Corrections or additions?
These articles by Bart Jackson and Barbara Fox were prepared for
the July 10, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Stretching the Broad Bands
Broadband cable was to set us free. Daily, the
laborsaving
computer enslaved hours of our lives. We tended it. We awaited its
performance as pixel-by-pixel visions snailed onto our screens. Then
Zap! Broadband connections instantaneously turned computers back into
our tools, serving up words an images with blazing speed. So why
haven’t
more businesses taken advantage of cable? And what — beyond sheer
speed — does the extra cable fee provide?
Garden State business people seeking to learn the full range of
current
and future services will want to attend the seminar “Broadband
Cable, Ready and Accepted,” a New Jersey Technology Council event
on Thursday, July 11, at 4 p.m. at Sarnoff. Cost: $70. Call
856-787-9700.
Karen Anderson, president of the New Jersey Telecommunication
Association speaks, as do representatives from regional cable
companies.
Technically, broadband refers to any telecommunication capable of
supplying multiple channels over a single medium. Full federal
broadband
lines are designated as those with a carrying capacity of over 200
Kbps (kilobits per second) in both directions. Compared with standard
dial up services, traveling over copper phone wires, broadband
provides
faster service, and enables high quality audio and video
transmissions.
Digital Subscriber Lines (DSL) provide much of this high-speed,
high-bandwidth
capability via existent telephone lines. DSL has the advantages of
a wire system that reaches nearly everywhere, with data traveling
on a line dedicated to the subscriber alone, which enhances security.
The cable modem services provide a bandwidth shared by the subscriber
and his neighbors, which means speed varies at peak hours. But in
general, oh boy, is that cable modem faster — a lot faster. For
that reason alone, cable companies are expanding territories madly,
expecting a national total of 20 million customers by 2004.
“Yet despite this strong continual growth, especially in New
Jersey,
businesses have been surprisingly slow to take up the cable
advantage,”
says Anderson. The primary culprit, she explains, is television. While
the cable TV revolution has strewn coaxial lines into residences by
the millions, few businesses had a reason to put 109 channels on the
jobsite. Based on customer supply, cable companies began leap-frogging
from neighborhood to neighborhood, bypassing local industrial parks.
For the past four years Anderson has been laboring to stem this tide
on the service, pubic awareness, and legislative fronts. Growing up
amid Manhattan’s frenzied pace, Anderson attended Brown University,
graduating with a bachelor’s in sociology. For the past decade, she
has worked as a shaper of public policy working for such firms as
Ogden Energy. As president of the New Jersey Telecommunications
Association,
she represents four of the state’s seven cable providers as they
expand
both in area and in services.
In addition to overcoming cable’s residential-only misconception,
the system’s very speed often serves to blind business customers to
its other capabilities. “Everyone thinks `Cable — Oh yes,
fast e-mail, quick pictures,’” says Anderson, “and the
business
advantages get dismissed.” A host of business packages currently
exist and more lie on the drawing boards. Senator Joseph Lieberman’s
recently proposed additions to the proposed Broadband Strategy Act
of 2002 call for nationwide accessibility and vastly increased
research
fundings for cable enhancement. Some of the offerings worth pursuing
with your local provider include:
Telephony. Not here yet, but Anderson assures us, veryclose to resting in our palms. Your current telephone capabilitieswill join with your Internet protocol. You will use one line for datatransfer and phone calls; you’ll be able to make transfers eitherway, all at the faster cable modem speed — and at a lower cost.Web hosting and networking. Basically, bigger, fasterand even cheaper claims Comcast Information Specialist KevinAnderson.of the power of cable. Cable modems afford their business customersa minimal 100 megabyte website. The higher speed allows more graphics,a greater number of rapid links, and even video capabilities thatwon’t have your clients grinding their teeth waiting for your message.Cable lines currently handle networks for up to 200 stations at thenear instantaneous rate of 2 megabits of data per second. This isfast enough to handle an almost limitless load of communication withinyour firm.E-mail and voice messaging. Typically, New Jersey cablecompanies offer business customers two domain names as E-mail logos.Voice-produced messages for both incoming and outgoing contacts areavailable at a competitive rate due to the cable’s enhanced capacity.Yet for the business owner, the cable question remains: “How doI get the line cheaply into my shop?” Cable owners claim GardenState markets are saturated, but most of this drenching remainsresidential.Even for a firm only five miles from the nearest line, getting thecoaxial into his area can demand Himalayan efforts — and costs.While the seven broadband cable servers in New Jersey do cover eachregion of the state, many niches remain unaccessed due to set-up cost.A quick call to the Board of Public Utilities’ special cableservice number (973-648-2670) can help you determine which cable firmis nearest and which others may service your area. Typically, serverswill refuse, at first, to string a line any distance for a singlecustomer. But more and more private businesses are uniting to bringcable into the remaining unserved neighborhoods, and initialinstallationfees are dropping.Bart JacksonTop Of PageYou Want How Much?The age of acquisition definitely lies amouldering.Just as investors are sniffing askance at eager new startups, theyare equally pulling back from those mature businesses that aredesperatelywaving the sign “Brought to Fruition and Ripe for Sale.” Asan owner with a firm to sell, you cannot change this general trend,but there is much you can do to enhance your company’s value beforeyou place it on the block.Investors, owners, and potential buyers trying to get a grip on thebusiness of selling a business may glean great advice from a VentureAssociation of New Jersey meeting on “Valuation: How to IncreaseYour Business’ Worth” on Tuesday, July 16, at 11:30 a.m. theWestinHotel in Morristown. Cost: $45. Call 973-267-4200 or visitwww.VANJ.comSpeaker Jim Gunton, general partner and founder of the NewJerseyTechnology Council Venture Fund, discusses the differing perspectivesof buyer and seller, along with certain specific steps owners cantake to avoid having their firms diluted.”Seldom is the sale of a business all a matter of money,”says Gunton. “Frequently the entrepreneur will bring his firmfor sale or public offering just to get his sanity back. One can getawfully tired after three years of endless 18-hour days.” Anentrepreneuras well as venture capitalist himself, Gunton has played the gameon both coasts for years. Following a childhood on the outskirts ofPhiladelphia, Gunton went west to attend Stanford University, wherehe earned a degree in applied math. After he graduated he became aprincipal in several Silicon Valley firms over a 10-year period.Coming back East in l994, Gunton again took the capitalist reins andbegan investing in Garden State firms. “Silicon Valley wasincrediblyfast paced,” he admits, “but I find the world of Northeastinvestment more intriguing.” A Lawrenceville resident, Guntonoversees the NJTC Venture Fund, which he formed in 2000. Last yearthe fund dispensed over $75 million in early stage capital, primarilyto startup high-tech and pharmaceutical firms.”Probably the most important, yet most overlooked, item in sellinga company is realizing exactly what you want out of the deal,”says Gunton. Many an owner goes into the sale with vague notions suchas “well, it’s time,” or “seems like a good marketnow,”but that’s not nearly enough, insists Gunton. A good seller examineswhat she wants as well as what every other interested party wantsto take away from the table.A matter of perspective. Frequently the entrepreneur/owneris seeking to build and sell an industry leader. He wants to put hisproduct’s best gear forward. Basically this is a good idea, but hemust remember that his business’ initial investors primarily wantto build an object with high acquisition potential. One person iscreating a car to run fast and durably, while the other is buildingan auto to sell. These conflicts have to be ironed out well beforeany initial feelers are made.Staffing. The first whiff of acquisition will in allprobabilitysend most employees diving for their resumes, anxious to take theirskills into more secure pastures. This could prove disastrous, notonly to the seller’s image, but also to the very health of thecompany.Actually, in most cases, everyone wants the same thing. Staffers wantto keep their jobs. Sellers want to have their firm sold intact andthe acquirer wants the continuity of employment. Thus one of theseller’svery first steps should be to instill a sense of permanency in hisworkforce. Regranting stock options along with setting up a systemof staying bonuses can help encourage your employees and make themfeel that their best future lies with this company, despite the changeof ownership. Whatever plans you make, they must be implemented beforethe rumor mill begins churning.Accounting. Nothing can make a company so alluring asa well shaped set of books. Yet how to present items in a methodattractiveto the outside acquiring investor? Should revenue be booked up front?Should research and development costs be listed as expenses or slowlywritten off over time. Gunton’s rule is “mirror the industrystandards.”Study competitors and find what similar, successful firms doing.Typically,a tacit consensus has been reached on accounting practices, withouta lot of talk. These practices may not always be the best for yourfirm, but they probably aren’t terribly destructive and they are ina language your acquirer will understand.New products. “Here,” says Gunton, “lies themillion dollar question — literally.” The seller needs todetermine whether it is fiscally wiser to develop the technology,present a prototype, then sell swiftly to the highest bidder, or toexpand into sales, and auction the entire package off for a realbundle.This is what Gunton calls the natural chasm in business sales.Baron Rothschild gave the advice that fortunes are made bybuyinglow and selling too soon. And since the Baron, mountains of caveatsfrom thousands of pundits have labored to sway entrepreneurs eitherway. Gunton’s personal view is that the only way to hurdle thisuncertainchasm is to return to the first step and review exactly what you wantto take away from the sale of your firm. Of course, the owner’s breakfrom his creation does not have to be total. Many a sharp entrepreneurhas negotiated a vice presidency in charge of technology anddevelopmentfor herself on the term sheet.As a final warning, Gunton adds the old and wise rule: keep it simple.”A difficult, complex presentation of terms is an instant turnoff to even the brightest of investors,” he says.— Bart JacksonTop Of PageTrade Show WinnerWhen Bill Hogan began his sales career at IBMin the late-1960s, that company had a 90 percent market share. “Itwas the same with Xerox,” Hogan recalls. “They had about a90 percent market share.” IBM had an excellent training program,but, he acknowledges, it didn’t take a whole lot to make a sale fora company with that kind of market share.It’s a new world for sales.”We don’t even trust the clergy,” says Hogan. “Where doesthat put salesmen in the food chain?”Hogan, who left IBM after 15 years to start his own business, isfounderof the Hogan Leadership, a management and consulting business withoffices at 2 Carnegie Road in Lawrenceville. While selling has becomemore difficult, he says, it has become more vital, and not just inthe traditional sense. Sales, says Hogan, founder of the HoganLeadershipGroup, filters through to every part of the organization.On Wednesday, July 17, at 8:15 a.m. Hogan speaks on “Trade FairSales and Marketing” at the Chamber of Commerce of the PrincetonArea at the Nassau Club. Cost: $24. Call 609-520-1776. LarryHollander,president of the Entrepreneurial Management Group, also addressesthe subject.Hogan, who did his undergraduate work at Montclair State, spent theearly part of his career teaching math. His real love during thoseyears, though, was coaching. Among his coaching jobs was a four-yearstint — 1969 to 1973 — at Notre Dame High School in Lawrence.His job with IBM included an assignment as sales manager of thecompany’sTrenton office. After a three-year assignment at headquarters, inArmonk, he decided to return to central New Jersey and open his ownbusiness.Most of Hogan’s clients are small businesses, which he defines asstart-up through $10 million in annual sales. He doesn’t cater toany particular industry niche, because, he says, at its core allbusinessis the same. Whether it is promoting a product, attracting VC money,or hiring a star, the key task is sales.He finds, however, that sales often is way low on a young company’slist of priorities. “Everybody works with accountants andlawyers,”he says, “but there is still the feeling that `my product is sogood, people will buy it.’” The start-up will have brochuresprinted,and will take out an ad or two, but it often neglects selling.Not only should sales be a major focus for small companies, but, saysHogan, the founder should be the person who is out there selling.”Think of the psychology,” he says. Potential clients,businesspartners, and funders react differently when the sales card they arebeing handed says “CEO” than they do when the card says”salesrepresentative.”Trade fairs afford top management a valuable sales opportunity. Manypotential clients and business partners gather under one roof, andfunders may well be circling around as well. Reporters, on the lookoutfor news, also are in attendance, offering the possibility of freepublicity. Make the most of trade fair day, says Hogan, suggestingthe following strategies:Know why you are there. Preparation should begin wellbefore the first visitors enter the exhibition hall. Think throughthe company’s reason for attending, and plan staffing, training, andhand-outs around what the company hopes to accomplish.Get as good as you give. Sometimes the only reason toattend a particular fair is to brand the company. If that is the case,prepare effective materials, build an impressive booth, and use itas a base to hand out brochures, pens, and T-shirts. Generally, thisis not enough. In most cases, it is a good idea to use the trade fairas a chance to gather information as well as to hand it out.Ask four questions. Key information can be elicited byasking those who stop by the booth: Do you currently use my product,or have you used it in the past? What is your experience with it?Whose product are you using now? What reason would you have forswitching?In addition to yielding specific information, these questions willseparate genuine prospects from the folks roaming the aisles withthe sole goal of filling their plastic bags full of logo pens,frisbees,and T-shirts.Do lunch. A trade show, says Hogan, is a good place toget some time with elusive prospects. Well beforehand, call and inviteone to lunch, one to tea, and one to dinner. You know they will bethere, and may be receptive.Keep the day going. A trade fair may occupy only one day,but it offers an opportunity to schedule post-fair appointments. Tryto make as many business dates as possible, and where it isn’tpossibleto nail down a prospect on the spot, be sure to get his business card,and to record the information soon after returning to the office.Roam around. The boss should not be in the booth, saysHogan. The founder, and perhaps other members of top management,shouldbe out and about, scouting the competition. He sees nothing wrongwith leaving the booth to handsome/beautiful young people, the typesmost likely to attract visitors. But, he stresses, it is vital thatthese booth staffers, who do not have to be company employees, arewell trained, and instructed to get in touch with top management viacellphone if a prospect would like a word with them.Use a U. The most common trade booth configuration putsa table out in front, parallel with the aisle. Promotional materialsgenerally are put on that table. Big mistake, says Hogan. This justmakes it easy for the pen-grabbers to snatch and go. Using a U-shapedtable, and placing promotional materials at the back, forces prospectsto walk in. This gives booth staffers a chance to ask the fourquestions,and lets them give brochures and promotional materials only to seriousprospects.Hogan makes good use of a psychiatrist/patient analogy indescribingthe sales process. “Who does most of the talking?” he asks.While the answer, clearly, is the patient, he next asks “Who isin charge?” Ah ha! So, the good salesperson does a lot oflistening,but retains control. This principal should apply to a trade fair aswell as to a standard sales call. The salesperson, in this case, oftenthe CEO, needs to remain firmly in control, using the event to getthe information he wants and the appointments he needs.Top Of PageClean-up Brown To Build GreenWhile many businesses and politicians are looking onthe dark side of the McGreevey administration’s corporate tax package,others see a brighter side to the new governor’s policies. Perhapsbecause James McGreevey was mayor of Woodbridge, an urban areabeset with pollution and brownfields problems, McGreevey isfocusing more on cleanup than recent governors have been. This meansgood news for builders, says Anthony Pizzutillo, a principalat Issues Management on Poor Farm Road, who represents the NationalAssociation of Industrial and Office Properties (NJ-NAIOP).”In all my time in government I have never seen an administrationmore responsive to the needs of urban revitatliztion and brownfieldsredevelopment,” says Pizzutillo.The NAIOP hosts Bradley M. Campbell, the new commissioner ofthe New Jersey Department of Environmental Protection, on Wednesday,July 17, from 8 to 11 a.m. at the East Brunswick Hilton. FollowingCampbell’s keynote, Pizzutillo speaks on a panel moderated by DavidT. Houston Jr., president of Colliers Houston & Co., which willrespond to the commissioner’s speech and estimate the impact of DEP’splans on the commercial real estate industry. Other panelists areAnthony DiLodovico, vice president at Schoor DePalma Inc. andDennis Toft, an attorney at Wolff & Samson. Cost: $85. Call201-998-1421 (www.njnaiop.org).Campbell will discuss the restructuring of his department, thechallengesand opportunities facing New Jersey’s policy makers, brownfields,and site remediation redevelopment issues. He will also talk aboutsuch water issues as allocation permits, drought restrictions andwatershed management planning, wetlands, smart growth, andenvironmentalequity.”This type of open communication with state agencies, especiallythe DEP, is vital to our industry’s growth and the revitalizationof New Jersey’s older and urban communities,” says Thomas S.Michnewicz, NJ-NAIOP president.The DEP commissioner majored in history at Amherst College, Classof 1983, and went to the University of Chicago Law School. From 1990to 1994 he was an attorney-advisor for the U. S. Department ofJustice,Environment and Natural Resources Division. When Clinton appointedhim to be the EPA’s regional administrator for the mid-Atlanticregion,he addressed lead contamination in Philadelphia schools, worked onsmart growth pilot projects, and negotiated agreements to strengthenprotection of the Chesapeake Bay and to protect New Jersey’s coastlinewithout hampering port development. Currently, Campbell is a visitingprofessor at University of North Carolina’s Law School.As the son of a Cherry Hill-based home builder, Pizzutillo was apoliticalscience major at Villanova, Class of 1975, and has a master’s inpublicpolicy from the Eagleton Institute of Politics. He has worked at NewBrunswick Tomorrow, Middlesex County Planning Board, on Dick Leone’scampaign for the United State Senate, and for the New Jersey Builder’sAssociation. A founder of Issues Management, the 15-year-old publicaffairs consulting group on Poor Farm Road, he has been representingNAIOP for five years.Pizzutillo’s finger prints are on important legislation. What he isworking on now are plans to reallocate funds from the undergroundstorage tank program (which is virtually completed) to hazardousdischargecleanup (which has insufficient funds). Another measure would speedpayback to developers that have cleaned up brownfields. The mostunusualis a plan to sell tax credits based on remediation costs tocorporations,a plan that is similar to one now used by technology companies whoare not making a profit. “Developers don’t pay a corporatebusinesstax, so they sell the tax credits to a big corporation to expeditethe financing,” he says.Previous administrations had other interests, he points out. GovernorChristie Whitman’s environmental focus was open space. “As themayor of an urban area,” says Pizzutillo. “Governor McGreeveygot a first hand look at how brownfields development can be successfuland how it can work.”Brad Campbell is familiar with the issues and will present somevery creative ideas,” he says. “If the market exists, thesemoves will encourage the market to start translating some contaminatedsites to useful areas. It could be a very exciting time.”— Barbara FoxNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
