At NanoMech, Small Means Big Business

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Despite being born half a world away, Ajay Malshe is at home in Northwest Arkansas.

More importantly, he’s also embraced the spirit of its most legendary entrepreneurs, men like Sam Walton and Don Tyson. Malshe, the founder, executive vice president and chief technology officer of NanoMech Inc., speaks openly of his desire to replicate their success.

“We are, as a company, practicing what this area has preached — a cultural transformation,” Malshe said.

In NanoMech’s case, the transformation involves the use of nanotechnology to manufacture products with broad applications. Those applications include machining and manufacturing, lubrication and energy, packaging for fresh produce, biomedical implant coatings and strategic military uses. It is an industry that has been projected to grow from $147 billion in 2007 to $3.1 trillion in 2015.

Chairman and CEO Jim Phillips believes the presence of Malshe and his NanoMech team, along with a commitment to the field evidenced by the construction of the University of Arkansas’ Nanoscale Material Science and Engineering Building, give Northwest Arkansas a chance to become “the epicenter of nanotechnology.”

Such talk makes a comparison to the Silicon Valley a natural one, but Malshe dismisses it.

“I don’t like to be compared with Silicon Valley,” he said. “Silicon Valley is just one element. We are working with 10 more elements here.”


An Introduction to ‘Nano’

The science behind nanotechnology is enough to boggle most minds. Putting it as simply as he can, Phillips describes nanoscience as “the ability to make atoms work harder and smarter.”

“Doing that, you’re able to build things completely differently,” he added. “Because you’re able to manipulate at the molecular level, you’re able to make everything work and perform better.”

Nano scale represents one billionth of a meter, and when materials are broken down to that size, Malshe said, they become “much more pure with much higher potency in their functions.”

It takes less material, therefore, to make more product.

“You are providing more for your customers by using less,” Malshe said. “Can you see the value proposition?”

Malshe can, and in terms that are equally mind-blowing.

“We have built 20 centuries by using a two-dimensional periodic table,” he said. “So, where do we go from here? We have no more elements. I don’t hear people discovering elements.

“So, how we can add a third axis to the periodic table? The size can be the third axis.

“If I take the same gold and chop it into five nanometers, 10 nanometers, 20 nanometers, each gold will give different colors. The same is true with aluminum. It’s a structural element you can use to build a fence or boat or door or whatever. But if I reduce it in size, it can burn.”

If that’s true with all elements, particularly the metals, nanoscience can shape the future.

“If you think about it that way,” Malshe said, “you just opened an opportunity to build the next 20 centuries.”


More Than Science

As passionately as he talks about the science and technology behind his business, however, Malshe speaks with more fervor about the greater good he believes NanoMech can create. He even jokingly balked at the notion that NanoMech is a “technology story.”

“If you think about Wal-Mart, Wal-Mart’s success is a people story,” Malshe said. “It is not about retail. Retail is just an outlet.

“NanoMech is a people story. It’s a success story of people. Who are those people? Those who have envisioned this, that have executed this, invested in this, bought this — people from the public sector and the private sector.”

The consumers who buy NanoMech-driven products, in particular, are the ones Malshe seems most eager to help. He readily professes a desire to impact society in a positive, lasting way.

“If you create a value, but you don’t have anything good to offer to the society, in the big picture it is not good for the society,” Malshe said.

Malshe said the “good” NanoMech can create is related to how its products can save energy, reduce waste and extend the life of other products. That’s critical, he added, given estimates the world’s population will grow from about seven billion to nine billion by 2045.

“Nanotechnology is not about cool science,” he said. “In the big picture of sustainability, it is about ‘How can I deliver more by using less?’ That’s the game we are in.”


Fast Friends

Malshe, who founded NanoMech in 2002, would’ve been hard-pressed to find a better teammate than Phillips. The two first met when Phillips was working on behalf of the University of Memphis’ FedEx Institute of Technology. That was around 2004 or 2005, when Phillips frequently traveled to other colleges and universities looking for potential members for research teams.

“I was very impressed, both with his intellect and energy,” Phillips said of Malshe. “It kind of stuck with me.”

Fast-forward to 2008, and their paths crossed again. This time, Phillips was in search of an investment opportunity, and had heard about the nanotechnology work being done at the UA. He recognized Malshe’s name immediately.

“I remember saying, ‘I know that guy!’” Phillips said with a smile.

At that time, NanoMech consisted of only a handful of employees. Still, Phillips was sold not only on the work being done, but Malshe, too.

“There are thousands of professors out there who are just absolutely brilliant, intellectuals,” Phillips said. “But the difference between an intellectual and someone like Ajay is he has the ability to convert that ideation to an invention that can be commercialized. That’s a rare gift.

“He can not only mesmerize, but he can produce.”

The admiration is mutual. In Phillips, Malshe found a like-minded soul who shares his passion for NanoMech’s research and work, as well as a willingness to work from dawn to well past dark.

Malshe was struck, too, by Phillips’ business acumen and the wisdom he had gained through his experiences at SkyTel, Motorola and other professional stops.

“One thing I respect about him is he is willing to make a decision,” Malshe said of Phillips. “Sometimes it might be a hard decision, but he has to make it.

“I appreciate that very much because that’s what allowed the technology to break the shell and go commercial.”

Malshe also relishes the re-telling of encounters he’s had alongside Phillips. Many of them revolve around meeting business and government leaders who are part of Philllips’ professional network.

Whether it’s the former chairman of DuPont, chief technology and research officers at John Deere or fellow members of the Council on Competitiveness, Phillips always seems to know someone who could be a potential friend to NanoMech.

“My father always told me it is not important if you know somebody,” Malshe said. “The more important question is if they know you.

“So if Jim tells you he knows somebody, that person probably knows Jim more than he knows them.”


What’s Next?

It was only a year ago that NanoMech was stuck somewhere between the research and development phases of some of its key products, Phillips and Malshe said. Determined to reach commercialization in 2011, Phillips said the NanoMech team responded with “more capital, more research and more elbow grease.”

Whatever the formula, the plan seems to have worked.

“We’ve moved from alpha to beta to full commercialization,” Phillips said, “to where the product’s out there, it’s working, it’s working every day and there are repeat orders.”

Phillips declined to disclose specific figures for the privately held company, but said NanoMech has turned a corner.

“We’ve gone from zero, in effect, to millions in revenue,” he said. “And we’re profitable. That’s all we can say.”

There is other evidence to support the claims of growth. NanoMech currently employs about 25 people at its roughly 10,000-SF factory at the Springdale Technology Park and 8,000-SF space at the UA’s Research and Technology Park. Phillips said the employment total could grow to 40 to 60 this year.

Facility expansion also is in the works.

“We have an immediate need for 3,000 to 5,000 additional SF, but we’re going to need somewhere between 10,000 and 30,000 very quickly,” Phillips said.

The growth likely will come in stages, Phillips added, though he already is in talks with architects. He’s also weighing the benefits of expanding near the Springdale facility or building off-site. Ideally, both he and Malshe would like to create a “campus setting” near the Springdale building.

Additionally, Phillips said NanoMech is “spending millions on acquiring equipment to build these new manufacturing capabilities and processes.” The immediate result will be increased production capacity for products like nGuard, nGlide and ElementX.

The push for increased space and manpower is being driven not just by increased orders, but a determination to establish NanoMech as an industry leader.

“There are lots of search engines out there, but everybody kind of thinks of Google, right?” Phillips said. “First-mover status is huge, and I think we can say today no one can coat cutting tools, which is a $30 billion industry, like we can.”

Both Phillips and Malshe said the company doesn’t have competition in other markets, either, but that will eventually change.

“Time is never on your side in technology,” Phillips said.

Phillips invested in aggressive advertising campaigns, too, in the form of everything from local billboards to multi-page spreads in national trade publications.

“My wife taught me a long time ago that if you’re going to throw a party and you’re going to have the best food, best decorations and everything — if you don’t send out an invitation, chances are no one will show,” Phillips said.

All of that together gives the appearance that NanoMech has become a darling of sorts. In addition to ongoing dealings with government agencies like the U.S. Environmental Protection Agency and Department of Defense, heavy-hitters like Exxon Mobil and Chevron also are calling.

“We have broken the shell,” Malshe said. “We are now a full-fledged, worldwide company.”

Maverick in the Making?

Heady prospects aside, Malshe continues to stress that people — and particularly those at NanoMech — come first.

“I have seen many, many good technologies,” said Malshe, who was born and raised in India, “but technologies are only successful when people work together.”

It also can help to have a bit of a maverick’s attitude. Like some of Northwest Arkansas’ greatest business leaders before him, Malshe has that.

“When I came to this state, I was told, ‘Oh, we should be doing what MIT is doing,’” Malshe said. “And I said, ‘I typically don’t play in a game where I’m a either a follower or I’m just working on something that somebody else is doing. We’ll be at the edge, or we just won’t play that game.’”