Corrections or additions?
Help for Young Hi-Techs
This article was published in U.S. 1 Newspaper on February 10, 1999.
An emerging company needs legal advice on a regular
basis, but does not desire comprehensive `Cadillac’ legal service
on every contract, dispute resolution, or legal advisory function,”
says Steven M. Cohen, a partner at Morgan, Lewis, & Bockius
LLP. “The management of an emerging company must prioritize the
company’s business goals and communicate those goals to the company’s
advisors.”
Cohen, who manages the emerging business practice at the firm’s Carnegie
Center office, points out the common issues legal advisors should
identify to an emerging company’s management at the outset of the
lawyer/company relationship:
Protect intellectual property used by business: Investorsare always looking for companies with an edge. Patented technologycan often provide the edge to differentiate a company from currentand potential competitors. Written agreements with employees specifyingthat their work product belongs to the company is essential. Particularlyfor technology companies, protecting intellectual property is a toplegal priority.Clear customer contracts with liability limitations: Oneof the first items a lawyer should look at is a company’s core, everydayform of business contracts. More civil disputes involving emergingcompanies arise out of ambiguity in the terms of these agreementsthan an absolute failure of one party to perform. The failure to includea liability limitation clause in an agreement can cause a simple employeemistake to bankrupt a company.Determine relationships among business owners: The absenceof a clear written understanding among the owners of an emerging companycan turn a death, divorce, or departure of an owner into a very expensiveexperience that can destroy a company.Employment policies: As a business grows, the company’semployment practices become increasingly important. A company canlimit much of its potential exposure by specifying in writing to employeesthat they are employees at will who can be terminated by the companyat any time for any or no reason, as long as it is not an illegalreason. Legal advisors should be able to advise a company as to whichanti-discrimination and other employment statutes apply to it, particularlyas the number of employees increases.Lawyers serving emerging companies, says Cohen, should consider severalstrategies to give the young company the most bang for the buck:Determine meaningful limits for projects: If company managementsimply turns a contract or issue over to counsel with instructionsto “handle it” without further instructions, lawyers havebeen trained to identify all of the potential risks and liabilitiesand to take the time to draft and negotiate each of these concerns.While this may be the appropriate role in certain situations, fora fraction of the cost lawyers could simply identify issues for thebusiness people and draft revised language only for the items requiredto be changed.Respond rapidly: One advantage of the emerging companyis its ability to move more swiftly and less expensively than itsmore established competitor. When making business decisions, managementneeds counsel to advise them regarding key legal issues and potentialpitfalls, as well as to point out areas which require clarificationto avoid a future costly dispute. A reply from legal counsel withinone or two business days can give the emerging company the advantageit needs to negotiate the best business deal for the company.Encourage communication: Most legal solutions to businessproblems can be communicated in a phone call with a company managerat the beginning of a project or dispute. Legal representation becomesineffective if a company manager is too worried about the cost ofa call or frustrated by lack of responsiveness to previous calls toprovide the facts that lead to sound legal advice.Use technology to meet goals: Communication by fax andencrypted E-mail now allow for immediate communication, allowing thecompany to complete the sometimes time-consuming negotiations andfinalization of documentation at minimal cost.Top Of PageCommercializing TechnologyA lot of good technology that is being developed doesnot make it to the marketplace, says Susan Caputo. “In thepath of commercialization it gets lost along the way.” Her newfirm, New Technology Horizons LLC, based in Dayton, focuses on advancingnew technologies in the marketplace by aligning small, technology-richentrepreneurial-driven companies with major corporations.”I think I am filling a void,” says Caputo. “There isgreat technology out there and major corporations with the resourcesto utilize them.” Caputo graduated from Rider University in 1986,and went to work for the Manhattan advertising firm, Bozell. She shiftedbriefly to the brokerage industry, and then returned to advertisingby joining Crawford Fenton, the Somerville-based advertising agency,where she did new business development and business to business advertising.In 1993 Caputo joined Technology Management and Funding (TMF) on StateRoad, a company that provides alternative methods to commercializebusiness technology. She ran the marketing department, and establishedthe company’s public relations initiatives. Caputo also worked inthe admissions area and at corporate partnering. She then served asmanager of the Technology Help Desk at 100 Jersey Avenue, where shecounseled start-up businesses.Susan Caputo and her husband, Steven Caputo — also in theentrepreneurial consulting field — have two children under fouryears old. She founded New Technology Horizons earlier this year (732-274-1947;fax, 732-274-1948, E-mail: caputos@erols.com.New Technology Horizons provides management services to entrepreneurswith good technology who cannot afford these services otherwise, saysCaputo, who helps file patents, makes sure the technology is protectedand demonstrable, and helps form strategic alliances with major corporations.”In small companies, the CEO is responsible for everything fromdeveloping technology to changing the light bulb,” says Caputo,”and they do not focus enough on the marketing side. Developingand marketing must be done simultaneously.” While the companiesconcentrate on developing technology, Caputo says her job is to getattention for them.Caputo seeks to present the small company as a business opportunityfor major corporations. The first step is to package the small companyin the way the big company wants to see it, says Caputo. The nextstep is finding the right corporate partner for the company, gettinginto the door, and building a relationship so that both companiesget what they need. And finally, getting local and national mediaattention. “What I offer is very unique out there in the industry,”says Caputo. “I offer the three components, marketing, businessdevelopment, and the public relations, in one.”Caputo believes, as the name of her company denotes, that there isa lot of new and great technology on the horizon. “I am good atbuilding relationships and managing them. I find out what companiesneed, and make sure both companies are happy,” says Caputo. “AndI have fun doing it as well.”– Teena ChandyTop Of PageBusiness PlansFor Young FirmsBefore you can convince an investor or lender to financeyour growth, you need a business plan founded on a solid businessstrategy, says Lisa M. Hines, president of Business Plan ConceptsInc., 609-530-0719(https://www.bizplanconcepts.com).”Your business plan must demonstrate the strength of your marketopportunity and the potential for financial success. It must speakdirectly to the issues of interest to investors or lenders.”A successful business plan, says Hines, should clearly convey:1. The nature of your business.2. Short term and long term objectives.3. Your target market — show there is a real need.4. Competition and your competitive advantage.5. How you will market to your customers.6. Products and services — the key benefits.7. Forecast the financial performance.8. The management team’s capabilities.9. Your day to day operations.10. Discuss the risks.Hines also offers ten tips for writing a business plan:1. Know your reader and speak directly to the issues thathe or she will be most interested in.2. Start with an outline to organize your thoughts.3. Create and execute summary that thoroughly, but veryconcisely, conveys all the important features of your business.4. Avoid “fluff” and superlatives. Use professionallanguage.5. Show that you are knowledgeable about your market andknow how to reach it.6. Show that you have conducted the market research toback up your claims.7. Don’t dismiss your competition. Every business hassome form of competition.8. Use pictures, charts, tables, and bullets for clarityin the presentation.9. Include a table of contents to help the reader followalong and get to those sections that interest him or her the most.10. Have someone — a friend or a colleague who isa good writer, a professional writer, or an advisor — review thedocument for grammar, spelling, clarity, and organization. The quickestway to create a negative impression is to present a business planfull of errors.One way to write an excellent business plan is to get the BizPlanner, a workbook and matching spreadsheet template diskette thatsells for $10. Call 609-586-4800, extension 3469, or mail remittanceto: MCCC-SBDC, Box B, Trenton 08690. Add $5 if you are requestingit by mail.Top Of PagePerceptions RuleSimply building the best mousetrap no longer guaranteesinstant success in today’s market. You have to make certain that youradvertising speaks directly to the mouse-hunting public — in wordsthey can immediately relate to — or even the finest mousetrapwill fail to find its niche. “The fact is, virtually all majorproducts are good products,” says Rudy Nardelli, “becausebad products simply don’t survive in the market place. But betterdoesn’t guarantee success, because `better’ is based on buyer perception,and perception is heavily determined by communications.”Nardelli is one of three industry experts speaking on “Developinga Strategic Marketing Plan” in a presentation for the Sales &Marketing Peer Track of the New Jersey Technology Council (NJTC) onTuesday, February 16, at 8:30 a.m., at Dialogic Corporation, 1515Route 10, Parsippany. Cost: $30. Call 609-452-1010.Bob Hinkle, director of product marketing for Dialogic, willtalk about how to identify company strengths while developing a strategicmarketing plan.Charlie Decker of Decker Research Associates,will discuss some specific considerations when using research in theplanning process.Nardelli majored in marketing at New York University (Class of 1964)and served more than 25 years in senior ad agency account managementand as department head in marketing and research. He was on the originalteam for the I Love New York campaign, and worked for such agenciesas McCann Erickson, Ogilvy, and Wells (now WWT). As a marketing consultanthis assignments have included work in publishing online media (AmericaOnline), new media (Healthcare Satellite Broadcasting), and promotion.He believes that the bottom line for even the best and most realisticstrategic marketing plans won’t be realized unless the advertisingdeveloped as the final “creative translation” of that planfollows some very basic principals.When you are laying out the elements of your strategic plan, he advises,don’t concentrate solely on your product’s attributes. “Althoughthe strategic plan is based on a product’s reality — its demos,its trends, its strengths, its weaknesses — the creative translationof that plan is not necessarily based on that. It’s based, instead,on the prospect’s perception of the product.” The perception mayhave less to do with the product’s attributes than on how customersperceive its strengths. “Reflect how your prospects perceive thosestrengths.”Many businesses, he believes, undervalue the competitive edge generatedby effective communication. He says it is a measurable advantage.”A 500 percent advantage is reasonable when you get into printad readership scores,” he says. “The difference between thebest read and the least read ad in any particular publication is incredible,actually 2,500 percent, with a practical range of 500 percent. Clearly,advertisers who can focus on the factors that get an ad read havean incredibly higher chance of getting a much more productive returnon the same investment.”Use common sense rules: “You get readership by being informative,believable, relevant, clear. How many times have you seen an ad andasked, `What the hell are they selling?'”Does your headline grab them? Eighty-five percent of thetotal attention the average reader gives to an ad is given to theheadline and illustration.Does it have news? Copy that can address the consumer’sneeds or concerns succinctly can be a winner.Is there a competitive benefit? Is your copy more interesting,more informative, more compelling than other ads?Does it offer a promise?Some common problems Nardelli observes in a random survey of currentads:Copy that is too obtuse or complex.Information buried — sometimes the product itselfburied — in the copy.Attempts to be cute rather than informative. “Peoplearen’t spending time reading through things they don’t understand.”Entertaining is good,” he says, “but entertainingis terrible in business because it doesn’t make you more favorablydisposed to buy a product. In the Super Bowl, for example, so manyof the commercials were just entertaining. But when you try to bottomline it, I’m not sure that many of these commercials were able tomake new people want to buy the product. This is where you get intounderstanding the perception of the product.”– Tricia FaganPrevious StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
