UNITED STATES DEPARTMENT OF COMMERCE

UNITED STATES COMMERCIAL SERVICE

INTERVIEW WITH

STEVE POPE,

VICE PRESIDENT, SALES & MARKETING,

DOMES INTERNATIONAL, INC.

BY

DOUG BARRY,

DIRECTOR OF MARKETING,

U.S. COMMERCIAL SERVICE

Transcript by

Federal News Service

Washington, D.C.

DOUG BARRY: Hello and welcome to the U.S. Commercial Service Market Brief. I am Doug Barry in Washington. Today we have as our special guest, Steve Pope, who is an executive with Domes International. And Steve, I see that you are featured in the new U.S. Department of Commerce book, “Basic Guide to Exporting.” You are one of the 17 case studies. How does it feel to be one of those?

STEVE POPE: Well, if I am being examined under a microscope, I suppose I am squirming a little bit. But it is fine. (Chuckles.)

MR. BARRY: The report is most favorable on your company. And what is interesting is that Domes International started as just kind of a “dome” without the “international” part created by what you have called a very brilliant individual.

MR. POPE: That is correct.

MR. BARRY: What did he do?

MR. POPE: Well, Joel Nichols and his two sons originally started this about 30 years ago down in a barn in Mantachie, Mississippi. Joel is, as I said, a genius when it comes to working with his hands and creating and designing things and so forth. And he built all types of things out of composite fiberglass and so forth, including racing boats and airplanes and other items. And then finally, he came up with an idea to build a composite fiberglass house. And he developed this and made the molds.

And essentially for 18 years, he built them out of his barn and went through a period of trial and error. You know, this is not a science; it is an art in terms of building these things to work right. And he got them up to a point of perfection. And then our – the current management team came in and merged with him and sunk new capital in and built it up to a more mass-market type of an approach.

MR. BARRY: Now, Steve, is it true that this gentleman got his venture capital from the local undertaker, who also sidelined as an angel capitalist?

MR. POPE: (Chuckles.) Well, in so many words, yeah, the group that came along included an undertaker and a CPA and so forth. And yes, they invested money in it and got it up, as they say, off the ground and into a big modern factory and so forth.

MR. BARRY: So I guess the advice in these hard times is don’t overlook your local funeral director. This may be where next line of credit comes from. (Chuckles.)

MR. POPE: (Chuckles.) Exactly, exactly.

MR. BARRY: Now, tell me how the international became international.

MR. POPE: All right. I am president of World Discoveries Incorporated. We were founded back in 1990. And I had done import-export work in various countries over the years. And one of the people that I had been working with was an Indian. He had family ties in both India and in the U.S. And he – I approached him with this. Actually, let me backtrack a moment. About 10 years ago, I was introduced to Mr. Nichols and saw his product and was very, very enamored with it.

And after some false starts, they finally came to me after the undertaker group, as you put it, came in. They called me back in. I had already seen it once. But they called me back in and my company as a marketing consultant. And I took a look at the market both domestically and internationally and I quickly determined that the bulk for the – at least for the residential marketing – would be overseas in Third World countries because of the various things associated here that you had to go through to get it up and running.

So I sold some to my associate in India and put them up. And the demand was just enormous, absolutely enormous. And people were standing in line wanting to buy them, but we couldn’t give them to them because we didn’t have a factory. So to make a long story short, after two, three years of working on it, we finally – through the commercial service and through some other government entities, I was introduced to OPIC. And I –

MR. BARRY: That is the Overseas Private Investment Corporation, also a government entity, right?

MR. POPE: That is right. And we went and talked to them. And after almost a year and a half, we got some funding to build a factory in India. And so that is when we started on this venture. And the idea then, as it is now, is that India would be a relatively stable base to build this. And we could supply housing to the Middle East and Southeast Asia and Africa and other countries from that location because we had plenty of raw materials and everything necessary in India to do that.

MR. BARRY: Now, Steve, I have got to ask you a tough question. All of the others so far have been softballs. But here comes a tough question. You moved the factory over to India – or built the factory in India. Didn’t this come at a cost to U.S. jobs?

MR. POPE: No, not at all. In fact, it increased it. What we did – I mean, because of the nature of our product, these panels that we make are large, bulky panels. And in order to ship them, it requires shipment in a container with a lot of dead space. And there is not much weight to them. So consequently, it became very, very expensive to try to ship panels overseas. But in order to make the panels, you have to have proprietary molds. And that is what we make and that is what we are good at making.

So what we did was make proprietary molds. We made the equipment. We purchased the equipment. We sent it over there. So we completely outfitted the factory. And then we got some ex-pats to go over there and actually set the factory up and run it for a while. So we accomplished that by, obviously, adding some people here. And what we did over there was basically buy the raw materials. And we had the laborers over there build it and sell it. So Domes owned half of that company over there, so, you know, the profits would be flowing back to the U.S.

MR. BARRY: Right. And you make the molds in the United States, which arguably is the real brainwork, and then outsource the actual fitting together of the pieces and the transportation.

MR. POPE: That is right. That is correct. That is correct.

MR. BARRY: Okay. And of course, one of the attractions of the fiberglass housing is that it is hurricane resistant. It is bug, termite resistant in some of those tropical areas where they have such problems. What other advantages are there of living in a fiberglass structure of the sort that you produce?

MR. POPE: Well, there are many advantages. And I won’t belabor the point, but I can tell you that there are – there is virtually no problems with the dome housing at all. It is built and designed by its very nature. It sits on a – typically on a concrete or a cement foundation, although it can go on other types of things like decking and plinth and that type of thing. The panel seams are protected by a silicone sealant made by GE and warranty are with an expected lifespan, I should say, of 70 years-plus. Fiberglass and composite fiberglass – and I want to note something. It is not just fiberglass. This is a composite made of many different materials.

And fiberglass is certainly one of them and one of the major ones. But they have other components in there, as well. And this gives it an extremely durable finish. There is no snow or debris pileup on the roof due to the dome shape. It is very aerodynamic. If you say we have been approved by FEMA for hurricanes and tornadoes, it is very high impact resistant – over 8200 pounds per square inch. It has been tested. Very high structural load capacity. The dome is the strongest structure known in physics to withstand, you know, pressure and force.

MR. BARRY: Well, Steve, one of the very fascinating parts of the book, which, by the way, our listeners can purchase at their local bookstore. It is available now and it has Steve’s story in there, along with 17 others. But when you talk about domes, this is Buckminster Fuller’s brilliant invention a number of years ago – the geodesic dome, in particular. But what I found fascinating in reading your story in the book is that when you got to India, you found that the Indians themselves were not particularly enamored with domes and, in fact, they were somewhat put off by them.

And instead of giving up and sailing back to the United States, you talked to them and you figured out what they did want, and you adapted your original structure in ways that even you could not have imagined before you got there. Can you tell us a little bit about that?

MR. POPE: Well, that is exactly right. We are going into culture shock, obviously, when we go into an Indian culture from a U.S. culture. The ways we do things here are obviously not necessarily the way they do things there. They wanted a – obviously, they are concerned with cost without doubt. But they also had to be educated as to the strength of composite fiberglass. I mean, we – the walls of our panels are anywhere from one to one-and-a-half inches thick. And they couldn’t understand how that could be stronger than, you know, their concrete cinderblocks or their mud bricks that are a foot thick, you know. And we had to educate them about the strength of the fiberglass. We had to educate them about the many things about being corrosion-resistant and termite-proof and rot-resistant and all the other things that go along that made it virtually maintenance-free.

And then we had to compete with the pricing – the pricing prior to us going over there. And when we built the business model for OPIC, we were using current raw material prices in India and so forth. And by the time the project got completed at OPIC and we got the factory up and running, the price of oil had more than doubled. And our product is 70 percent petroleum-based. So we had to adjust our pricing strategy and look at different markets than we had originally.

So we worked with the government of India and the military and went through a lengthy and exhaustive process to get qualified by the ministry of commerce to be able to sell to the military and the government in India. And that took almost a year, as a matter of fact. So we wound up selling things to the military where they needed them and especially up in the mountains – the mountainous areas, in the Himalayas and so forth, where they had to, in some cases, actually carry them up on narrow mountain paths and things like that, where there was no way to get a construction crew up there.

So we adapted to the various conditions that they needed in order to make this thing work. We also along the way developed a flat-panel system made out of the same material, but it was flat and could be shipped in a container much easier. And we offered that over there, as well.

MR. BARRY: Well, Stephen, what are you doing now? It is the middle of March 2009. The world economy is in full retreat. The U.S. economy is in a terrible funk. How are you managing?

MR. POPE: Well, there is a couple of things that are going on. We are working with the military over there to, you know, supply their needs. And of course, they have to have housing regardless. So that is one of the major sources that we are looking at. But we are also in the process right now of talking to a couple of very large entities in both India and in Pakistan, I might add, to look at a joint-venture capability of maybe producing these elsewhere, as well. And this would be a spinoff of the Domes India site. And that would bring in some heavyweight marketing partners and would bring in needed capital for expansion and so forth.

So those are things that we are looking into at this point.

MR. BARRY: And Steve, the Obama administration has said that it is very committed to rekindling the entrepreneurial spark among people in the country. Do you have any advice for his administration? How do we create more of your founder’s zeal way back in Mississippi years ago and how he turned his brilliance into a new product and a new business, which lives on today? How do we do that? What would you advise?

MR. POPE: Well, you get a large pair of scissors and you start cutting red tape immediately. There is an enormous amount of bureaucratic work that has to be done in preparation for doing anything overseas. And much of it comes from our government, as well as the host country government, as well. So you have to go through essentially two sets of that. It needs to be streamlined for – especially, for small-to-medium sized businesses. It needs to be streamlined enormously because we don’t have the staff to, you know, to sit there and work on thousands of pages of report and so forth.

But you also need to, you know, cut down enormously on the – any taxes and fees and so forth that are coming along to prohibit the startups. And I might add the commercial service does a great job, but I would say it needs to go even further in identifying foreign partners and getting information about them. We went through several – I should say – to try to find one. And it is very, very important that you know who you are working with.

Many times they look good on the front, but they may not be that great on the back. And sometimes you don’t have the resources to go back and, you know, check their backgrounds and that type of thing. So don’t get me wrong. The commercial service was great. But I am saying the consulates in the various countries should, you know, bend over backwards to go back and do background checks on these companies and make sure that, you know, they are who they say they are and they have the wherewithal they say they have to join forces with you, whether they be suppliers or potential joint venture partners or whatever the case may be.

MR. BARRY: Well, Steve, we are honored to have you as a client of the U.S. Commercial Service, working with you for a number of years in a bunch of different countries. And, you know, we are very proud of you and the work that your associates have done to keep the business going and growing through all of these difficult and interesting times. And certainly, you know, your company, I think, embodies the importance of going into a new place. Maybe you had fixed ideas, but once you got there, looked around, saw that the climate and the environment had changed, you adapted very quickly and were able to be successful in ways that you at first did not even imagine.

So we are very, very pleased to have you on the show today. And thanks for being here.

MR. POPE: Well, I appreciate the honor and I would be more than happy to, you know, answer any questions you may have.

MR. BARRY: Great. I am sure our listeners will have some and we will include your contact information on the Web page that people will be listening to this report on. And Steve, all the best to you and good luck with your future sales around the world. And ladies and gentlemen, thank you very much for joining us today on the U.S. Commercial Service Market Brief. I am Doug Barry in Washington.

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