm to the table. Those are the kinds of people that I think are going to be running the companies in the future. For me, I want to surround myself with those kinds of people and give them the authority to make decisions, to push down that authority making process.
We talked about it, the ex-commander of the Special Operations Group in Afghanistan, a general by the name of McChrystal, wrote a book called Team of Teams. He, in large part, captures the way I feel management should be done, and that is to push down authority so that the lower and lower you can get delegated authority the more everybody can be on the same page working towards the same mission, the more effective and successful you’ll be.
James: First of all, testify. Amen. I completely agree on everything you say. It’s one thing to say it though. How do you create buy-in across your organization and make sure that each person comes on board? Because as much as I guess top one presenters, top three presenters in terms of performance, people that are always grinding, people that are always trying to push further and further, it’s very easy for people like us, I will put myself in that category, that strive for that egolessness, that strive for that level fiveness, if you will, of putting the best for the company above our ego. How are you able to nurture that within your team?
Bill: That’s twofold. One is it’s picking the right people. You have to be very careful about who you choose. There has to be a great deal of trust and you have to pick people who you think can do the job. You’re not always right. Frankly, one of the other things that you have to be able to do is recognize someone who cannot do the job. One of the tough parts of being a supervisor is telling that person that they just can’t be here or they can’t be in that role. Once you identify the people that you can trust and that you think have the capability to do what you want them to do you’ve got to give them the authority and the power to do that. It’s a lot of things.
One of it has to do with self-confidence. If you are not confident in your own self you will never delegate that authority. I find that one of the biggest problems many leaders of organizations have is that their own lack of confidence doesn’t allow them to delegate. They really truly believe they’re the only ones who can do the job.
James: Superhero complex.
Bill: Exactly right. They’re the only ones who can do the job or they’re the only ones capable of doing it the right way. It’s just not true. There are many people who are very, very capable. My style at least has been to surround myself with people who I believe are very capable, and then allow them to blossom, to really develop into leaders. Again, every time I’ve done that it’s worked out well for me because that person has become someone I can depend on, I can trust, and generally speaking, that’s someone who has become a much better executive than if I had simply told them how to do or what to do what they were doing.
James: It’s ultimately the Henry Ford model.
Bill: It is to some extent. I’m not really familiar with Henry Ford’s career but I know that one of his philosophies had to do with the worker level person who really only needed to know a small portion of what they were doing and do it over and over again. I don’t believe in that. I think it’s very important that everyone be appreciative of the whole, that everyone knows what the target of the organization is, and that we all pull towards that target. If you don’t do that, if you have, in essence, the assembly mind or assembly line mantra, if you will, where everyone has a component part and all they need to know about is what they do, I don’t think that works as well as having a group of people who are all pulling for the same objective and doing it in an intelligent bright way.
James: Each of us need all of us and all of us need each of us.
Bill: That is actually a perfect way to put it.
James: That is Mr. Jim Rohn. You got to give him full credit. I really appreciate you taking the time to give us the full background on where you come from and your entrepreneurial journey thus far. Let’s get into CUI Global today because I know that you have some very interesting technology that you’re rolling out. You’re going up against some pretty large competitors. I hate the word disruptive but join me in laughing at that. It’s one word that comes to mind when I see what you’re up. So give us the 50,000 foot view of what you’re up to today.
Bill: Sure. CUI Global is a publicly traded company. We are on NASDAQ. The ticker symbol is CUI. We have two business units. One of which is a relatively mundane commodities-driven business that is really an electronics distribution business. For years that’s what we originally bought. That company has paid the bills. It’s not very sexy and it’s not very exciting but it’s quite probable. It tends to grow 10% to 12%, sometimes 14% year over year. So it’s a nice little business.
James: What’s the day to day execution of that business exactly? What do they do?
Bill: Sure. They really deliver component electronics into the electronics industry, mostly power supplies but 60% power supplies. Every kind of component you can possibly imagine. We have 20,000 separate schools. We service 74,000 customers. So it’s a broad product base with a broad customer base which gives us some protection from economic downturns. It is, like I say, not really the growth engine and certainly not the gas portion of the company that we feel is much more exciting which is the second business unit.
That second business unit is under the name of Orbital Gas Systems. We have a North American and a UK operation. It’s a company that’s designed to provide, in essence, integration work for the gas industry. In the UK, as an example, we provide integration to the largest utility companies in Great Britain including National Grid, wells in West Scotia, all of the big midstream carriers, transmission companies primarily although some distribution.
What we do is we provide everything from small metering skids that would be working out in the remote areas of Ireland or Scotland, to large biomethane terminals that would put biomethane gas from large farm cooperatives or breweries into the National Grid system. We have mirrored that in the US in a much smaller phase if you look at what we do in the UK. That’s probably almost a $30 million a year business in the US. We just started the operation last year, January 5, 2015. It did about $4 million last year. We expect to do $6 to $8 million this year. In both cases it’s an integration-based company.
On top of that what we’ve done is really laid over a product sales company that is marketing and productizing three very exciting technologies in the gas industry, two of which are truly industry shifting, and one of which we believe has been quite popular in Europe and will be quite popular here. That’s where the real growth in this company is, is in that energy division or gas division.
James: What are those three products then?
Bill: That one that is just now starting to hit the market in Europe is a product called IRIS which is an advanced information telemetry system. Basically it remotely controls the pipeline. We’re selling it now to National Grid. It is really new to the market though. Probably 18 months to two years away from really dramatic growth.
The really two growth areas that we’ve been working on for the last almost five years is the gas PT analyzer which is very quick, very accurate method of measuring gas quality in the pipeline, and the associated VE technology which is a probe technology which allows us to put a penetration into the pipeline no matter what the size of the pipeline and no matter what the pressure of the pipeline. We were able to put that probe in with no effect from the vortex which basically tends to weaken a probe by applying back and forth pressure on it. We’ve designed a probe that eliminates that vortex thus VE technology, Vortex Elimination, which allows us to put probe sampling systems, thermal wells into the pipeline without any of the issues that vibration generally causes. We don’t have any vibration.
James: What’s the outcome you’re looking for when you’re doing that probe?
Bill: The outcome is, number one, eliminating the need to change the probes every year or two years otherwise they break off, and also it’s a very quick, very clean method of sampling the gas. Unlike traditional sampling systems that take a large amount of gas up through a very large nozzle that needs considerable amount of filtration and tends to obscure the ability to really detect trace elements, our probes bring a very small amount of gas from the center of the pipeline and can deliver that gas in less than two seconds to an analyzer outside the pipeline which these gas doesn’t have to be filtered because it’s such a small amount, and the trace elements are very easy to detect, trace elements like mercury, moisture, H2S, elements that can be critical to a refinery or to a LNG terminal which are very difficult, if not, impossible to detect using standard sampling systems.
James: I know that we have a lot of petroleum engineering students, a lot of neophytes like myself, that listen to this show. Can you break it down a little bit further in terms of what is the value of getting that level of monitoring? You want to make sure you’re getting quality gas from the terminals that you’re allowing — how does this work?
Bill: Those are two questions. The sampling is one issue which we talked briefly. What you’re talking about though is the gas PT analyzer. Historically, for the last 60 years, gas has been measured, quality wise, by the same technology. It’s never changed. You can put chrome on it. You can make it smaller. You can make a digital on analog but it’s still the same device. It’s called the gas chromatograph. That’s how the gas companies monitor the quality of gas.
That’s so important to them because, think about it, billing, which is the most important thing gas companies do, is comprised of British thermal units. You don’t bill gas like you bill water. It’s not how much gas you get. You bill gas more like how you bill electricity. It’s how much energy you get. That energy is two components. One is volume, how much gas you get. The other, the denominator, if you will, is energy content, the calorific value of that gas.
Currently, today, to measure the calorific value is a 30-minute process. What you do is you take the gas out of the pipeline, you decompress it using a gas conditioning unit that then transmits to a gas chronograph that takes 20 minutes to analyze it, gives exact chemical composition of the gas to the operator who then infers the calorific value. Not only is gas chromatograph expensive, about $250,000 installed, and expensive to operate, about $13,000 a year, it requires intense maintenance. It has to be calibrated two or three times a week. It requires carrier gas, calibration gas. And after all of that, it’s terribly inaccurate because it’s taking 30 minutes to analyze gas which is traveling down the pipeline about 60 miles an hour, which means when you finally know what the gas is that you’re analyzing it’s 30 miles down the strain. And you got to relate it back to a gas flow meter that operates on a second by second basis.
Our device does this: It allows the operator to pull the gas directly out of the pipeline and allows that operator to receive an accurate measurement of the calorific value in less than five seconds, so almost real time. In fact for some of the applications we’ve gotten it down to under three seconds. It’s literally almost real time analysis of the gas that allows you to be very accurate when you put that denominator, that CV, over that numerator, the volume of the gas. That’s number one.
Number two is our device cost not $250,000 and six weeks to install. It’s $55,000 and installs in less than 90 minutes. It requires no carrier gas. It requires no maintenance whatsoever. In fact we have certain units that have been out in the field for as much as 12 and 13 years that have never required a single bit of maintenance and are still error-free. So I can tell you with great confidence, it’s a device that will revolutionize the way the gas is measured simply because it’s cheaper, faster and much more accurate than what’s available.
The problem, and you’re going to say what I said when I first got this technology, why aren’t people beating a path to your door trying to buy this device.
James: The problem is that you’re trying to get people who have done it the one way always. This is how it works. We’ve done it this way forever, even though they might save how many thousands of man hours and how many thousands of dollars. You’re dealing with an industry of technological laggards that are slow to move. There are several reasons for it. One of the biggest reasons is if people make mistakes in this industry, people die. That is a big problem. I just think that maybe the age of some of the decision makers probably plays into it as well.
Bill: You are definitely in the industry, I can tell you right now. I can’t tell you how many times I’ve sat across the table from an engineer holding my technology saying, “Wow! This sounds great. It’s fantastic. But I have to tell you something. No one’s ever been fired for buying a gas chromatograph.”
James: Yeah. It’s the old IDM line, right? Nobody has ever gotten fired for buying IBM.
Bill: That’s exactly right. It’s interesting because it’s inertia that’s been difficult to overcome. Frankly, this last big contract that we signed with the Italians I think will help us dramatically to overcome that inertia because they have become the first pipeline company that has broadly adapted the technology. We’ve delivered 150 units of them so far. The total deployment is over 7,000 units. I think we will show people just exactly what happens when you really do know what the asset is, what the value that gas is in the pipeline.
James: Just to clarify. The product we’ve been talking about this whole time, is it the Probe?
Bill: No. This is the analyzer.
James: Is it the IRIS?
Bill: No. The gas PT.
James: Then what is the IRIS advanced PT correct party than what is the Iris advanced info telemetry? Give me a rundown on that quickly.
Bill: It’s simply a method of controlling the pipeline that’s quite different. We have a great relationship in the UK with National Grid. They came to us about four years ago and said, “Look. What we have today is archaic. We rent IT technology from a third party vendor who allows us to monitor our own stations with their, in essence, leased equipment.” What happens when something goes wrong at a station, there’s an alarm that rings in Warwick which is where the head of the system sits, he sits in front of a console that has the entire system on it. As you may or may not know, the alarms on a system that big are very complicated because what you don’t want is simply a red cascade of alarms so that the guy ends up with a board full of alarms and has no idea how to respond. So filtering system is quite significant.
What happens is a fault will go off at a remote location. He’ll get an alarm at that location. What happens now in US all over is he will pick up the phone, it could be 1: 00 in the afternoon or 1: 00 in the morning, he’ll pick up the phone, call the technician who’s close to that location and say, “Look. I’ve got a fault at station 40. Go out there and find out what’s going on.” That technician will get in his car or truck, he’ll drive out to that location, he’ll punch in a code to what is a very archaic and nondynamic, almost a DOS style tech system which will tell him alarm at valve 17. He’ll take his toolbox, he’ll walk out to valve 17, he’ll hope he has the spare part, he’ll take it apart and hope he’s able to fix it really not knowing what he’s looking for until he gets out there.
What our system does is much more dynamic. It works this way. Today in the UK on 105 locations, if that same technician gets that same call at 1: 00 in the morning telling him that there’s a problem at station 40, if station 40 has one of our IRIS devices he can get on his laptop, on his smart phone, on his iPad, he can punch in a code and get a web-based schematic of what is going on at that location. He can actually tap on one of the bowties which represents a valve or a device that represents, let’s say, metering station, he can pop it up and he can open it and close it remotely. He can tap a configure tab that will give him a diagnostic of what’s wrong with it. So if he has, for example, a fault at valve 17 he can tap that diagnostic and it will tell him what’s wrong with it and what it needs to get fixed. Moreover, if it’s 1: 00 in the morning he can shut off valve 17, maybe shut off the two valves that are going to that, open up at a bypass valve, and he can submit bypass the problem. So instead of having to get in his truck and drive out —
James: I’m just thinking. He’s still at his.
Bill: He’s still at his house. He’s probably still in bed.
James: His jammies are on the iPad.
Bill: Exactly. He can then call that director back in Warwick and say, “Look. I’ve taken care of the problem temporarily. I know what needs to be done to fix it. I’ll go out there in the morning when it’s light, when it’s not snowing, when it’s not raining, whatever. And I’ll take care of it knowing that I have the proper equipment and the proper replacement parts.” That’s unheard of in the industry. It’s very different. Most significantly it’s not a third party vendor operated system. They own it. We put it on their server. It’s behind their firewall so it’s as secure as the rest of their system. They love it. We are rolling that out in the UK right now because it’s a big commitment. We expect to role that out in the US in the next year or two.
Bill: I’m sold. I’m ready to sign on the line which is dotted. I got to ask though. My dad was in sales when I was growing up. I don’t remember what tape he was listening to. I don’t even remember how old I was. He’s saying if you want to be successful in life find a hole in the market and fill it. How did you find these holes and how did you develop this IP to go about solving these problems?
James: We didn’t develop it. Again, an interesting story among many, we got the technology referred to us by a company that was associated with us in Oregon. It was a little company out of Beaverton, Oregon called TPI. It was a test and measurement company. They had a UK subsidiary, and that UK subsidiary had become involved with a very, very large company in the UK called DNV GL. In fact it’s the largest energy consulting company in the world.
DNV GL had bought the R&D division of British Gas when British Gas is privatized about 11 years ago. As many big companies do I guess, they bought this division for some reason but not for the products that they acquired. In fact they didn’t even pay attention to it for four or five years.
James: People were just clocking in, clocking out.
Bill: Exactly right. Three-hundred engineers, a beautiful facility and a huge amount of research and development. Apparently about five years ago they told a licensing director to go down to Loughborough which is where it is in the UK, look at what we bought when we bought that facility. If there’s something there to license, license it. If it isn’t, then just get rid of it. Close it down.
Well, we happen to get involved with that licensing director who had this very unique technology. We thought very, very valuable. In fact I thought it was industry shifting. It really made sense to me. At the time we acquired it from them they understood it was a potentially big product but they don’t do products. They’re a consulting group. They currently do around $26 billion a year in revenue. They have 19,000 employees. They didn’t want to do something outside of what they —
James: A lot of the time it’s the engineer. “Hey, I built this thing but I don’t know how to sell it.”
Bill: Exactly right. Not only that. “I’m not interested.”
James: “I could care less about selling the damn thing.”
Bill: Yeah. So it was interesting. We got the technology. Actually that’s what spurred us to buy Orbital in 2013 and to really develop a gas division or an energy division. We have the technology. I acquired it because I felt it was an electronic metering device, we’re electronic company, and we could sell this. The problem was it was a very standard system.
When we acquired the technology we also got the engineer who helped invent it. He was a very bright guy, 37 years with British Gas, so very involved in the industry. We would go, he and I generally, to these meetings where we would meet with the top level of many, many different pipeline companies. Kinder Morgan here in the US, El Paso Gas at the time was still independent. We went and saw them. Saw Williams.
We would sit down with these guys and we would say, “Look. Here’s what we have. We have this incredible analytic device that will measure CV accurately in less than five seconds.” They would look at it and go “Impossible.” We’d say, “No. It’s possible. Here. I’ll let you have one. You test it. When you’re confident that it does what we say it will do let us come back and we’ll talk to you.” They would do that. In each case we came back, always the same response. “Wow! This is incredible. It does do exactly what you said it would do. Now, tell me. What does CUI do in the gas industry?” Of course the silence was deafening because we didn’t do anything in the gas industry.
James: That’s not helping you. If you don’t know this industry, if you don’t know the culture, if you don’t know the people, it doesn’t matter what you’re doing. They ain’t going to buy in.
Bill: That’s right. If you are not a gas industry person then they don’t want to talk to you no matter what your technology is. So what happened is, realizing that, we partnered with Orbital because Orbital had, at the time, the VE technology which made our device that much faster. An opportunity arose to buy Orbital. We bought Orbital. We now have a gas presence. Now I understand it. What we bought when we bought Orbital was not just a gas company. We bought the engineering talent, the 24-hour helpline, the ability to create and solve problems that we didn’t have as an electronics company. We had that as a gas company.
James: You cannot overestimate the price of the wisdom and the engineering minds that you have in that acquisition.
Bill: Absolutely. You can’t overestimate that. The other thing, you hit at it at the top of the show, when you’re in an industry where a mistake can cause people to be vaporized, you’re very careful about what you put in that pipeline, and you should be very careful. So to buy something from a company that is not a gas-centric company, someone who is not involved in the gas industry, I understand the risk there and I understand now which I didn’t understand then why a gas company would hesitate to buy something no matter how good it was from a company that was not gas-centric. Well, we are gas-centric now.
James: You’ve made it to Oil and Gas This Week Podcast. Big accomplishment in your career, I’m sure. It’s a huge notch on your belt there.
Bill: I’m getting to be successful, I can say.
James: If anybody wanted to reach out to you personally or find out more about what you all are up to, where would you send them, and tell them what to do.
Bill: First of all, as you can probably tell, I’m very enthusiastic about the company. I make myself very available. You can get a hold of me or get more information on the company by going to the company’s website. That is cuiglobal.com. My contact information is there. You can see presentations to talk about the technology. You can see videos of me talking in front of groups explaining the technology. It’s a very vibrant, very user-friendly site. Again, if you look there and you have a question that you don’t find the answer there, you have my contact info. I welcome emails. I think even my cell phone’s on there. Again, I do answer both emails and calls.
James: The transparency is phenomenal. I hope that your influence spreads throughout the industry rapidly because we need more guys like you around. In the meantime, I really appreciate you stopping by. I know that quite a big portion of our audience is in the UK. Hey, anybody, if you’re in the UK and you’re not buying things from Bill, hit him up. I think the sun is out now. I’m going to let you go enjoy the rest of your day in Houston.
Bill: I’m going to do that. I’m going to go out to that warm, humid weather and love it. Thank you. Thanks so much.
James: Yes. Thanks for stopping by.
Thanks for listening to this .5 episode of the Oil and Gas This Week Podcast, Brought To You By Red Wing. You can find the show notes for this episode which include links to everything we talked about and Bill’s contact information at triberocket.com/twcui. You can also leave any comments you have about this episode there which is triberocket.com/twcui.
Join us again next time when we talk to Eric Fidler, President of INTECH Process Automation, about how to successfully deploy new technology across the oilfield.
Eric: As an executive, you’re deciding to invest in tools to make your operation more efficient. You need to create an environment where people want to use the tools. It’s through getting people on board by goal alignment, and it’s also in empowering them to succeed through training. Both pieces are required.
James: Until then, go find some grease, guys.