Foundation Spotlight
Entrepreneurial spirit
Alumnus Tom McPherson talks about starting companies and giving back to his alma mater.
Tom McPherson, who holds two engineering degrees from NC State, was named a Distinguished Engineering Alumnus in 2004.
Tom McPherson, an NC State engineering alumnus, likes to start things. He’s been a key player for five technology startups, many of which were bought by larger companies.
McPherson is also starting things at NC State. Because of his generous professorship endowment, the UNC Board of Governors has named Dr. Tom Miller as the first recipient of the McPherson Family Distinguished Professorship in Engineering Entrepreneurship. Miller directs the Entrepreneurship Initiative and the Engineering Entrepreneurs Program at NC State.
We caught up with McPherson to ask him about his career, his relationship with NC State, and the importance of giving back.
You were trained as an electrical engineer at NC State. How did you get involved in entrepreneurship?
When I left State in 1977, engineering jobs were hot, and I felt that NC State gave me a great start. A company called Digital Communications Corporation was aggressive and made an offer on the spot. It appealed to me because it was smaller, and it was a great place to work. After about five years, I learned that a fellow NC State grad was starting a company in Palo Alto, Calif., and that’s what started this big adventure in entrepreneurship. The first startup didn’t make it. The next one, Network Equipment Technologies, went public and is still listed on the New York Stock Exchange today.
Tell us about Rapid City Communications, one of your greatest entrepreneurial successes.
Rapid City Communications focused on Gigabit Ethernet technology, and when it started in 1996 some decisions needed to be made about the features of the products. This was a case where some of the technical judgments you have to make about the technology business come from being in the trenches as an engineer. We put a routing feature on the products and the company became successful. Investors had put in $6 million — and the company sold to Bay Networks for $155 million after just 14 months. Then Nortel purchased Bay Networks.
Talk about your relationship with Tom Miller and the Engineering Entrepreneurs Program, and why you created this professorship.
I met Tom Miller around 2001, and we started talking about what he was trying to do. He was telling students that there’s another career path besides working for a large, successful company, and that message really appealed to me. His program obviously helps students become great leaders, but I think it also makes students better followers because they are better positioned to develop startups within companies. The students understand the team nature of doing business and are comfortable with both financial people and engineers. Business schools traditionally do this sort of thing, but his program focuses a little more on the engineers’ perspective. That’s important because many successful Silicon Valley startups, for example, are run by engineers. I’m a firm believer that Tom’s program is distinct, and I thought the professorship would be a good way for me to give back.
Why is funding for professorships so important?
Most people don’t realize that public universities draw funding from three sources: the tax base, tuition and the private side. For NC State to become the number one public engineering university, it’s going to take a significant amount of private involvement. The difference between NC State and our rival universities will probably come down to that.
You’ve enjoyed recent success as CEO of Cognio Inc., which was bought by Cisco Systems. What’s next?
That’s a good question and I really don’t know the answer to it. You can
label me ‘pseudo-retired’ (laughs). Right now I’m playing golf and looking
for the next gig. 
Thomas R. McPherson Jr. holds bachelor’s and master’s degrees in electrical engineering from NC State. He serves on the Board of Directors for the NC State Engineering Foundation and the Advisory Board for the Engineering Entrepreneurs Program. The College of Engineering named McPherson a Distinguished Engineering Alumnus in 2004.