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This article was prepared for the August 13, 2003 edition of U.S. 1 Newspaper. All rights reserved.
Life in the Fast Lane
When they started their software business — Simple
Solve Inc. — three years ago, Antony Xavier and Sam Serrapede
did almost everything right. The one mistake they did make almost
put them out of business.
The mistake: trying to defend themselves in an intellectual property
lawsuit filed by a Massachusetts-based company. "We learned the
hard way that emotions rule the process," says Xavier. "When
the lawyers come in, they say your chances are pretty good, and you
don’t pay attention to what it will cost you. You are wrapped up in
the emotion of proving yourself right and your opponent wrong, and
then you get the bill. The expenses were very damaging to us."
"It has been a financial struggle and an emotional struggle,"
says Xavier. "We had staked all our personal assets to get started.
We are in the process of getting funding to start up again."
The son of an aircraft engineer, Xavier grew up in the Kerala section
of India, went to Loyola College in Chennai, Class of 1976, and also
earned his law degree there. Married, he has three school-age children.
Serrapede is a first-generation Italian American who went to City
University of New York, Class of 1964. His wife directs the work/life
initiative at KPMG.
Xavier and Serrapede had started Simple Solve Inc. at 600 Alexander
Road in 2000. They did contract work on a reporting database for a
medical malpractice insurance company and also came up with their
own product, an insurance administration system software called SimpleInsure.
This manages the book of business of an insurance carrier. The software
takes care of issuing and managing policies, invoicing, premium accounting,
managing receivables, recording claims, and event customer service
functions related to policy receivables and claims. Using Chennai-based
programmers they were able to finish the product in two years, and
they launched it last summer.
Then came the law suit. Under the presumption that Xavier and Serrapede
had used trade secrets to develop SimpleInsure, a Massachusetts-based
firm filed suit. "We did not take it as seriously as we should
have," says Xavier, "in terms of the technical expertise required
in managing the litigation." Legal proceedings escalated and expenses
Finally the court turned the case over to a mediator and the two had
a chance to meet directly with the plaintiff, their former employer.
The next part of their story will be music to the ears of those who
advocate for mediation instead of litigation. "When we met, that’s
when things came to light," says Xavier. "Both parties decided
to eliminate the attorneys. From that point on until the final settlement
we did not involve the attorneys.
"We were very pleased at the mutual reasonableness of the settlement,"
says Xavier. "The overall objective for both of us was that both
companies could co-exist in the market without hurting each other
or paying a lot of money to the attorneys. Both sides concluded that
it made a lot of sense to settle out of court, that it was an unnecessary
expense to go through trial. Maybe logically it was not justified.
Maybe morally it was not justified. But it made business sense."
Simple Solve estimated the total cost of going through a full trial,
complete with hiring technical experts, would have been a minimum
of $500,000. And timing was crucial. Says Xavier: "We would have
had to declare bankruptcy, business and personal, if this whole process
had been delayed just two or three months. The settlement cost was
nowhere near what it would have cost to go to trial."
The lawsuit settled in April. Meanwhile, they had exhausted the financing
available to them from Fleet Bank. So their current business attorney,
Steve Cohen of Morgan Lewis & Bockius, referred them to a funding
firm that is now doing the due diligence process required before making
a commitment. "Xavier and Serrapede are veterans of the insurance
industry in the IT space who identified a business niche that was
unfulfilled and sought to develop a program to fill that niche,"
says Cohen. So far, their product has received rave reviews from the
experts who look at it.
The principals plan to launch the second version of their software
product this month. More than 50,000 offshore programmer hours have
gone into SimpleInsure, which will be marketed to small and medium
insurance companies for a five figure price.
All the pieces of this rescue puzzle were coming together nicely until,
at the end of last month, they had one more piece of bad luck: burglars.
Burglars broke the window of an adjoining office, kicked through the
wall, and made off with two laptops. Fortunately the company is insured.
"We have not lost anything that would disrupt our business, because
we have backups and copies. But," says Xavier in a masterpiece
of understatement, "it has been a testing time."
— Barbara Fox
08540. Antony Xavier, president. 609-452-2323; fax, 609-452-2314.
Home page: www.simplesolve.com
08618. Andrew L. Jaeger, president/CEO. 609-538-4061; fax, 609-538-4057.
The Credit Union of New Jersey broke ground on August
6 on a two-story, 22,000-square-foot brick headquarters on 4 acres
of the 84-acre property that used to be the General Motors plant,
off Parkway Avenue. Expected to be finished in fall of 2004, the building
will replace three of its six locations in Ewing including the 10,000
square foot headquarters on Dunmore Street and branches on Parkway
Avenue and in the Glen Roc shopping center. Other branches are at
225 East State Street, 12 East Lafayette Street, and at the Lalor
Building in Trenton.
The credit union recently merged with Parkway Financial Credit Union
and now has 29,000 members and assets of $150 million. It paid $500,000
for the land (formerly an employee ballfield and now environmentally
clean) and contracted with HBE Corp for the construction. Included
will be eight teller stations, a drive-through station, a financial
center with a consultant, an information station, and a training room
for up to 100 people.
Street, Princeton 08542. Stephen S. Thompson, regional manager.
609-921-3131; fax, 609-921-8558. Home page: www.thinkarlington.com
After six years on Witherspoon Street, the Princeton
office of Arlington Capital Mortgage is expanding, doubling in size
in the last 18 months. It grew from nine to 18 employees and expanded
from 2,180 square feet to 3,634 feet. The just-occupied area is the
space formerly occupied by Kinko’s.
With Kevin Kenyon as president, Arlington has 150 employees and has
closed $5 billion in residential loans since it was founded 15 years
ago in Bensalem.
08542. Patricia Leuchten, principal. 609-252-9020; fax, 609-252-9022.
Avoca Group, the pharmaceutical consulting firm, moved from 195 Nassau
Street to 179 Nassau Street. "We have expanded our service,"
says Patricia Leuchten, founder of the firm that used to be known
as PharmaLink. With two employees here and five at client/remote sites,
it consults to pharmaceuticals, biotechs, and CROs on outsourcing,
contracting, and facilitating partnerships.
Street, Suite 22, Princeton 08542. George H. Sands, senior partner.
609-921-6060; fax, 609-924-1992. Www.hiltonrealtyco.com
Mark Hill and Jon Brush, leasing agents for Hilton Realty, have expanded
their space and occupy a third-floor office overlooking Nassau Street.
Among the properties they lease: Research Park, Windsor Business Park,
Ewing Commerce Park, Enterprise Park off Sullivan Way, Whitehorse
Professional Building, Kuser Plaza, Montgomery Shopping Center, and
Princeton Arms Shopping Center.
Princeton 08540. Rob Bain, manager. 609-734-0008; fax, 609-734-0250.
Home page: www.stewartind.com
A Mount Laurel-based office equipment company moved
into 4365 Route 1 South, the building just south of the Radisson Hotel.
It sells Savin/Ricoh-brand copiers, fax machines, and digital high
volume print solutions in color, black and white, and wide-format.
Headed by Chuck Cahn, son of founder Stewart Cahn, the company has
eight employees here, plus nine technicians on the road, and it has
five other branches.
08648. Michael Cloran, CEO. 609-658-8020; fax, 609-637-9762. Www.interactions.net
On Princess Road, Michael Cloran’s firm is working on software tools
for the customer contact center industry.
B, Lawrenceville 08648. Linda Valyo, manager. 609-883-3000; fax,
The staffing company moved from a building across the street from
the Lawrence Shopping Center to Princess Drive. "We moved to get
a better location, where people can find us more easily," says
Cindi Dwyer, assistant manager.
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