Commercializing Technology

Business Plans

Perceptions Rule

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: Investors

are always looking for companies with an edge. Patented technology

can often provide the edge to differentiate a company from current

and potential competitors. Written agreements with employees specifying

that their work product belongs to the company is essential. Particularly

for technology companies, protecting intellectual property is a top

legal priority.

Clear customer contracts with liability limitations: One

of the first items a lawyer should look at is a company’s core, everyday

form of business contracts. More civil disputes involving emerging

companies arise out of ambiguity in the terms of these agreements

than an absolute failure of one party to perform. The failure to include

a liability limitation clause in an agreement can cause a simple employee

mistake to bankrupt a company.

Determine relationships among business owners: The absence

of a clear written understanding among the owners of an emerging company

can turn a death, divorce, or departure of an owner into a very expensive

experience that can destroy a company.

Employment policies: As a business grows, the company’s

employment practices become increasingly important. A company can

limit much of its potential exposure by specifying in writing to employees

that they are employees at will who can be terminated by the company

at any time for any or no reason, as long as it is not an illegal

reason. Legal advisors should be able to advise a company as to which

anti-discrimination and other employment statutes apply to it, particularly

as the number of employees increases.

Lawyers serving emerging companies, says Cohen, should consider several

strategies to give the young company the most bang for the buck:

Determine meaningful limits for projects: If company management

simply turns a contract or issue over to counsel with instructions

to "handle it" without further instructions, lawyers have

been trained to identify all of the potential risks and liabilities

and to take the time to draft and negotiate each of these concerns.

While this may be the appropriate role in certain situations, for

a fraction of the cost lawyers could simply identify issues for the

business people and draft revised language only for the items required

to be changed.

Respond rapidly: One advantage of the emerging company

is its ability to move more swiftly and less expensively than its

more established competitor. When making business decisions, management

needs counsel to advise them regarding key legal issues and potential

pitfalls, as well as to point out areas which require clarification

to avoid a future costly dispute. A reply from legal counsel within

one or two business days can give the emerging company the advantage

it needs to negotiate the best business deal for the company.

Encourage communication: Most legal solutions to business

problems can be communicated in a phone call with a company manager

at the beginning of a project or dispute. Legal representation becomes

ineffective if a company manager is too worried about the cost of

a call or frustrated by lack of responsiveness to previous calls to

provide the facts that lead to sound legal advice.

Use technology to meet goals: Communication by fax and

encrypted E-mail now allow for immediate communication, allowing the

company to complete the sometimes time-consuming negotiations and

finalization of documentation at minimal cost.

Top Of Page
Commercializing Technology

A lot of good technology that is being developed does

not make it to the marketplace, says Susan Caputo. "In the

path of commercialization it gets lost along the way." Her new

firm, New Technology Horizons LLC, based in Dayton, focuses on advancing

new technologies in the marketplace by aligning small, technology-rich

entrepreneurial-driven companies with major corporations.

"I think I am filling a void," says Caputo. "There is

great technology out there and major corporations with the resources

to utilize them." Caputo graduated from Rider University in 1986,

and went to work for the Manhattan advertising firm, Bozell. She shifted

briefly to the brokerage industry, and then returned to advertising

by 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 State

Road, a company that provides alternative methods to commercialize

business technology. She ran the marketing department, and established

the company’s public relations initiatives. Caputo also worked in

the admissions area and at corporate partnering. She then served as

manager of the Technology Help Desk at 100 Jersey Avenue, where she

counseled start-up businesses.

Susan Caputo and her husband, Steven Caputo — also in the

entrepreneurial consulting field — have two children under four

years 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 entrepreneurs

with good technology who cannot afford these services otherwise, says

Caputo, who helps file patents, makes sure the technology is protected

and demonstrable, and helps form strategic alliances with major corporations.

"In small companies, the CEO is responsible for everything from

developing technology to changing the light bulb," says Caputo,

"and they do not focus enough on the marketing side. Developing

and marketing must be done simultaneously." While the companies

concentrate on developing technology, Caputo says her job is to get

attention for them.

Caputo seeks to present the small company as a business opportunity

for major corporations. The first step is to package the small company

in the way the big company wants to see it, says Caputo. The next

step is finding the right corporate partner for the company, getting

into the door, and building a relationship so that both companies

get what they need. And finally, getting local and national media

attention. "What I offer is very unique out there in the industry,"

says Caputo. "I offer the three components, marketing, business

development, and the public relations, in one."

Caputo believes, as the name of her company denotes, that there is

a lot of new and great technology on the horizon. "I am good at

building relationships and managing them. I find out what companies

need, and make sure both companies are happy," says Caputo. "And

I have fun doing it as well."

— Teena Chandy

Top Of Page
Business Plans

For Young Firms

Before you can convince an investor or lender to finance

your growth, you need a business plan founded on a solid business

strategy, says Lisa M. Hines, president of Business Plan Concepts

Inc., 609-530-0719

(http://www.bizplanconcepts.com).

"Your business plan must demonstrate the strength of your market

opportunity and the potential for financial success. It must speak

directly 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 that

he or she will be most interested in.

2. Start with an outline to organize your thoughts.

3. Create and execute summary that thoroughly, but very

concisely, conveys all the important features of your business.

4. Avoid "fluff" and superlatives. Use professional

language.

5. Show that you are knowledgeable about your market and

know how to reach it.

6. Show that you have conducted the market research to

back up your claims.

7. Don’t dismiss your competition. Every business has

some form of competition.

8. Use pictures, charts, tables, and bullets for clarity

in the presentation.

9. Include a table of contents to help the reader follow

along and get to those sections that interest him or her the most.

10. Have someone — a friend or a colleague who is

a good writer, a professional writer, or an advisor — review the

document for grammar, spelling, clarity, and organization. The quickest

way to create a negative impression is to present a business plan

full of errors.

One way to write an excellent business plan is to get the Biz

Planner, a workbook and matching spreadsheet template diskette that

sells for $10. Call 609-586-4800, extension 3469, or mail remittance

to: MCCC-SBDC, Box B, Trenton 08690. Add $5 if you are requesting

it by mail.

Top Of Page
Perceptions Rule

Simply building the best mousetrap no longer guarantees

instant success in today’s market. You have to make certain that your

advertising speaks directly to the mouse-hunting public — in words

they can immediately relate to — or even the finest mousetrap

will fail to find its niche. "The fact is, virtually all major

products are good products," says Rudy Nardelli, "because

bad products simply don’t survive in the market place. But better

doesn’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 "Developing

a Strategic Marketing Plan" in a presentation for the Sales &

Marketing Peer Track of the New Jersey Technology Council (NJTC) on

Tuesday, February 16, at 8:30 a.m., at Dialogic Corporation, 1515

Route 10, Parsippany. Cost: $30. Call 609-452-1010.

Bob Hinkle, director of product marketing for Dialogic, will

talk about how to identify company strengths while developing a strategic

marketing plan.

Charlie Decker of Decker Research Associates,

will discuss some specific considerations when using research in the

planning process.

Nardelli majored in marketing at New York University (Class of 1964)

and served more than 25 years in senior ad agency account management

and as department head in marketing and research. He was on the original

team for the I Love New York campaign, and worked for such agencies

as McCann Erickson, Ogilvy, and Wells (now WWT). As a marketing consultant

his assignments have included work in publishing online media (America

Online), new media (Healthcare Satellite Broadcasting), and promotion.

He believes that the bottom line for even the best and most realistic

strategic marketing plans won’t be realized unless the advertising

developed as the final "creative translation" of that plan

follows 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. "Although

the strategic plan is based on a product’s reality — its demos,

its trends, its strengths, its weaknesses — the creative translation

of that plan is not necessarily based on that. It’s based, instead,

on the prospect’s perception of the product." The perception may

have less to do with the product’s attributes than on how customers

perceive its strengths. "Reflect how your prospects perceive those

strengths."

Many businesses, he believes, undervalue the competitive edge generated

by effective communication. He says it is a measurable advantage.

"A 500 percent advantage is reasonable when you get into print

ad readership scores," he says. "The difference between the

best 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 have

an incredibly higher chance of getting a much more productive return

on the same investment."

Use common sense rules: "You get readership by being informative,

believable, relevant, clear. How many times have you seen an ad and

asked, `What the hell are they selling?’"

Does your headline grab them? Eighty-five percent of the

total attention the average reader gives to an ad is given to the

headline and illustration.

Does it have news? Copy that can address the consumer’s

needs 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 current

ads:

Copy that is too obtuse or complex.

Information buried — sometimes the product itself

buried — in the copy.

Attempts to be cute rather than informative. "People

aren’t spending time reading through things they don’t understand.

"Entertaining is good," he says, "but entertaining

is terrible in business because it doesn’t make you more favorably

disposed to buy a product. In the Super Bowl, for example, so many

of the commercials were just entertaining. But when you try to bottom

line it, I’m not sure that many of these commercials were able to

make new people want to buy the product. This is where you get into

understanding the perception of the product."

— Tricia Fagan


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