Small Business
VOL. 24 NO. 3, MAR. 31-APR. 6, 2003

His rare expertise attracts clients
Magnetics specialist puts skills to use as consultant

By Greg Andrews
IBJ Reporter

When Stanley Trout worked as an applications engineer for Anderson-based Magnequench Inc., he felt like an emergency-room doctor.

The company made magnetic products, primarily for the auto industry. Customers would call wanting quick-and-dirty answers. What magnet would I need, with what dimensions? And what would it cost?

Today, Trout is still trying to provide rapid solutions for others, but now as a consultant. After being laid off by Magnequench, he set up his own business, Spontaneous Materials, two years ago last month.

As a specialist in magnetics and rare-earth metals, Trout is not your dime-a-dozen consultant. George Cunningham, president of Magnetic Instrumentation Inc., a locally based client of Spontaneous Materials, figures he and Trout are among fewer than 50 magnetics experts in the country. The number of rare-earth-metals experts is similarly small.

"I don't have much in the way of competition, which is nice. But the big thing is finding customers, or, turning that around, helping the customers find you," said Trout, who runs the business with his wife, Pamela. She runs the office and handles marketing.

Magnetics and rare-earth metals are distinct but related fields. Trout developed a fascination with both while earning his doctorate in metallurgy and materials science from the University of Pennsylvania in the 1970s.

Rare-earth metals are elements of the periodic table that derive their name from the fact scientists once believed them to be uncommon. Many of the elements have magnetic qualities.

Magnetics and rare earths aren't just areas of study for the academic set. They have numerous industrial applications. For examples, computer users are able to rapidly access the data on their hard drives in part because of magnets that spin the disk platter and move the read/write head.

Other examples: The element cerium is used to polish TV screens and to keep them from browning as a result of being constantly bombarded by electrons. Rare earths also are used to facilitate chemical reactions in automobile catalytic converters, among many other uses.

When Trout set up his business, he called all the consultants he could think of in related fields. He refers work to them, and they pass on leads to him. He also fortifies existing relationships and builds new ones by turning up at trade shows and conferences.

But his biggest client so far is a company in his own backyard, locally based Polaris Rare Earth Materials LLC. Polaris was founded two years ago by another former Magnequench engineer, Mitchell Spencer.

That company imports from China materials for North American customers. Before setting up the business, Spencer had spent three years as project manager for a plant Magnequench was building in China.

"I suppose what we needed was someone to help us with the market," Spencer said. "The only thing we were familiar with were basic rare earths. We knew nothing about the North American market for rare earths."

So he tapped Trout, who'd developed relationships and knowledge of the domestic market through more than 25 years in the magnetics and rare-earth industries, much of it in sales.

Said Trout: "My role was helping them get off to as good a start as they can in this economy."

Indeed, this isn't the ideal time for someone like Trout to be starting a consulting business. The technology bust has forced many companies that otherwise might hire Trout to rein in their spending.

And long-term trends are troublesome. Buoyed by lower costs, China is rapidly becoming the center of magnetics and rare-earth manufacturing, and firms there are building their own engineering and technical expertise.

But Trout isn't complaining. He said he has no grand growth plans. Now 51, he figures he'll be able to continue to line up enough business to carry him well into his retirement years.

Now that his Polaris assignment is winding down, he's trying to line up additional major clients. So far, he has worked with about a dozen firms, in locales ranging from Las Vegas to Brazil and China, but most just for a week or two.

Lining up more major clients would put his business on stronger financial footing, of course. But that's not his sole motivation. He said he also enjoys the intellectual challenge that comes from helping a diverse range of clients.

"One thing frustrating in the corporate world is people would hire me for a very narrow purpose," he said. "If I wandered too far out of it, people would ask, 'Why are you doing that?'"

Now, as his own boss, Trout has enjoyed shedding those constraints. While business isn't booming--revenue last year was about the same as the year before--he said he's having a good time. And he said he feels good he's making it at all in such a challenging environment.