Value Added: While pitching a business, this former slugger found a hit
By Thomas Heath,
When I think of ex-baseball players, I think of guys who are now high school coaches or minor league assistant managers or somebody who sits in a booth doing play-by-play for a small-town team.
The word “entrepreneur” doesn’t jump to mind.
But it applies to Keith Nalepka, 39, an ex-jock and Silver Spring native who smartly parlayed his baseball talent into a college degree and a set of life skills that brought him his own company.
The former high school slugger for Good Counsel (his batting average was a whopping .444) is an executive and part owner of a technology company called Hi-G-Tek — split between Rockville and Israel — that has a cool mission: It builds and installs postage-stamp-size electronic sensors that keep an eye on everything from nuclear materials to brain cancer drugs to gasoline.
If you bring a shipping container full of television sets into Ethiopia bound for a neighboring country, Nalepka’s sensors are going to know if someone opens the container five miles down the road and sells them on the black market. Hi-G-Tek’s client is the government of Ethiopia, which wants to collect duty on those televisions if they are sold inside the country.
If Barrick Gold, the giant Canadian mining company, wants to know whether someone is pilfering fuel from its house-size dump trucks, Hi-G-Tek sensors lets them know if a fuel valve has been opened.
And if the $2 million worth of an experimental brain cancer drug in a messenger’s case is tampered with, Nalepka’s company will know.
Same with nuclear material in hospital drawers, or a store of temperature-sensitive insulin.
“We keep an eye on high-value assets,” Nalepka said.
The company should break even this year on about $6 million in sales. Its diversified group of owners includes a radiologist friend of Nalepka’s named M.S. Kim, who owns the biggest share of the company, while Nalepka and two partners, founder Micha Auerbach of Israel and executive Elio Oliva, own the rest.
What intrigued me most about Nalepka and Hi-G-Tek, aside from serving a niche that I had never known existed, is Nalepka’s appetite for entrepreneurship and the smarts to use baseball to get there.
He may not have made “The Show,” as baseball’s major leagues are called, but it looks like he didn’t whiff on some big decisions.
One of the keys of success, I believe, is trying to put yourself in positions where opportunities arise and then making the most of them. You don’t have to get every decision right, but you have to hit some squarely.
Nalepka knew all along that getting a college degree was going to be key. When he signed with the Texas Rangers right out of high school in 1991, Nalepka banked his bonus and eventually put it toward his degree from Maryland. He lived during the baseball season on the $2,500-a-month paycheck he earned catching for the Rangers’ farm teams in Butte, Mont., and Port Charlotte, Fla. He went to school during the offseason.
He never made it to the majors and left after five years for a job, which friends helped him find, selling an asthma drug for Forest Pharmaceuticals on Long Island.
The transition wasn’t easy.
“Having to go out and get a real job after playing a sport is a nightmare,” he said.
When Nalepka played baseball, he watched how Rangers star pitcher Nolan Ryan, still throwing in his 40s, went about his work — his professionalism, his fierce competitiveness and his work ethic.
During his career selling pharmaceuticals, Nalepka tried to apply the same discipline. He harbored an itch to go into business for himself and he constantly pitched Kim, a family friend, on business ideas in and around the health field. But Kim kept passing.
In 2010, he began an entrepreneurial program at Johns Hopkins Carey Business School that taught him how to start and grow technology-based businesses.
“It wasn’t spending half a semester in accounting,” he said. “It was a hands-on program. I was learning how to pitch, how to raise money, how get small business grants.”
Opportunity struck when he was at a Johns Hopkins networking event about a year ago, pitching a group of investors and lawyers on a business built on guaranteeing the safe transportation of high-value drugs.
Auerbach, an investor with 35 patents to his name, had started Hi-G-Tek in his garage in Israel in 1989. He and Oliva happened to be in the audience. They approached Nalepka afterwards, saying they ran a company that was built on the model he was proposing.
The problem was that Hi-G-Tek was losing money, and its venture-capital backers were looking to get out after investing around $30 million in the firm.
Nalepka took the idea to Kim, who liked what he heard. He said he would help Nalepka, Auerbach and Oliva buy the firm for around $3 million, which was the debt that the company had on its books.
So the three entrepreneurs got together around Christmas last year to develop a business plan. They found lawyers through the Johns Hopkins program, who helped them write an offer sheet to buy the company. By the end of February, they owned Hi-G-Tek.
They quickly started fixing the bugs in the company’s technology and focused the business on three areas: helping countries track incoming containers so the nations could impose duties; monitoring the transportation of fuel, milk, nuclear waste, hazardous materials and chemicals by tanker trucks; and ensuring pharmaceuticals and other high-value medical goods are not tampered with in transit.
They visited key customers, traveling to Kenya, Ghana, Ethiopia and Kazakhstan to hammer out deals. They fixed outdated sensors, hardware and hand-held devices that track the movement of goods.
They used revenue to help pay down debt owed to manufacturers, cleaning up the balance sheet. The company has hired three engineers in the past 30 days, and it is hoping to close several new deals in the next few weeks. It has a dozen employees in Rockville and about 16 at its offices in Israel. The company make some of the hardware itself and outsources the rest.
Nalepka didn’t totally desert the game that helped get him started. He is head coach of his 6-year-old son’s coach-pitch baseball team.
His son’s name is Nolan, after Nolan Ryan.