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Nicolaas Verheem: Building a Box Office Hit

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“Maxwell would be proud.”

It’s the line that capped Nicolaas Verheem’s Oscars and Business Journal awards acceptance remarks. And, it’s also the line that ends Verheem’s 5-minute video submission for Teradek LLC, the Irvine company he founded, to the Academy of Motion Picture Arts and Sciences.

The line is a reference to physicist James Clerk Maxwell, whose Maxwell’s Equations explain how electricity and magneticism work. Maxwell, more simply, invented electromagneticism and it’s that invention that fast forwards to the story of Verheem, Teradek and the motion picture and broadcast industries his company now helps support.

“It’s a little story of us standing on the shoulders of giants,” Verheem told the Business Journal last week of the Oscars video submission, referencing the chain of scientists and inventors whose technology in aggregate helped allow for the creation of Teradek’s Bolt wireless video transmission system.

Verheem, as an aside, had little tech to work with when he was told to make the video submission for the Academy outside of his laptop, no microphone and stuck in what he described as “a smelly, little room in London,” away traveling on business at the time. He Googled images of scientists and created the video’s messaging.

Teradek’s story struck a chord.

The company won an award in the Scientific and Engineering Award category from the Academy of Motion Picture Arts and Sciences during the Oscars ceremony in February.

More recently, the South African native was honored by the Business Journal earlier this month with an Innovator of the Year Award during a Sept. 9 event at the Irvine Marriott.

Central to the awards is the company’s halo product, the Bolt, which allows for high-definition, real-time transmission of video, minus the mess of cables, for everyone from the one-person camera crew to big budget Hollywood movies.

The system was used on Clint Eastwood’s latest film, “Cry Macho,” Star Wars and Marvel movies, among many others.

Acquisitions

Teradek, much like the raft of innovations across the decades its products are built off of, is enmeshed within a larger organization that’s scaled via the acquisition of technology firms.

Teradek was acquired by Vitec Group PLC (LSE: VTC) in 2013. The division Creative Solutions, which Verheem leads, was later formed to house Teradek in addition to other acquisitions.

Creative Solutions in 2018 bought Israeli wireless chipmaker Amimon Inc. and earlier this year acquired Chicago-based livestream platform Infiniscene Inc. and Lightstream for a reported $36 million.

The Creative Solutions group is projected to generate $100 million to $120 million this year after ending last year with $80 million in revenue. Teradek boasts some 90,000 units that have been sold to date and integration in professional camera systems such as Sony, Arri and Foothill Ranch’s Red Digital Cinema LLC.

“Vitek is definitely an acquisitive company,” Verheem said.

The CEO said acquisitions are likely in the future. Part of what’s driving that, he said, is the result of the camera accessories and technology industries consolidating.

“What we try to do is we obviously want to find something that’s complementary, but it’s helpful if there’s some overlap [in products or services]. So, we want people to address the same markets that we’re interested in,” Verheem continued of what makes an attractive buy.

That would be those who service companies in the content creation or storytelling space, the CEO went on to say.

Origin Story

Ten years ago Verheem bootstrapped to start Teradek.

The CEO, whose résumé included rocket science at Denel Dynamics and video processing at GE Security, decided to strike out on his own, taking his professional background and personal passion for photography to start Teradek.  

“It all began in 2010, when we realized there was a big opportunity in untethering the monitor from the camera, since the traditional video cables were limiting the camera freedom and posing tripping hazards,” Verheem told the Business Journal earlier this year of the Bolt’s impetus.

The lack of outside capital is why much of Teradek’s product lineup was made locally in the beginning. A high percentage of the manufacturing remains local.

“I didn’t raise a ton of money, so everything was manufactured in Orange County,” Verheem said of the company’s start.

That meant everything from the machine work to printed circuit boards and even boxes were made here.

“Literally, everything was made in Orange County. So, it was our little factory and then a bunch of local vendors. Over time, as the business got bigger and achieved a certain scale, some pieces ended up, like our plastic molds for example, come from China. All the key pieces, all the electronics are still manufactured in Irvine and Orange County,” Verheem said.

Local manufacturing was also something Verheem had been exposed to when he first came to Orange County in 2000 to work at Impact Technologies, near John Wayne Airport. The company manufactured locally. It was later acquired by GE and, over time, certain parts of the business were moved offshore.

Keeping it Local

Teradek, to a certain extent, is modeled off of Impact’s production strategy prior to being bought, Verheem said.

“I wanted to build a business that everything could be located in one building. Sales and engineering is still in one building, but that obviously means we have to target customers that are willing to pay a premium for that because it is more expensive than manufacturing offshore,” Verheem pointed out.

Luckily, broadcast and cinema companies are willing to pay that premium for the quality, knowledge base and the peace of mind that, should something go wrong with the equipment, they can get help fast.

“Making a movie is very, very expensive. So, if something breaks, they want it fixed very, very quickly,” Verheem said.

The challenges last year presented by COVID made things difficult with sound stages and theaters shut down, largely putting a stop on in-person production. Teradek worked quickly to tweak its products to allow for social distancing, with less of a crowd in the video village (the group of people typically seen on a set viewing what’s being shot on a single screen), or remote production work so that high-quality video could be viewed from home.

Verheem said the company’s goal is to support the media and entertainment industry in its recovery as it begins its bounce back, while also continuing to support the local community.

“For me, it’s about building a community. So, it’s no coincidence that everything’s manufactured locally and sourced from local manufacturers because I believe any company should not just think about its bottom line and customers, but also its community,” Verheem said.

“I want to recognize that we’re a great employer and we provide opportunities for the people in Orange County and, in return, Orange County serves us and makes this all possible.” 

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