Scott Graeff grew up in Riverview Park, PA and attended the University of Virginia, earning a BS in Commerce. However, before this, he served in the United States Army’s 3rd Infantry, “The Old Guard,” where he was Commander of the Relief at the Tomb of the Unknown Soldier in Arlington National Cemetery and a guard to the President of the United States during the Reagan Administration. This experience formed the foundation of his character. His military background contributed to the disciplined, intentional, and thoughtful planning and execution of his ideas to this day.
Mr. Graeff originally joined a division of Luna Innovations in 2003 and held a variety of positions, now serving as the President & Chief Executive Officer and a member of the Board of Directors.
Prior to joining Luna, he was a partner at Gryphon Capital, a Virginia based venture capital fund, and he also co-founded a software technology company that was sold to a Fortune 500 Company. He has held senior roles in a variety of financial institutions. In these various roles, he completed several public offerings and has been involved with mergers and acquisitions with a notional value of more than $8 billion. Most of Mr. Graaff’s experience is in a broad range of capital market transactions, strategic planning, and financial management.
Luna – Revolutionizing the Fiber Industry
Luna was originally founded in 1990 by an electrical engineering professor at Virginia Tech and over the years has been successful in taking innovative technologies from the applied research stage to product development and ultimately to the commercial market. The company went public in 2006 and today is a leader in optical technology, providing unique capabilities in high-performance, fiber optic-based test products for the telecommunications industry and distributed fiber optic-based sensing for a multitude of industries.
Luna’s vision is “to enable the future with fiber”. With a superior product portfolio in sensing, testing, measurement and control solutions, Luna is extremely well positioned to take advantage of mega-trends such as light-weighting, electric vehicles and increased demands on data centers and broadband capacity, such as 5G.
The shift to using lighter weight materials, like composites, in aerospace, automotive and within structures such as bridges, dams and tunnels, is continually growing, as is the drive to build smart infrastructure.
Mr. Graeff states, “What we are doing with fiber within our sensing vertical can be likened to the central nervous system in your body. Fiber optic sensors are the nerves of smart materials, and our products are the brain that collects and aggregates data from these fiber sensor nerves”.
Their products can detect any strain, temperature, or structural changes within structures they are embedded on or within.
Within the communications test vertical, increased data and video consumption is pushing the need for more accurate measurements to accommodate higher speeds. Their products provide unprecedented visibility at the component level and within short-haul networks, such as data centers, to ensure speed and accuracy.
Luna’s Strategic Vision and Goals for the Future
Luna has a rich tradition of working in close collaboration with its customers to develop the products that meet and exceed their clients’ needs for sensing, test & measurement, monitoring and control solutions. Together with sales, product marketing and engineering, their highly experienced team is always working to not only update and continuously improve their current product offerings, but to develop products for the future needs of its customers.
Mr. Graeff says, “When I was appointed CEO, one of my biggest challenges was to clean up the Luna story. To do that, I focused on what we do best –fiber. We believe we have a technology wrapped around fiber that is proprietary, cutting-edge, and unprecedented”.
As a result, Mr. Graeff divested some of Luna’s non-core businesses and acquired some that fit within its core focus. Now with a clearly defined vision, “to enable the future with fiber”, Luna is poised for growth, both organically and inorganically.
Luna plays in attractive, growing markets, including military and defense, communications, infrastructure, energy and automotive. With its industry-leading products, it is positioned to take advantage of mega-trends within these markets, such as lightweighting and increased demands on data centers and broadband capacity. By leveraging core capabilities in these larger market opportunities, developing long-term relationships with customers, similar to its partnership with Lockheed Martin in support of the F-35 program, and focusing on creating recurring revenue streams, Luna will continue to drive revenue growth and profitability for its shareholders. “For Luna, part of our success will come when our technology is further adopted and our products become specified into the manufacturing lines, like the F-35. Fiber is the future!”, says Mr. Graeff.
Luna’s Strengths over Competitors
What Luna does with fiber, both in terms of classic test and measurement and on the sensing side where the fiber is used as the sensor itself, is unique. In early 2018, shortly after Mr. Graeff became CEO, Luna committed to a strategy of focusing on fiber. Since then, Luna has done significant restructuring, both divesting non-core assets and acquiring core assets, to position Luna as a pure play in fiber. “Our potential is significant, and we believe that we are in the midst of a market shift that continues to accelerate the adoption of the capabilities that Luna provides”, says Mr. Graeff. Increasingly, they are seeing true market pull; every significant player realizes the impact of incorporating optical fiber sensors into their products and are contacting Luna as potential customers and partners. In 2023 and beyond, Luna looks to continue new product developments and to strengthen its strategic partnerships.
Foreshadowing on the current and Upcoming Challenges in the Industry
The fiber industry, like every other industry, must put forward a strong value proposition and build a strong, positive culture to attract and retain the talent it needs. Additionally, like many industries, Luna is faced with supply chain challenges, rising prices and component obsolescence. However, Luna’s purchasing department continues to work diligently to source the products the company needs at a fair price, while its engineers redesign around any components no longer available to combat these challenges. Luna aims to be as flexible as necessary to meet the changing dynamics of the current environment to continue to deliver to expectations. Mr. Graeff says, “We believe very strongly in the potential of Luna’s future opportunities and that our compelling business model will allow us to drive robust growth, both organically and inorganically”.
A Leader’s Way to Deal with Empathy and Vulnerability
Mr. Graeff believes that Luna’s people are its most important competitive advantage. Having led the team through an unprecedented global pandemic, Luna learned that maintaining regular and transparent communication was critical. “By sharing our own struggles and actively listening to others, we are able to shift perspectives and better understand what drives and motivates one another. This is the key to building lasting, trusting relationships”, says Mr. Graeff.
The Key to Deal with Disagreement and Criticism
“Communicating clearly and frequently, ensuring a constant focus on Luna’s vision, mission and values, is of great importance”, says Mr. Graeff. He spends a great deal of time on the road to be in-person in each of Luna’s offices to share time with the employees so to encourage that open and honest communication and keep that feedback loop going.
The Value of Client Feedback and Customer Satisfaction
“Both for me and my team, it’s imperative to stay in close touch with customers to ensure an open conduit for discussion and feedback”, says Mr. Graeff. Luna has always had a practice of working closely with customers to understand their pain points and where Luna can productively and efficiently help to alleviate them.
Advice to Aspiring Young Businesspeople
When asked for some advice for aspiring young people, Mr. Graeff said, “Some of the best advice I’ve received is an oldie but a goodie and that is to say what you mean, mean what you say and do what you say you’ll do. It doesn’t behoove me or the company to overpromise and underdeliver. I try to let transparency be my guiding principle when I announce goals and drive towards them”.