Jeff Ellentuck spent 20 years as a securities lawyer helping other people go for the brass rings. He worked for big law firms, most recently Reed Smith, doing IPOs and arranging mergers and acquisitions. Several years ago, deciding to go for a brass ring himself, he founded Waveleap, to tap the profit potential of telephone calls made on the Internet.
That market is turbulent right now, because of the patent battle between Verizon and Holmdel-based Vonage, which went public last year, and has been a poster child for the state’s technology sector. Vonage is aggressively marketing its telephone-by-broadband services, known as Voice over Internet or VoIP (pronounced like Detroit). But, in a patent infringement lawsuit, a jury ruled against Vonage earlier this month and a judge’s decision on March 23, ordering the company to pay $58 million in damages to Verizon and to stop using a technology that connects its service to the public phone system, is being called a potential death blow.
Whereas Vonage has staked out the VoIP consumer market, Ellentuck’s firm partners with companies that install PBX (multi-line office systems) in corporate offices. Waveleap’s largest client so far is a call center that has 15,000 people calling 22 hours a day, and its smallest client makes calls at a rate of 100,000 minutes a month.
Ellentuck’s office in Hightstown has just two people in it, and he has four other employees on contract. Last year he grossed $340,000 and he is hoping to double that this year. But over the next five years he expects his revenue to rise to $5 to $10 million. Self-funded except for a $100,000 Small Business Administration loan from First Washington Bank, he owns the whole company and will have no patent woes, because his business — unlike Vonage’s — involves no patents.
Waveleap handles Internet telephone calls — local, long distance and international. It originates and terminates those calls, provides conferencing services, and does various conversion services. It aggregates calls made over the Internet by smaller carriers, call centers, and calling card customers, and delivers them to the big carriers such as AT&T and Level 3.
More and more calls are being delivered over the Internet without the customers knowing about it. “Even three years ago,” says Ellentuck, “60 percent of all calls went over the Internet at some point.” That’s good for industries with high call volume, but worrisome for industries that need confidentiality. And Waveleap can promise content security. “We can put our clients’ calls on lines that never touch the public Internet,” he says. Voice or data messages on these private lines cannot be intercepted. Other calls, not on private lines, can be encoded by Waveleap.
Until fairly recently, wholesale telephone calls might start as conventional or network calls, but the large carriers required the calls to be converted to the old system (the public switched network). These conversions took place even though the carriers would convert almost all the calls a second time, to Internet protocols, for efficiency. “Nobody ever took them directly as Internet protocol,” says Ellentuck. “Nobody did what we do until 2003. AT&T, and China Telecom XO, and we, and a number of other companies are, in essence, on the same switch. The calls go direct from our equipment computer to the destination.”
Waveleap also originates and terminates calls that go out on public lines, and it can encode these calls. To be able to compete on price, Waveleap recently installed software to enable “Least Cost Routing.” Different carriers have different prices for different phone numbers, and one carrier will be cheaper for one number but more expensive for the next. “With the new software we can deliver up to eight carriers,” he says. The system looks at four carriers for each call and picks the cheapest. “We are not cheapest in any individual exchange, but overall we are the most efficient,” he says. “Our companies are not stuck in the vagaries of the telephone system.”
When the VoIP market was young, Ellentuck decided to leave corporate law and try for success in the telecommunications field. He realized that, having worked with both telecommunications and Internet companies, he was among the few who spoke both languages. “The people who understood computers and those who understood telephones were different,” he says, “though they used the same words.” Lack of understanding provoked arguments (“I had two guys in my living room, yelling at each other”) and hindered new ideas.
“I had a flash of stupidity, and it was incredibly exciting,” says Ellentuck. “I was watching what Vonage was doing, selling Internet telephone service to consumers.” Meanwhile, engineers, to amuse themselves, were working on an “open source” (collaborative, not patented) project, an IP-based PBX system. “They were building these PBX boxes and plugging them into a single telephone line. It was incredibly stupid from a business point of view, but to them it was a toy. And once the engineers started playing with the PBXes, their machines could do incredible things.”
Vonage was successfully selling to consumers, but Ellentuck veered sharply away from that business model. “I didn’t have the money or desire to build call centers. The cost of call centers and distribution channels is tremendous, and the marketing is costly.” In contrast, Ellentuck reaches his customers, the installers of PBX systems, by going to trade shows and by word of mouth. “We require very little in customer support — our engineers talk to their engineers.”
Waveleap’s biggest competitors are its carrier-partners, who refer contracts that are less than a million minutes a month or are overseas. In overseas traffic, Waveleap faces few competitors, at least not yet. Foreign phone companies use a slightly different protocol and they compress the bandwidth with a different formula. “Bandwidth in countries like India is very expensive, and they all compress it a different way,” says Ellentuck. “Everyone can get the traffic, but they can’t quite understand it.”
“We realized it would take years to recover the cost of equipment required to do the compression ‘codec’ conversions. Each conversion box is $30,000 to $60,000, and the markup in phone traffic is very small.” Ellentuck’s solution was to buy the boxes and offer to do the conversion for the other carriers. He compares it to a laundry service washing the linens for several hospitals, or a call center handling the calls for a number of companies.
Waveleap is partnering with Cantata Technology, based in Needham, Massachusetts, for this real-time outsourced conversion service, called Xvon.net. Using Cantata’s IBM 1010 product, the Xvon.net service targets small and medium-sized businesses and professional firms. Among its other clients for this service are carriers, aggregators, calling card companies, and enterprise clients.
“It lets them accept call traffic from virtually any source and terminate that traffic on virtually any carrier worldwide,” says Ellentuck. For example, if a customer uses a network that supports one protocol while the selected carrier or peer only accepts another protocol, Xvon.net seamlessly connects the two networks. No additional equipment is needed. “We are expanding into the international market and in the last month have started to go into Mexico,” he says.
Ellentuck grew up in Princeton, where his mother, an author, ran an advertising agency (Ellentuck Springer). His father is an architect, currently with O’Connor Gordon Pratt in Hightstown. He graduated from Rider in 1979, earned his law degree at Rutgers Camden, and worked in the securities field, doing mergers and acquisitions for large law firms.
The name of the company came from Ellentuck’s initial business plan, to be a fixed wireless company over “leaping” radio waves (hence, Waveleap). “We wanted to deliver an inexpensive package, to transfer from a tower to your home.” This scheme had worked in Arizona, which is flat and surrounded by mountains, but it did not work in New Jersey, and he abandoned the wireless idea.
He founded Waveleap with his own funds. He and his wife have two teenaged sons. It helps the family budget that his wife, Sharlene, keeps her job as a healthcare lawyer. “I’m needing no VCs, needing no angels,” says Ellentuck. “After the initial phase I will give some equity to the people who worked with me, but now I am paying them in full.”
After 20 years watching other entrepreneurs have their capital siphoned off by investors and stockholders, he says he wants to “let it go for a little while. I want a little more revenue before I sit down with angels.”
Going for the brass ring on a merry-go-round is a risk-free game, but going into the ring with the mega telcos does indeed involve risk, as Vonage has discovered. Compared to Vonage, with its 1,400 employees and 1.6 million subscribers, Waveleap might seem puny. But, with its partners, it could indeed be a threat.
Says Ellentuck: “We are attacking the telephone companies.”
Waveleap Communications LLC, 299 Ward Street, Hightstown 08520; 609-371-1801; fax, 609-371-0050. Jeff Ellentuck, owner. Home page: www.waveleap.com
Goodbye to ITXC
VSNL Enterprise Solutions (formerly Teleglobe or ITXC Corp.), 90 Matawan Road, Suite 101, Matawan 07747; 732-203-3000; fax, 732-203-3003. www.itxc.com
VSNL Enterprise Solutions (formerly ITXC Corp.) has moved from Princeton to Matawan, vacating 70,000 square feet at 750 College Road, where at one time, there were 260 employees.
The firm was founded in 1997 by Tom and Mary Evslin at their Library Place home, and now it is owned by one of the world’s largest conglomerates, India-based Tata.
Six years after its founding, ITXC operated the world’s largest VoIP network and was the world’s largest VoIP wholesaler, based on international calling minutes, carrying over 4 billion minutes of international traffic annually. It had direct relationships with carriers in more than 175 countries. In 2004 ITXC placed sixth on the list of fast growing companies, and that year it merged with Teleglobe, which was sold to VSNL in 2006.
VSNL, India’s leading provider of telecommunications and Internet services, also has operations in Sri Lanka, Singapore, and Europe. Tata, the Indian conglomerate, owns a controlling stake in VSNL.
New in Town: New Life
With the ever-competitive market for treatments for erectile dysfunction (ED) at fever pitch, New Life Scientific, Inc — a Princeton-based company specializing in the development of new biotechnology products and pharmaceuticals — has jumped into the fray.
Earlier this year Henry Val, the company’s CEO, announced an exclusive license agreement for platform technologies that will allow formulation of topical drugs intended for the treatment of erectile dysfunction using a simple application of prostaglandins to the glans of the penis. (It is also used to treat female sexual arousal disorder.)
Erectile dysfunction is the inability of a man to respond to sexual stimulation with a penile erection of sufficient firmness to penetrate his partner, and to maintain that firmness through ejaculation.
Since the term “ED” has become a part of the cultural lexicon — now on everything from baseball billboards to TV sitcoms — it has mushroomed into a big business. Several Princeton area businesses have also entered this market. They include NexMed USA on Twin Rivers Drive in East Windsor and Palatin Technologies at Cedar Brook Corporate Center in Cranbury.
It’s a lucrative market. For every 1,000 men in the United States, 7.7 physician office visits were made for ED in 1985. By 1999, that rate had nearly tripled to 22.3. It is estimated that over 30 million American men suffer from ED and that at age 65 nearly all men have either mild, moderate, or severe erectile difficulties.
Female sexual arousal disorder is a less discussed sexual problem that continues to gain recognition. Approximately 30 percent of women report lack of sexual interest and close to 25 percent do not experience orgasm. Development of treatment for this condition represents one of the unmet needs of modern society.
“Of course, that is a very small part of what we do,” says Val, who purchased the company in 2003. “The biggest part of our business is to do contractual work for other pharmaceutical companies. We also develop our own drugs.”
Originally founded in 1990 as TMA, New Life Scientific was initially formed with the intention of developing and commercializing biotech/pharmaceutical products, including vaccines and stem cell-based treatments. The company changed its name in 2005.
Val got involved with New Life Scientific by happenstance. “I’d been asked to review and help in financing the company and wound up staying,” he says. “The people involved at that time were all scientists, healthcare people, and biotechnology people. The bankers would not provide financing unless there was a businessperson involved. They asked me to stay.”
Born and raised in the Ukraine, Val was educated overseas and moved to United States to settle with his family in New York City. He, his wife, and four children settled in New Jersey largely out of self-defense. “In 1995 my wife and I had a child who was just about ready to start school,” he says. “But then one day we heard that a student at the school happened to walk into the bathroom in the middle of the school day and got stabbed in the heart by another kid asking for a quarter. It was so shocking that we knew it was not a place for a child and we moved to New Jersey. I like it here. It is a lot calmer.”
For the past few years, New Life Scientific has aimed at commercializing the vast amounts of research being done in Eastern Europe, particularly stem cell research, a promising advancement in the treatment of injuries and diseases that has been held up in the United States by legislation that severely limits sources of stem cells that can be tapped for research. New Life is taking research done in Eastern Europe and adding western marketing procedures. This represents a potential avenue of commercial profit for the company.
Recently the company has aggressively acquired equity positions in start-up and existing companies seeking long-term growth potential in a business venture rather than immediate, short-term earnings. It hopes that providing management services and acquiring equity positions in companies will provide shareholders with potential for increases in equity.
Among the services offered: bridge capital, development of management teams, implementation of marketing programs when appropriate, and filing of registration statements to facilitate the public market for securities.
Last fall the company moved its home base from Freehold to its current offices on Roszel Road.
New Life Scientific currently has offices in Poland, the Ukraine, Genoa, and Milan, as well as affiliates throughout the United States and Canada. Seeking out emerging and under-valued biotechnology companies, New Life Scientific has created three subsidiaries from companies it bought in 2005.
PharmaTrials International provides services in clinical trials, market research, and the regulatory approval of products for pharmaceutical, biotech, and medical device companies.
Invamed Pharma specializes in development and commercialization of pharmaceutical/biotech products coming from its own pipeline of in-licensed and new therapeutic classes, as well as reformulation of existing products using proprietary technology to improve therapeutic potential of drugs.
Novo Life Scientific has a cooperation agreement with the Institute of Molecular Biology and Genetics of the Ukrainian Academy of Sciences to develop and market stem cell related products and therapies, and to establish a stem cell bank in the Ukraine.
Last November the company announced that it has retained vFinance Investments to provide a broad range of investment banking, strategic, and financial advisory services to Biorigen USA, a joint venture of with Biorigen Srl, an Italian biotechnology company. Biorigen USA’s technologies include the use of biomaterials as a carrier for stem cells and growth factors, and other biomolecules to promote stem cell survival and biologic activity in tissue regeneration after implantation.
Versatility is the key to New Life Scientific’s growth, says Val. By expanding into potentially profitable eastern European research, New Life Scientific hopes to be a part of the upcoming renaissance of modern healthcare that many experts predict. “We know that we need to be aggressive in what we do in order to realize our growth potential,” says Val. “There is a lot going on for us and we intend to make things happen.”
— Jack Florek
New Life Scientific Inc. (NWLS), 15 Roszel Road North, Princeton 08543; 609-720-0225; fax, 609-720-0211. Henry Val, CEO. Home page: www.newlifesci.com
Supremia USA Inc., 103 Morgan Lane, Plainsboro 08536; 609-897-9688; fax, 609-897-1180. Robert Catalano, vice president. Home page: www.supremia.com
Supremia made its move from Deer Park Drive to 103 Morgan Lane, expanding from 2,000 feet to 4,500 square feet. With 13 staff members, it is an international promotional sourcing specialist, providing premiums for corporate promotions.
Based in London, it finds manufacturing sources in the Far East for giveaway items for publishing firms (such as Reader’s Digest and Time Life), cosmetic firms, and tobacco and cereal companies.
Traf Group/Credit America, 101 Grovers Mill Road, Suite 303, Lawrenceville 08648; 609-771-8480; fax, 609-771-8481. Patricia Genovay, owner and president. Home page: www.trafgroup.org
The Traf Group, an accounts receivable management company, just moved from about 7,000 square feet at 80 West Upper Ferry Road in West Trenton to 10,500 square feet in Lawrenceville. The company has two divisions. Credit America offers precollection services, and A1 Collection Service is a traditional collections agency.
President and owner Patricia Genovay says the company has 35 employees now and is looking to double or triple in size.
Doolan Realty, 2409 Pennington Road, Pennington 08534; 609-737-7008; fax, 609-737-2433. Peter Doolan, president. Home page: www.doolanrealty.com
Doolan Realty more than doubled in size in a move from 1194 Parkway Avenue in Ewing to 2,000 square feet in Pennington. Founded in 1935 by Peter Doolan’s father, Joseph, the firm focuses on home sales Pennington, Ewing, and Trenton, so the new office is in a more central location.
Peter Doolan, who has been with the firm for 35 years, has added real estate agents, for a total of 10 full-timers and 20 part-timers. He handles both residential and commercial sales.
e-Healthcare Solutions Inc., 810 Bear Tavern Road, Mountainview Office Park, Ewing 08628; 609-882-8887; fax, 425-671-7796. R. J. Lewis, founder and CEO. Home page: www.e-healthcaresolutions.com
On April 1 R.J. Lewis will move his E-commerce firm from Grand Avenue to Bear Tavern Road, going from 1,200 to nearly 3,000 square feet. Anne LaBate of Segal Commercial helped him find the space. “I was in the mindset to purchase a building, and it became a quick search when I decided to rent,” says Lewis. With about a dozen people now, he is recruiting account managers, sales people, and possibly technical HTML and web designers.
Lewis’s eight-year old firm is a vertical Internet advertising network dedicated to healthcare. It provides specialty online advertising opportunities for marketers of medical and pharmaceutical products who want to reach consumers, physicians, and other health professionals (U.S. 1, January 10, 2007).
His network delivers more than 35 million page views per month and includes more than 350 healthcare websites. There are sites for doctors, disease-specific sites for consumers, and sites for medical communications.
Professional societies make up half of his commission-based business, and his clients include the American Medical Association, JAMA, American Medical News, Thomson’s PDR, the American Heart Association, the American Academy of Neurology, and 15 journals published by Elsevier, Lippincott’s Williams & Wilkins medical division.
Metropolitan Technologies LLC, 212 Carnegie Center, Suite 206, Princeton 08540; 609-919-6355; fax, 609-520-8731. Mark Kretchmer, principal. Home page: www.metropolitantech.com
An 11-person consulting firm moved from Trenton Business & Technology Center to shared space in the Carnegie Center. In this office Mark Kretchmer heads the four-person IT and security division. Felicia Doggett, in the Philadelphia office, is responsible for audiovisual and acoustical consulting. The company was founded in 2004.
Seegna LLC, 55 Princeton-Hightstown Road, Suite 210, Princeton Junction 08550; 609-945-0402; fax, 609-935-0578. Sangeetha Siddhantam, president. Home page: www.seegna.com
In March Sangeetha Siddantham moved her three-year-old IT business to Princeton Hightstown Road. Focusing on the insurance industry, she offers SAP technical and functional solutions.
She co-founded the firm in 2004 along with her husband, Srinivas, who has worked in the SAP field for 18 years. “We train people in SAP and place them,” she says. “Our team of experienced consultants provides SAP technical and functional solutions to implement SAP FI-CO, SAP Insurance (FS-CD), and related solutions.”
She grew up in Hyderabad, India, where her father had a personal loan business and had real estate interests. After majoring in business at Osmania University, she came to this country with her husband in 1997. She has twin children.
“I worked from home in sales, selling space ads, and doing medical transcription and billing work, and then I moved into IT,” she says. “My husband is my guru. He helps me out with any technical problems and works in this company as a senior consultant.”
The company name starts with S because “S is special for me; we are a family of S,” and because, when pronounced, it sounds like the name of an insurance firm.
New in Town
Aptek Solutions Inc., 55 Princeton-Hightstown Road, Suite 209, Princeton Junction 08550; 609-799-3399; fax, 732-658-4525. Ramana Reddy. Home page: aptekinc.com
An IT consulting firm has moved into 55 Princeton-Hightstown Road. It does IT consulting, contingent staffing, Internet/intranet development, custom software development, infrastructure management, and systems integration. It also has an office in Hyderabad, India.
NOGCOMM LLC, 2227 Route 1, Suite 302, North Brunswick 08902; 866-959-4733; fax, 866-890-5165. Home page: www.nogcomm.net
An IT firm has opened an office in North Brunswick. A spokesperson declined to be interviewed, but, according to its website, the company was founded in 2005 and does networking consulting and design, security, infrastructure cabling, wireless LANs, and voice system installations.
Special Materials Company, 700 Alexander Park, Suite 302, Princeton 08540; 609-720-0080. Mark Silver, president. Home page: www.smc-global.com
Special Materials Company, a manufacturer of specialty chemicals for industry, has consolidated its offices in Cherry Hill and Doylestown into a new space at Alexander Park. The decade-old firm has three plants in China and one in the Untied States, sells globally to the oil, motion picture, imaging, electronics, paints and coatings, and paper industries, and has warehouses in North America and Europe.
According to president Mark Silver, the company has been growing about 50 percent per year for the last eight years, growth that he attributes to the firm’s cost structure.
Silver, who graduated from Cleveland State with a bachelor’s degree in English, has more than 22 years experience in the chemical industry and was previously vice president of IMC Group, where he started and developed its inorganic chemical manufacturing business.
Uptown Personnel, 2733 Nottingham Way, Suite 7, Hamilton 08619; 609-587-7770; fax, 609-587-7773. Nancy Zwick, president. Home page: www.uptownpersonnel.com
Nancy Zwick moved her 15-year-old personnel firm from Mastoris Professional Plaza in Bordentown to the Nottingham Building in Hamilton. The company works with hiring managers in companies in New Jersey and Bucks County to place permanent and temporary employees.
High Tech Chemicals, 3 South Main Street, Allentown 08501; 609-208-1378; fax, 609-259-0874. Rajni Parikh, president.
High Tech Chemicals, which does marketing for textile and metal-finishing chemicals, has moved from 3260 Route 27 in Kendall Park to Allentown.
International Trade Network, 29 Crusher Road, Hopewell 08525; 609-203-1905; fax, 609-896-1469. Richard M. Miller Esq., president and general counsel.
The International Trade Network that used to be headquartered with Miller & Mitchell has moved from Nassau Street to Hopewell. The principals in that law firm joined Fox Rothschild on Lenox Drive. The group is involved with promoting the globalization of central New Jersey business.
The Mortgage Zone, 186 Princeton-Hightstown Road, Princeton Junction 08550; 609-297-0464; fax, 609-482-8100. Scott Stein, managing director. Home page: www.mortgage-mini.com
The mortgage brokers moved from 61 Princeton-Hightstown Road down the street to 186. Although sales are growing, many staff members prefer to work at home, and the new space has been designed with technology that allows them to do so effectively. Stein came to the Mortgage Zone from the commercial construction industry four years ago to start the firm’s operations in New Jersey. The firm is based in Long Island and Hauppauge, New York.
New Level Partners, 100 Overlook Center, Second Floor, Princeton 08540; 609-375-2207; fax, 609-375-2688. Nancy M. Langton, partner. www.newlevelpartners.com
New Level Partners, a recruiting and staff development company, has moved from 182 Nassau Street to 100 Overlook Center. It offers staffing, skill development, compensation bench-marking and planning, and organization design.