Thursday, March 15
Avoid Kinks In The Sales Stream
Good selling should flow like water through a hose. But if you’re only getting a trickle out to the garden, odds are you’ve got a kink somewhere along the way. Pravin Philip and his company, Medpower USA, which is based at 18 Cuyler Road, strongly advocate this continuous-process approach to marketing and sales, rather than endlessly fussing with the front end.
Philip is one of several panelists at the New Jersey Technology Council’s seminar “Closing the Sales Loop: Innovative New Tools” on Thursday, March 15, at 4 p.m. at the offices of Stevens & Lee, 600 College Road. Cost: $60. Visit www.njtc.org.
Other panelists include moderator Faye Gregory, executive vice-president of Applied Success; Joseph Roman, president of Accelerant Sales Group in Montville; David Rosen, president of Acrelic Interactive in Warren; and Jill Zoria, vice president of Communifax Corporation in Cranberry, Pennsylvania.
On Philip’s 30-acre estate in Belle Mead, you will find vast vineyards grown for his locally sold wine, but you will not find one television set. He may be the only successful marketing consultant in New Jersey without one. A native of Bombay, Philip attended that city’s elite Cathedral School and Jesuit University, graduating in l970. He began his career as a copywriter and upon emigrating to the United States joined Business News New Jersey where, as he puts it, he “served as the chief cook and bottle washer of marketing. It was here that I fell in love with all things digital.”
This new fascination led him to join E-business giant IBS Interactive as a marketing/sales consultant. In 2001 he took the entrepreneurial leap and formed Medpower USA (www.medpowergroup.com). Medpower provides clients with advertising and publishing solutions as well as website and software development. Philip’s second company, Healthy Neighborhood (www.healthyneighborhood.com), is an alliance of holistic health and fitness businesses throughout central Jersey. He also teaches a course involving digital sales tools at the Wharton School.
For Philip marketing and sales are all part of the flow that leads up to the actual exchange over the counter. To bring this revenue in takes a company’s most precious and costly resource — people’s time. The prime production maxim that time is money, he says, is all too seldom adopted by the sales department.
“These are your revenue producers,” insists Philip. “Every sales employee should act and be treated as an expensive outside sales consultant. This will force efficiency of his time.” There are a host to tools all along the sales/marketing stream that can make salespeople more effective — some are technological, others involve merely a new perspective.
Client winnowing. Assuming that the product niche has been established, compiling and prioritizing a list of potential clients becomes the marketers’ initial major hurdle. In hunting through purchasable sales lists for a good fit for your firm, Philip warns against trying to match it too exactly with a product. Even a seeming knockoff has some unique product traits that create a different market appeal and customer need. Consider first the potential customers, then choose according to the general product area.
This means that if you are selling, for example, solar panels, check out not only lists of solar users, but also lists of environmental engineers and architects. Also search through advocacy groups and government agencies to find their lists.
In assessing a list Philip employs a refined motion sensor method, determining how much actual purchasing activity in your product’s field the list generates. Too often list sellers advertise queries as activity. But it’s buyers, not browsers, who pay the bills. When this list is winnowed down, the sales force can act with more speed and efficiency.
Psyche-first marketing. We’ve all seen the ads that aggressively tout a product’s many features. This is the old l950s’ hard sell, telling the audience with grinding repetitiveness that ours is better and here’s why. But Philip says those days are gone forever. “Today people purchase closer from their hearts, rather than by succumbing to a gadgetry blitz. They are more sophisticated,” he says. A good marketer discerns the psychological dynamic and presents an emotional benefit for the product.
Again, if one has solar panels to sell, before trumpeting them as the most compact units available, even before marketing their environmental value, go to the individual. Talk first about the self-esteem and cost savings the customer will reap. After these benefits have been given, of course, the objective features become important to distinguish one’s product as best.
As a warning on this approach, Philip adds, “I think that if one keeps to positive benefits, it is fine, but I have a moral problem with some of advertising’s more cynical examples, such as making people insecure to sell underarm deodorant.”
Face off tools. Getting face-to-face or live on the phone for the actual pitch is the ideal use of a salesperson’s talent. Now more than ever technology offers several aids that cut time spent on preliminary E-mails, voice messages, and letters.
Recently, for example, panelist Rosen, owner of Acrelic Interactive, sold his company’s WarpSales package to a firm with a tiny, two-person sales team. Using the technology, they were able to keep track of 3,500 clients and make 489 live connections.
WarpSales monitors everyone who comes to a company’s website or answers an E-mail sent by the firm. It instantly alerts the inside sales team that such and such an executive is at his computer, looking at their product. This information is relayed to the sales force who, as if by using psychic powers, phones that executive. Since he is at the desk, odds are good that he’ll answer the phone.
Guided voicemail has also become both a sales tool and a time saver. One sales rep in a small call center works a telephone call past the receptionists and assistants on up to the optimal contact. Upon reaching his line, the caller leaves a prerecorded message, which plays while he moves on to the next call.
Finally Forbes and Business Week in their online editions have led the way with the ultimate targeted ads. When a client logs on, the site immediately recognizes the caller’s domain name and custom tailors only those ads deemed of interest to him. This sci-fi individualizing, while a little creepy at first, is designed to make the reader feel less assaulted and more intrigued.
Just as robots have become increasingly common on production lines, sales forces are finally realizing the effectiveness of computerized sales tools. For years top salespeople have seen themselves as artists, and to see a really good sales rep at work is a validation of that view. Now, with a little help from 21st century tools, they can spend more time at what they do best, and less time digging up, and getting a hearing from potential clients. — Bart Jackson
Monday, March 19
Healthcare: Speaking Their Language
If they cannot read it, they will not buy it. Though one of the simplest communication concepts to grasp, it is amazing how many companies, deliberately or unwittingly, put out English-only product information. America faces an unprecedented immigration. Nearly 12 percent of the country’s population was born in foreign lands. South Brunswick school statistics indicate that 25 percent of students come from families that speak some language other than English at home.
This is a market share not to be ignored.
“As purveyors of healthcare reach out to promote their educational programs, insurance packages, and drugs, they are going to have to mold their message content to the culture,” says Donald DePalma, linguist and international consultant. DePalma outlines the elements to be considered in “Managing Content for Interactions with an Increasingly Multicultural Community.” He is one of many speakers at the Multicultural Healthcare Development and Outreach conference on Monday and Tuesday, March 19 and 20, beginning at 7:45 a.m. at the Hyatt Regency in Princeton. Cost: $1,495, discounts available. Visit www.srinstitute.com.
The conference is designed to share the many creative ways healthcare education and services may be offered to minority and specialized communities in America.
DePalma began his linguistic studies as an undergraduate at the State University of New York, graduating with a bachelor’s in English and Russian literature in 1975. In the process of gaining his Ph.D. in Slavic linguistics from Brown University, he also took graduate studies at Moscow Linguistic University, Charles University in Prague, and ILISA in Costa Rica.
Then, stepping out of the ivory tower in the early l980s, DePalma co-founded Interbase Software, which developed informational database servers. He then joined Forester Research as an international consultant. Later he combined his love of linguistics and high tech communication as vice president of Idiom Technologies, a supplier of software to aid businesses that were expanding into global markets. He now heads his own firm, Common Sense Advisory, which has offices in Lowell, Massachusetts. It designs websites and strategies for global marketers.
While at Idiom Technologies DePalma wrote, “the blunt truth is that most corporations cannot manage content in one language, let alone many.” But be it in healthcare or any business, those who don’t make a few cross-cultural adaptations are doomed to failure.
Mother tongue-tied. With current technology, translations into countless foreign languages can and should be made to get the message across. But DePalma warns that there is no such thing as an exact translation. All language is culturally shaped and the various shades of meaning will color the promoter’s message. Even simple forms of address, such as the Spanish “Senor” and the English “Mister,” are not interchangeable. The former has tones of respect, the later, used alone, can be interpreted as disparaging.
Additionally, Chinese is not always Chinese. The Mandarin you learned in a Berlitz school may make you incomprehensible in Canton, and you definitely will not be understood in China’s western provinces. Dialects pervade all language systems. India is an intriguing dialectical mishmash. Even in South America substantial percentages of the people speak in their pre-Spanish native tongues. To communicate within Peru, one had best add the Incan language of Quecha to basic Spanish to broadly convey a message.
Within the United States multilinguistic attempts have been made, particularly in the vital healthcare field. But a recent report by DePalma’s fellow conference speaker Monica Torres notes that due to dialectical differences, a surprising percentage of Hispanic women could neither read nor understand Spanish language educational programs on reproductive health.
Cultural cross-ups. “I always laugh to see non-Hispanic business owners put up festive Cinco de Mayo banners in Puerto Rican neighborhoods,” says DePalma. As outsiders, we tend to throw one blanket over all groups that speak a given language. The Cinco de Mayo festival celebrates Mexican Independence. While some South American nations have adapted it as a day to celebrate their own independence, trying to market this to Puerto Ricans is a little like honoring New Yorkers with a Bastille Day parade.
Whether one’s customer base is geographical or connected only by product use, certain cultural groups and subgroups are prime targets. DePalma insists that we understand their psychological and cultural motivations.
“Certainly Chinese clients will change their buying habits around Chinese new Year,” he says. The same goes with legal considerations. Even though they live or operate within U.S. borders, many customers are still bound, either actually or psychologically, by their homeland’s legal customs. Adapting to that foreign framework is not only courteous, but can also be a dealmaker.
Blending solutions. “The key,” says DePalma, “is to identify main language and culture groups and be prepared to work with them.” It is not necessary to have translators in the wings who can speak every imaginable dialect. But it is important to identify the language and dialect spoken by large groups of potential customers and then to craft messages they can understand.
Furthermore, finding a culture’s avenues of trust and dealing through them provides credibility. For healthcare purveyors, faith-based centers often provide bases of community and credence. Working through a church or mosque not only lends an attitude of caring, but is an excellent source of translators. Similarly, childcare centers and educational institutions can be effective communication hubs.
Sculpting content into the correct language, dialect, and with the effective cultural motivators is no easy task. But those who can master it will have a leg up. Globalization and America’s wave of immigration increases. More than 15 percent of the nation’s immigrants arrived within the last five years. Even more are coming. Will your company be ready?
— Bart Jackson
Prostate Cancer: Not Color Blind
What do African Americans, Vietnam veterans, and Hispanics have in common? They are, in order, the three top groups most victimized by prostate cancer. While disease may be color blind, it does play harsh favorites in regard to cultures, life experiences, and genetic dispositions.
Virgil Simons, founder of the Prostate Net, explains when he speaks on “Barbershops and Health Initiatives” at the Multicultural Healthcare Development and Outreach Conference on Monday and Tuesday, March 19 and 20, beginning at 7:45 a.m. at the Hyatt Regency at Princeton. Cost: $1,495, discounts available. Visit www.srinstitute.com. The conference is designed to share the many creative ways healthcare education and services may be offered to minority and specialized communities in America.
At age 48, Simons, an African American and Vietnam veteran, was diagnosed with prostate cancer in l995, when it was commonly referred to as “the old man’s disease.” He wasn’t old, and he was not about to go gently into anywhere without a fight. Raised in Chicago, Simon graduated from Loyola University with a bachelor’s in marketing in l967. He then served in Vietnam for two years.
He returned from Vietnam and began working for Sears as an apparel buyer and merchandiser. Following the Nixon trade initiative, he represented that firm in dealings with China, Poland, and Russia. Coming to New York, Simons earned an MBA from Baruch College. He continued apparel merchandising for Celanese, then joined Clark Simons as a portfolio manager. In l977 he launched his own marketing firm, V. H. Simons & Associates. In l995, the year his cancer was diagnosed, Simon was working in Barcelona, marketing Doji fabrics.
Successfully emerging from prostate cancer surgery, Simon turned his marketing and research skills to combating the disease. Thousands of Vietnam veterans, he found, were beginning to contract prostate cancer as a result of U.S. Army’s use of Agent Orange — the defoliant that spread dioxins to as many Americans troops as to the enemy. Simon was outraged at this cancer by friendly fire. He also learned that while black men have a 59 percent higher incidence of prostate cancer than do white men, they were 128 percent more likely to die from it.
This realization spurred Simon to form the Prostate Net, (www.prostate-online.org) an educational and support resource based in Secaucus, as well as a lobby for cure. Today the website averages 30,000 hits annually and is linked with other similar groups in 50 countries worldwide. “It is, after all, a major public health crisis, with 220,000 new cases striking an increasingly younger population each year,” says Simon.
Why minorities? Several studies have shown that African Americans and Hispanics, who together comprise 25 percent of the country’s population, contain a genetic predisposition toward prostate cancer. While evidence of genetic triggers for the disease is growing, it is not conclusive.
Simon says that the incidence of the disease among lower socioeconomic groups is a result not so much of heredity, but of lifestyle. High fat, fried foods, which are inexpensive and readily available, correlate with all types of cancer. Charcoal grilled food also accelerates most cancers. Conversely, those cultures adopting a Mediterranean diet, with ample red tomatoes, receive the cancer retardant effect from that fruit’s lycopines.
“The low income black or Hispanic man worries primarily about paying the rent, getting gas for the car, and clothes for his kids,” says Simon. “For him, personal health is a low priority. And when he does go to the doctor, he is not as likely to get the same in-depth advice as a wealthier man.”
The African American culture has inherited a host of anti-medical fears, he says. Many balk at the invasion of a rectal exam, and the memory of the 1932 Tuskegee syphilis experiment, in which many diseased blacks were denied treatment as part of the experiment’s control group, still lingers. Fearing a repeat of such inhumane experimentation, some men avoid all physicians.
Hometown solution. Son of a Chicago barber, Simon knew where the credibility lay with lower income people. The wisdom shared by patrons awaiting a shave and a haircut felt more real than any hospital pamphlet or website flickering across the Internet.
Using these bastions of personal service, Simon lined up a series of barbershops to act as conveyors of prostate facts. In addition to a haircut, customers are given a questionnaire to fill out. They are walked over to a computer, in which they entered birth dates and other key facts. An appointment for a PSA test and education are then made.
The barber himself is given some education, which makes for a handy topic of conversation between snips. Many men may sneer at doctors, but every man trusts his barber.
Prostate treatments. The importance of getting a PSA test along with a digital rectal exam every year as part of a physical cannot be over-emphasized. The old maxim of PSAs only after 50 has been moved back to 40. If caught early, before the cancer expands beyond the prostate capsule, options are much less invasive and full recovery much more likely.
Many fear that with all prostate treatments the cure is worse than the disease. Simons insists otherwise. “Yes, many years back prostate surgery frequently meant incontinence, loss of potency, and lots of pain,” he says. “But now in almost all cases men can expect to come back to a full normal life.”
— Bart Jackson
When A Client Is Just Too Troubled
Consultants are called upon to assist companies in trouble, and while all consultants hope the companies they work with are financially sound, often the trouble ends up involving money, says Frank DeLuca, a partner in Cambridge Financial Services in Edison. Some financially troubled clients present an opportunity for the consultant, but others are a risk, he says. All consultants should learn to recognize the signs of financial difficulty so that they can make the right decision in choosing to work with a financially troubled business.
How do you identify the signs of financial problems? And what should you do once you have identified them? DeLuca talks about his experiences at the next meeting of the New Jersey Chapter of the Institute of Management Consultants on Monday, March 19, at 6 p.m. at the Marriott Forrestal. Cost: $60. For more information contact Tom Lombardi at 732-821-4846.
Cambridge Federal “works with mid-sized companies to help them to grow, to obtain financing, and to solve problems,” says DeLuca, who has over 20 years of banking experience in New York and New Jersey. He has held positions in senior management, banking, finance, corporate development, strategic planning, commercial lending, business mergers and acquisitions, and troubled company restructures. He opened his own company in 1988 and merged with Cambridge Financial Services in 1989.
There are several “early warning signs” that consultants should be aware of, he says. The most obvious is not getting paid.
Where’s the check? Why Not? That’s the first question the consultant should ask when he finds out his check isn’t in the mail. Finding out why will give him clues as to how to help the client, says DeLuca. “Is the cash flow impacted because the client isn’t collecting from his customers? Or are people not being paid because someone has mismanaged finances? What other areas are causing problems?”
One of the first things a consultant should do to find out where the problems lie is “a simple analysis and audit of financial records to get a capsule picture of the company,” says DeLuca. “Ask questions. Look at collections and receivables. Ask why the money isn’t being collected.”
For example, are clients not paying because they are unhappy with the product or service? Or is the company carrying too much inventory? Often the first symptom the consultant sees is only the tip of the iceberg. Says DeLuca: “Every line you pull leads to another line.”
Are the wheels spinning, but not getting traction? A company may seem busy, but can still have a problem. “A computer service company may be sending all of its technicians out every day, but if they are returning to the same clients over and over again, they are not fixing the problem and so are not getting paid,” says Deluca
How is employee morale? Another subtle clue to a company in financial trouble can be “grouchy employees, unrest, or bickering,” says DeLuca. “Talk to the employees. Have their bonuses been cut recently? Are they not getting paid on time?” Unhappy employees may not be working as hard as they did in the past. They may slow down in manufacturing or make fewer sales calls. A consultant can work with management to solve these problems and get the company back on track.
Is management wearing blinders? “I’ve never had a client who has made any mistakes or done anything wrong,” says DeLuca. Management denial is often at the heart of a business problem. “Whatever the problem, the management wants to believe that ‘tomorrow is another day,’” says DeLuca. Unfortunately, if the problems aren’t dealt with the company will run out of tomorrows.
Are costs out of control? DeLuca talks about Company X, a manufacturer whose sales had increased while profits decreased. The consultant’s job was to find out why and turn the situation around.
“In this case the company’s overhead was too large,” says DeLuca. “There were too many employees.” Buying practices also come into play. The company was not getting the margins it needed on its raw materials. Furthermore, its prices were too low and didn’t cover the cost of overhead.
“Management thought that the more they sold the better off they were, but in this case the opposite was true,” says DeLuca. “The more the sold, the worse shape they were in.”
There was a solution to the problem, says DeLuca. The company surveyed all of its costs of doing business and brought prices in line with expenses. “With the right help the company was able to make more money by selling less and doing it more efficiently.”
Is one-price-fits-all hurting the bottom line?A second example is a service business. Company Y, says DeLuca, was a moving company that specialized in moving businesses. “For a company like this there is no set formula. Each job has its own facets,” he says.
If the sales person bids a move based strictly on mileage from point A to point B, or even gross weight of the move, it will soon find itself losing money. “You need to look at all of the underlying aspects,” says DeLuca. Are there items that require special handling or equipment to move, or are there extremely heavy items? How much time will it take to pack? What about the cost of equipment such as dollies and trucks?
Sometimes, says DeLuca, it is better to walk away from a prospective customer rather than take on a job where you will lose money. “If you don’t know the costs, you don’t know when to walk away,” he says.
Not every consultant is asked to look at financial issues, and not every consultant is trained in this area, says DeLuca. A marketing consultant or a human relations specialist may not be able to ask to look at the books, but he should still “look around with his eyes open and be able to spot potential trouble” to protect himself as well as to help his clients.
“As a consultant you don’t go into an area where you are not professionally trained,” says DeLuca. “Stick to your own knitting.” But all consultants should be aware of the clues that point to a financial problem and recommend that an expert be brought in.
— Karen Hodges Miller
Thursday, March 22
Mercer Summit To Address Key Economic Issues
Population demographics and economic realities are changing in New Jersey, and two years ago Jerry Fennelly, president of the corporate real estate services firm NAI Fennelly, decided that these issues needed to come out from under the rug and into the light of day. To talk about the economic realities in both Mercer County and the state of New Jersey, he held a real estate forum in 2005 to bring together business and government.
Quickly realizing the importance of such an economic forum, he reached out last year to the Princeton Regional Chamber of Commerce and Mercer County officials. They were enthusiastic, and Fennelly was able to expand the event, which sold out last year at 260 attendees.
The Mercer County Economic Summit takes place this year on Thursday, March 22, at 3:30 p.m., at Princeton University’s Friend Center, at the corner of William and Olden streets. It is a joint presentation by the Princeton Regional Chamber and the Mercer County Office of Economic Opportunity. Event sponsors include Fox & Rothschild, Genesis Biotechnology Campus, NAI Fennelly, PSE&G, Verizon, and Wilmington Trust. For more information and registration, go to www.princetonchamber.org or call 609-924-1776.
This year, says Fennelly, “our goal is to motivate, invigorate, and get the citizens of New Jersey to think of ways to make New Jersey a better place for business.”
As New Jersey is facing big changes in population demographics and in job mix, he believes clear thinking and effective problem solving are essential.
A central issue is the exodus of population from New Jersey over the past two years, with 59,000 leaving in 2005 alone. One group on the move, he says, are the baby boomers who are starting to hit 60. Those with a lot of capital are moving to places like New York City and those with less to the south or southwest.
Further complicating matters is the leakage of jobs. Both relatively high-paying jobs in the software industry and low-paying phone center jobs, for example, have moved to India. Manufacturing jobs have been moving to China for 25 years. New Jersey’s edge in the pharma industry is also being eaten away. “Bio jobs have shifted to California, Boston, Florida, and North Carolina,” says Fennelly. The highly educated biosciences work force, he explains, “is transient because it is so highly paid.”
Fennelly wants to ask attendees difficult questions that will have important consequences for the state. For example, are you for population growth or against it? Thinking narrowly about crowding and congestion, people might respond with a kneejerk “no.” But as the population drops, he points out, real estate values drop, jobs leave the state, and demand for products and services decreases. On the other hand, the population growth that New Jersey experienced between World War II and a couple of years ago, he says, means rising real estate values, abundant jobs, and businesses locating to or expanding in the state.
New Jerseyans, says Fennelly, also need to decide whether they support or oppose privatization and regionalization of government services. Building permits, for example, are now either politically driven, he says, or “so slow that to get a building permit for inside space can take from eight weeks to five months.” By privatizing services like these, he says, service can be improved and operating budgets of towns and cities lowered.
Another strategy for saving money is regionalization of services like school systems and police forces. One down side of regionalization is the potential loss of jobs. And complicating matters is that the people involved in making decisions for regionalization may be looking at cutting their own jobs.
Another question on the table in Mercer County is whether to build transit villages. The idea, instituted under former governor Jim McGreevey and based on the smart growth concept, is to locate high-density retail and residential development around train stations. Theoretically people would use trains more and drive less, thereby helping the environment, and these centers would stimulate the regional economy. But, says Fennelly, West Windsor and Hamilton residents have been resistant to this kind of change.
Fennelly believes that fear of change is simply endemic to the human psyche, and he quotes a friend who says he is against transit villages because he doesn’t want his parking space to move. It is this kind of narrow, individual-oriented approach that Fennelly hopes to help overcome at the summit, where he hopes people will ask: What’s good for everyone, not just for me?
The keynote speaker at the summit is Robert J. Christian, executive vice president and chief economist for Wilmington Trust. Five breakout sessions will follow. David G. Kostinas, president of David Kostinas & Associates, moderates the session on “Healthcare: Mercer’s Economic Engine,” focusing on why three new medical centers are opening new facilities in the region. Karen Alexander, president and chief executive officer of the New Jersey Utilities Association, moderates “Saving Energy: New Innovations,” exploring new innovations in energy production in Mercer County.
George R. Zoffinger, president and chief executive officer of the New Jersey Sports and Exposition Authority, moderates “Real Estate Development: Live, Work and Play,” talking about Mercer County as a venue for new or growing businesses, with excellent schools, tourist destinations, and a diverse, well-educated workforce. Vincent Scozzari, vice president of V.J. Scozzari & Sons, moderates “Transportation: Getting To Work Will Be Easier,” focusing on transportation developments and initiatives in the county.
Jeffrey M. Hall and Gerard P. Norton, partners at Fox Rothschild, moderate “Biotechnology: Center for Invention,” looking at past successes and future initiatives in the large bio fields such as immunogenetics, cancer research, diabetes, infectious disease and neurocognitive research.
Norton, the chair of the intellectual property group at Fox Rothschild, received a doctorate in biomedical sciences from the Mt. Sinai School of Medicine in 1986, did a three-year post-doc at Merck, then moved to Pennie & Edmonds, which put him through Fordham University Law School. His bachelor’s degree in biology is also from Fordham.
Norton will be talking at the summit about building a biotech company in Mercer County, which he sees as a great environment for the health sciences. He notes the tremendous intellectual environment and pharma presence in Mercer County, citing in particular four large institutions: Bristol-Myers Squibb, GE Healthcare, Novo Nordisk, and Princeton University, and noting that there are many more important biotech and pharmaceutical companies, including Novartis, close by.
Driving down the Route 1 corridor between New Brunswick and Princeton, he observes, “You can swing a dead cat and hit 20 companies.” Mercer County, he says, “is a microcosm of the state of New Jersey in terms of biotech, life science, and pharma.” Biotech, he adds, is a $300-billion-dollar industry, with $30 billion focused on molecular monoclonal antibody research alone.
According to Norton, there are four pillars to building a biotech:
Creating a management team. Norton says that companies need talent at the top that offers both visibility and experience. Someone from big pharma is probably a good choice. Norton cites Roy Vagelos, a medical doctor who was chief executive officer of Merck. When he hit 65 and mandatory retirement, he became chief executive officer of Regeron in Tarrytown, New York. A new company also needs a chief operating officer or chief financial officer with tremendous experience in financing.
Financing the operation. This involves a knowledge of just what venture capital companies are open to making investments in the life science, and of all of the state programs available to start-ups.
Developing a patent portfolio. “The path to success for these companies is through their patents,” says Norton. Patents stake a claim as to what the company owns and give it 17 years of protection from date of issue against anyone making the same product or using the same processes. In the financing stage, he adds, companies need to make sure they have the money to cover patenting costs.
Ensuring sufficient ongoing financing. If early-stage entrepreneurs with a scientific background are thinking about developing a company, they need to talk to a chief financial officer about how much money they will need to raise at each stage of the company’s growth.
Early on they will need enough money from venture financing to hire scientists, rent laboratory and office space, and hook up with academic scientists. The second stage will require a lot more funding for product development, safety tests, and clinical trials, which themselves can cost a billion dollars and take 10 years.
Some new companies, says Norton, are trying to get ahead of this long development curve by focusing on new uses for products already approved by the Federal Drug Administration.
Norton is now working with the Biotechnology Council of New Jersey on a Corzine initiative that, he says, will provide “a tremendous opportunity for developing biotech within this county and region of the state.” The idea is that big pharmas and biotechs will create jobs by donating patents to the state in exchange for income tax write offs from both the state and the federal governments.
Often companies have patents sitting on the shelf, he explains, both for products that looked promising, but have safety issues, and for those that no longer fit into the company’s strategic plan. Through a program of the state of Delaware, he says, Dupont and Hercules donated 255 patents to the state, and Dupont received a $50 million tax writeoff — and in addition to the dollars, the company gets points for being a good corporate citizen that is bringing new jobs into the state.
Norton’s colleague, Jeffrey Hall, mentions another plus for entrepreneurship in Mercer County — the Genesis Biotechnology Campus, which is being developed from scratch on Kuser Road in Hamilton. Plans for Genesis include 410,000-square-feet of space for life science companies. Occupancy is slated for the first quarter of 2009. It will offer modular office and laboratory space, and will be flexible enough for companies to add more space as they grow. There is a hope that collaborations will develop between schools and the scientists working on the campus.
Fennelly would like to see consumers, businesses, academics, and government collaborate on solutions to Mercer County’s problems, and the first step is an honest airing of the issues. “You can put your head under a rock,” he says, but the problems won’t go away. The politicians are looking for ideas to move the state into the future, and Fennelly’s hope is that the summit will generate some good ones. “I’m trying to get people to think differently,” he says, “and I want to promote New Jersey as a great place to be, work, and live.”
— Michele Alperin