Corrections or additions?
This article by Barbara Fox was prepared for the June 12, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Life in the Fast Lane
Four years ago, the dotcom company JustBalls! was getting
loads of publicity and winning awards at venture fairs, and those
who sported the firm’s hats had to defend them from being snatched.
The founder, Jim Medalia, was comparing his online sports equipment
firm with the online bookseller Amazon.com (U.S. 1, August 12, 1998).
Then came the dotcom decline, and of all the online sporting goods
companies, JustBalls! was the only one to survive. Its business plan,
however, did not. Now the website is a shell of its former shelf,
Medalia and his wife have left and are starting a new energy-related
company, and JustBalls! is running in a new direction. CEO Jim Klein,
brought in by investors two years ago, has reorganized and renamed
the firm Integrated Sports Marketing Group (ISMG).
At the time Klein joined JustBalls! he said it had a real business
model — "strip away the hype and at the end of the day there
is a real business. I’m looking forward to helping this company achieve
entirely new levels of performance."
Now he says that "the economics of an Internet retailer doesn’t
make sense. It didn’t make sense three years ago, but the market bought
it. We raised $13 million two years ago, and we are still here."
JustBalls! had started out emphasizing institutional sales and then
moved into custom licensed sports-related products for colleges and
corporations. "That model had low volume, low margin, high overhead,
and high inventory," says Klein.
He says the reconstituted business will do premium and promotion marketing,
an area that has high volume, high margins, low overhead, and no inventory
— everything is drop-shipped to Fortune 500 companies.
For this new focus Klein leveraged contacts from his
former job as president of the consumer products group for Universal
Studios, where he was responsible for the $1.5 billion merchandising
campaign behind "The Lost World" A graduate of Rutgers, Class
of 1974, he has an MBA from Columbia, (U.S. 1, August 23, 2000).
ISMG will represent Universal Music Group for the development of CD
music compilations for premium purposes, and along with that it will
do cause marketing. Universal Music Group, Klein says, is the largest
of its peers, with "a portfolio of labels and songs second to
none." He will tap this music to compile CDs for corporate marketing
purposes. You’ve seen the CDs displayed at point-of-purchase in retail
stores. Like the perfume, buy the CD.
"What makes us unique is representation rights. We represent two
of the largest and most respected causes in the United States, Special
Olympics and Big Brothers/Big Sisters," says Klein. "We link
the CD to the charity with a donation mechanism. To encourage impulse
buying, the ideal cost for such an album is $9.99, but they can run
from $5 to $17.
JustBalls! started out with major funding from a prestigious VC, David
S. Wetherell, chairman and CEO of Massachusetts-based CMG Information
Services and holder of majority stakes in Lycos and GeoCities. In
March, 2001, JustBalls! announced $13 million in new funding, two-thirds
of its total investment, from such companies as Blue Rock Capital
of Wilmington, Zesiger Capital Group of New York, and JAFCO America
Ventures of Japan. It was the exclusive supplier of balls to the Special
Olympics. It had 30 employees.
Now ISMG has 10 people in 7,000 square feet at Canal Pointe. "It’s
been a wild ride," says Klein. "We are profitable this year
and we no longer have to raise any money."
Suite 214, Princeton 08540. Jim Klein, CEO. 609-919-1234; fax, 609-919-1235.
Center, Suite 201, Princeton 08540. Mike Genovese, vice president,
sales. 609-275-6622; fax, 609-275-6880. Home page: www.ftindia.com
The financial software company, subletting Carnegie Center space from
Windels Marx Lane, offers mission critical OLTP (online transaction
processing) electronic Straight Through Processing applications. Straight
Through Processing means that the software can handle soup to nuts
for brokerage houses — pretrade, risk analysis, review and release,
handing off of trade to order routing system, the order routing system,
and the back office system.
"We sell our trading systems and online trading platforms to U.S.-based
customers," says Mike Genovese. "We have our own intellectual
property and have domain expertise, compared to the companies who
do programming to meet a client’s specifications." The firm offers
the components of a toolbox or a complete product and is a global
Microsoft partner on the Intel platform.
Headquartered in Mumbai, India, it has five other offices in India
plus those in Singapore and Australia. "In India we have a 70
percent market share of the broker dealers," says Genovese. In
the United States his competitors are Bloomberg, IonX, Reuters, and
the brokers’ inhouse systems.
Genovese majored in computer science and business administration at
Rutgers, Class of 1987, and has an MBA from Philadelphia Textile.
He worked for Reuters and ADP before joining this firm. This office
will be represented at the Intel and Microsoft booths at the Security
Industries Association (SIA) convention at the New York Hilton on
June 19 to 21.
Suite 1000, Princeton 08540. George Ascione, president. 609-688-0905;
fax, 609-688-0907. Www.lighthousehosting.com
Lighthouse Hosting has moved from Montgomery Common. The company hosts
websites and is a web presence provider.
at the law firm of Pellettieri, Rabstein and Altman and president-elect
of the New Jersey BAr Association.
also taught at the College of New Jersey in retirement.
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