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
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
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
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
Association speaks, as do representatives from regional cable
Technically, broadband refers to any telecommunication capable of
supplying multiple channels over a single medium. Full federal
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
faster service, and enables high quality audio and video
Digital Subscriber Lines (DSL) provide much of this high-speed,
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
businesses have been surprisingly slow to take up the cable
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
she represents four of the state’s seven cable providers as they
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
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
fundings for cable enhancement. Some of the offerings worth pursuing
with your local provider include:
close to resting in our palms. Your current telephone capabilities
will join with your Internet protocol. You will use one line for data
transfer and phone calls; you’ll be able to make transfers either
way, all at the faster cable modem speed — and at a lower cost.
and even cheaper claims Comcast Information Specialist
of the power of cable. Cable modems afford their business customers
a minimal 100 megabyte website. The higher speed allows more graphics,
a greater number of rapid links, and even video capabilities that
won’t have your clients grinding their teeth waiting for your message.
Cable lines currently handle networks for up to 200 stations at the
near instantaneous rate of 2 megabits of data per second. This is
fast enough to handle an almost limitless load of communication within
companies offer business customers two domain names as E-mail logos.
Voice-produced messages for both incoming and outgoing contacts are
available at a competitive rate due to the cable’s enhanced capacity.
Yet for the business owner, the cable question remains: "How do
I get the line cheaply into my shop?" Cable owners claim Garden
State markets are saturated, but most of this drenching remains
Even for a firm only five miles from the nearest line, getting the
coaxial into his area can demand Himalayan efforts — and costs.
While the seven broadband cable servers in New Jersey do cover each
region of the state, many niches remain unaccessed due to set-up cost.
service number (973-648-2670) can help you determine which cable firm
is nearest and which others may service your area. Typically, servers
will refuse, at first, to string a line any distance for a single
customer. But more and more private businesses are uniting to bring
cable into the remaining unserved neighborhoods, and initial
fees are dropping.
The age of acquisition definitely lies amouldering.
Just as investors are sniffing askance at eager new startups, they
are equally pulling back from those mature businesses that are
waving the sign "Brought to Fruition and Ripe for Sale." As
an 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 before
you place it on the block.
Investors, owners, and potential buyers trying to get a grip on the
business of selling a business may glean great advice from a Venture
Association of New Jersey meeting on "Valuation: How to Increase
Your Business’ Worth" on Tuesday, July 16, at 11:30 a.m. the
Hotel in Morristown. Cost: $45. Call 973-267-4200 or visit
Technology Council Venture Fund, discusses the differing perspectives
of buyer and seller, along with certain specific steps owners can
take 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 firm
for sale or public offering just to get his sanity back. One can get
awfully tired after three years of endless 18-hour days." An
as well as venture capitalist himself, Gunton has played the game
on both coasts for years. Following a childhood on the outskirts of
Philadelphia, Gunton went west to attend Stanford University, where
he earned a degree in applied math. After he graduated he became a
principal in several Silicon Valley firms over a 10-year period.
Coming back East in l994, Gunton again took the capitalist reins and
began investing in Garden State firms. "Silicon Valley was
fast paced," he admits, "but I find the world of Northeast
investment more intriguing." A Lawrenceville resident, Gunton
oversees the NJTC Venture Fund, which he formed in 2000. Last year
the fund dispensed over $75 million in early stage capital, primarily
to startup high-tech and pharmaceutical firms.
"Probably the most important, yet most overlooked, item in selling
a company is realizing exactly what you want out of the deal,"
says Gunton. Many an owner goes into the sale with vague notions such
as "well, it’s time," or "seems like a good market
but that’s not nearly enough, insists Gunton. A good seller examines
what she wants as well as what every other interested party wants
to take away from the table.
is seeking to build and sell an industry leader. He wants to put his
product’s best gear forward. Basically this is a good idea, but he
must remember that his business’ initial investors primarily want
to build an object with high acquisition potential. One person is
creating a car to run fast and durably, while the other is building
an auto to sell. These conflicts have to be ironed out well before
any initial feelers are made.
send most employees diving for their resumes, anxious to take their
skills into more secure pastures. This could prove disastrous, not
only to the seller’s image, but also to the very health of the
Actually, in most cases, everyone wants the same thing. Staffers want
to keep their jobs. Sellers want to have their firm sold intact and
the acquirer wants the continuity of employment. Thus one of the
very first steps should be to instill a sense of permanency in his
workforce. Regranting stock options along with setting up a system
of staying bonuses can help encourage your employees and make them
feel that their best future lies with this company, despite the change
of ownership. Whatever plans you make, they must be implemented before
the rumor mill begins churning.
a well shaped set of books. Yet how to present items in a method
to the outside acquiring investor? Should revenue be booked up front?
Should research and development costs be listed as expenses or slowly
written off over time. Gunton’s rule is "mirror the industry
Study competitors and find what similar, successful firms doing.
a tacit consensus has been reached on accounting practices, without
a lot of talk. These practices may not always be the best for your
firm, but they probably aren’t terribly destructive and they are in
a language your acquirer will understand.
million dollar question — literally." The seller needs to
determine whether it is fiscally wiser to develop the technology,
present a prototype, then sell swiftly to the highest bidder, or to
expand into sales, and auction the entire package off for a real
This is what Gunton calls the natural chasm in business sales.
low and selling too soon. And since the Baron, mountains of caveats
from thousands of pundits have labored to sway entrepreneurs either
way. Gunton’s personal view is that the only way to hurdle this
chasm is to return to the first step and review exactly what you want
to take away from the sale of your firm. Of course, the owner’s break
from his creation does not have to be total. Many a sharp entrepreneur
has negotiated a vice presidency in charge of technology and
for 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 turn
off to even the brightest of investors," he says.
— Bart Jackson
in the late-1960s, that company had a 90 percent market share. "It
was the same with Xerox," Hogan recalls. "They had about a
90 percent market share." IBM had an excellent training program,
but, he acknowledges, it didn’t take a whole lot to make a sale for
a company with that kind of market share.
It’s a new world for sales.
"We don’t even trust the clergy," says Hogan. "Where does
that put salesmen in the food chain?"
Hogan, who left IBM after 15 years to start his own business, is
of the Hogan Leadership, a management and consulting business with
offices at 2 Carnegie Road in Lawrenceville. While selling has become
more difficult, he says, it has become more vital, and not just in
the traditional sense. Sales, says Hogan, founder of the Hogan
Group, filters through to every part of the organization.
On Wednesday, July 17, at 8:15 a.m. Hogan speaks on "Trade Fair
Sales and Marketing" at the Chamber of Commerce of the Princeton
Area at the Nassau Club. Cost: $24. Call 609-520-1776.
president of the Entrepreneurial Management Group, also addresses
Hogan, who did his undergraduate work at Montclair State, spent the
early part of his career teaching math. His real love during those
years, though, was coaching. Among his coaching jobs was a four-year
stint — 1969 to 1973 — at Notre Dame High School in Lawrence.
His job with IBM included an assignment as sales manager of the
Trenton office. After a three-year assignment at headquarters, in
Armonk, he decided to return to central New Jersey and open his own
Most of Hogan’s clients are small businesses, which he defines as
start-up through $10 million in annual sales. He doesn’t cater to
any particular industry niche, because, he says, at its core all
is 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’s
list of priorities. "Everybody works with accountants and
he says, "but there is still the feeling that `my product is so
good, people will buy it.’" The start-up will have brochures
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, says
Hogan, the founder should be the person who is out there selling.
"Think of the psychology," he says. Potential clients,
partners, and funders react differently when the sales card they are
being handed says "CEO" than they do when the card says
Trade fairs afford top management a valuable sales opportunity. Many
potential clients and business partners gather under one roof, and
funders may well be circling around as well. Reporters, on the lookout
for news, also are in attendance, offering the possibility of free
publicity. Make the most of trade fair day, says Hogan, suggesting
the following strategies:
before the first visitors enter the exhibition hall. Think through
the company’s reason for attending, and plan staffing, training, and
hand-outs around what the company hopes to accomplish.
attend a particular fair is to brand the company. If that is the case,
prepare effective materials, build an impressive booth, and use it
as a base to hand out brochures, pens, and T-shirts. Generally, this
is not enough. In most cases, it is a good idea to use the trade fair
as a chance to gather information as well as to hand it out.
asking 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 for
In addition to yielding specific information, these questions will
separate genuine prospects from the folks roaming the aisles with
the sole goal of filling their plastic bags full of logo pens,
get some time with elusive prospects. Well beforehand, call and invite
one to lunch, one to tea, and one to dinner. You know they will be
there, and may be receptive.
but it offers an opportunity to schedule post-fair appointments. Try
to make as many business dates as possible, and where it isn’t
to 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.
Hogan. The founder, and perhaps other members of top management,
be out and about, scouting the competition. He sees nothing wrong
with leaving the booth to handsome/beautiful young people, the types
most likely to attract visitors. But, he stresses, it is vital that
these booth staffers, who do not have to be company employees, are
well trained, and instructed to get in touch with top management via
cellphone if a prospect would like a word with them.
a table out in front, parallel with the aisle. Promotional materials
generally are put on that table. Big mistake, says Hogan. This just
makes it easy for the pen-grabbers to snatch and go. Using a U-shaped
table, and placing promotional materials at the back, forces prospects
to walk in. This gives booth staffers a chance to ask the four
and lets them give brochures and promotional materials only to serious
the sales process. "Who does most of the talking?" he asks.
While the answer, clearly, is the patient, he next asks "Who is
in charge?" Ah ha! So, the good salesperson does a lot of
but retains control. This principal should apply to a trade fair as
well as to a standard sales call. The salesperson, in this case, often
the CEO, needs to remain firmly in control, using the event to get
the information he wants and the appointments he needs.
While many businesses and politicians are looking on
the dark side of the McGreevey administration’s corporate tax package,
others see a brighter side to the new governor’s policies. Perhaps
because James McGreevey was mayor of Woodbridge, an urban area
beset with pollution and brownfields problems, McGreevey is
focusing more on cleanup than recent governors have been. This means
good news for builders, says Anthony Pizzutillo, a principal
at Issues Management on Poor Farm Road, who represents the National
Association of Industrial and Office Properties (NJ-NAIOP).
"In all my time in government I have never seen an administration
more responsive to the needs of urban revitatliztion and brownfields
redevelopment," says Pizzutillo.
The NAIOP hosts Bradley M. Campbell, the new commissioner of
the New Jersey Department of Environmental Protection, on Wednesday,
July 17, from 8 to 11 a.m. at the East Brunswick Hilton. Following
Campbell’s keynote, Pizzutillo speaks on a panel moderated by David
T. Houston Jr., president of Colliers Houston & Co., which will
respond to the commissioner’s speech and estimate the impact of DEP’s
plans on the commercial real estate industry. Other panelists are
Anthony DiLodovico, vice president at Schoor DePalma Inc. and
Dennis Toft, an attorney at Wolff & Samson. Cost: $85. Call
Campbell will discuss the restructuring of his department, the
and opportunities facing New Jersey’s policy makers, brownfields,
and site remediation redevelopment issues. He will also talk about
such water issues as allocation permits, drought restrictions and
watershed management planning, wetlands, smart growth, and
"This type of open communication with state agencies, especially
the DEP, is vital to our industry’s growth and the revitalization
of New Jersey’s older and urban communities," says Thomas S.
Michnewicz, NJ-NAIOP president.
The DEP commissioner majored in history at Amherst College, Class
of 1983, and went to the University of Chicago Law School. From 1990
to 1994 he was an attorney-advisor for the U. S. Department of
Environment and Natural Resources Division. When Clinton appointed
him to be the EPA’s regional administrator for the mid-Atlantic
he addressed lead contamination in Philadelphia schools, worked on
smart growth pilot projects, and negotiated agreements to strengthen
protection of the Chesapeake Bay and to protect New Jersey’s coastline
without hampering port development. Currently, Campbell is a visiting
professor at University of North Carolina’s Law School.
As the son of a Cherry Hill-based home builder, Pizzutillo was a
science major at Villanova, Class of 1975, and has a master’s in
policy from the Eagleton Institute of Politics. He has worked at New
Brunswick Tomorrow, Middlesex County Planning Board, on Dick Leone’s
campaign for the United State Senate, and for the New Jersey Builder’s
Association. A founder of Issues Management, the 15-year-old public
affairs consulting group on Poor Farm Road, he has been representing
NAIOP for five years.
Pizzutillo’s finger prints are on important legislation. What he is
working on now are plans to reallocate funds from the underground
storage tank program (which is virtually completed) to hazardous
cleanup (which has insufficient funds). Another measure would speed
payback to developers that have cleaned up brownfields. The most
is a plan to sell tax credits based on remediation costs to
a plan that is similar to one now used by technology companies who
are not making a profit. "Developers don’t pay a corporate
tax, so they sell the tax credits to a big corporation to expedite
the financing," he says.
Previous administrations had other interests, he points out. Governor
Christie Whitman’s environmental focus was open space. "As the
mayor of an urban area," says Pizzutillo. "Governor McGreevey
got a first hand look at how brownfields development can be successful
and how it can work.
"Brad Campbell is familiar with the issues and will present some
very creative ideas," he says. "If the market exists, these
moves will encourage the market to start translating some contaminated
sites to useful areas. It could be a very exciting time."
— Barbara Fox
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