EDGE Southtree adds second production facility as staff grows

EDGE Southtree adds second production facility as staff grows

May 13th, 2018 by Dave Flessner in EDGE

Digitizing technician Nola Hale prepares to scan a piece of artwork sent in by a customer inside Southtree's Holtzclaw Avenue warehouse. Justin Smith, back left, works at his digitizing station.

Photo by Tim Barber /Times Free Press.

Company at a glance

Name: Southtree

Primary product: Legacybox, which vary in size and price from $87.95 for a starter kit up to a truck box for $1,099.95

Service: Digitizes tapes, film, pictures and audio and duplicates the originals on thumb drives, digital delivery through Legacybox Cloud or DVD.

Founders & co-owners: Adam Boeselager and Nick Macco

Started: In 2009 in a Cleveland, Tennessee, garage while Boeselager and Macco where students at Lee University

Facilies: Southtree has a downtown headquarters for finance, marketing and payroll in Warehouse Row and handles the digital conversion work in nearly 50,000 square feet at two warehouses off of Holtzclaw Avenue.

Justin Smith examines a Legacybox label while processing a customers media at Southtree.

Justin Smith examines a Legacybox label while processing...

Photo by Tim Barber /Times Free Press.

Adam Boeselager and Nick Macco were still Lee University students and housemates when they founded Southtree in their garage in Cleveland, Tennessee, and began converting old movies and slides into digital files for storage and replay on today's electronic devices.

Less than a decade later, the pair have built Southtree into the biggest e-commerce company of its type, having digitized more than 2 million videos and creating more than 3 million DVDs. At its seasonal peak, Southtree's staff has grown to more than 200 workers at three locations, including a second 10,000-square-foot production facility on Cumberland Avenue Southtree is adding this year adjacent to its current 40,000-square-foot location on Holtzclaw Avenue.

While some of its rivals are moving offshore to perform such work, Southtree officials decided to keep production in Chattanooga, where they can keep a close eye on operations and offer quicker turnaround of services than similar companies.

"Some competitors choose to outsource this," says Ali Holzaepfel, the chief financial officer for Southtree. "But we're proud to keep investing in Chattanooga and the people in our community."

As of this year, Southtree is converting about 25,000 home videos per week to digital versions for storage in the cloud or on computer thumb drives or DVDs.

"We're always striving for continuous improvement, and we're excited about how this new facility will better serve our team and ultimately our customers," said Boeselager.

For the past five years, Southtree has also offered the Legacybox, which offers package deals for sending in a variety of home movies, slides or film to be digitized, with the mailing cost for return shipments included in the price. The company's tagline is "forever made simple."

"The fulfillment side of the business is custom manufacturing," Macco says. "It's not an assembly line, because each product is a one-off product and has to be handled individually."

While the conversion work is customized, Macco and Boeselager have carefully studied the workflow patterns at each work station to continually find better equipment, layout and training for technicians to most efficiently do their work and handle multiple conversions at one time. The two started out doing such work themselves and remain focused on both the marketing and operations sides of their business.

Macco concedes he wasn't a stellar student at Lee University and did not graduate. But Boeselager, who studied political science at Lee, and Macco, a business major, did learn the value of analyzing information to help build their startup business while still in college.

"We're able to do everything with data, and we look at metrics all the time to figure out what works best," Macco says. "We understand how to market directly to our customers."

Macco said the biggest key to Southtree's growth has been its direct-to-consumer marketing, which is directed from the company's downtown headquarters in Warehouse Row. Southtree is doubling the size of that facility to handle its growth, and the company recently became one of the first local businesses to sign up for EPB's five gigabit service (behind only the University of Tennessee at Chattanooga).

"It's because of the sheer amount of data we're uploading every day to the cloud," Macco says.

The new offices will house Southtree's growing customer support, marketing, finance, development and design teams. The company partnered with local Smart Furniture to create a modern floor plan that allows for collaboration.

"A key to our growth has been our online-focused, data-driven marketing," says Jill Wilson, the chief marketing officer for Southtree. "Our new offices, along with exciting, technology driven growth will help us continue to recruit more great people to both Southtree and Chattanooga."

Macco said the company promotes its Legacybox and other services through a variety of advertising methods throughout North America to reach those wanting to preserve and view old photos, films, videotapes and slides.

"It started online, but it's also with radio, satellite and other media," Macco said.

Southtree has been called "Best Memory Keeper" by Good Housekeeping Magazine, "A Must Have" by ABC's The View, and "My 2016 Resolution" by Rachael Ray Every Day Magazine.


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