These articles were written by Peter J. Mladineo and Barbara Fox
Overcoming the Barriers To Growth
In 20 years of working with growth-oriented companies, Aldonna Ambler has observed an unwritten rule: a true entrepreneur isn’t afraid to grow a company. The owner of six businesses, including Ambler Growth Strategy Consultants, based in Hammonton, Ambler is adamant about her definition.
"I tend to deal with people who have been trying to go for growth, who have been oriented to creating jobs, risk takers," she says. "Dozens of my clients are the people who appear on the Inc. list of fastest growing companies. They really are entrepreneurs."
In order to grow, she maintains, entrepreneurs need to cast off selfish
pretensions for being in business. "One of the distinctions I try to make is when are you running from something and when are you running towards something. If you’re really running towards something, you have a much better chance to grow the business."
The key to entrepreneurism is located in the core of why someone opens a business, Ambler explains. The motives better be pure. "For some people in business, the primary reason they’re in business is that something went wrong," she says. "They had a corporate job they didn’t want, they got laid off, they can’t get along with authority, or they want to be home with their kids — all nice reasons to be in business, but not a way to drive growth in a
business. They drive the start-up of a business, but that’s not what’s going
to grow it."
Fond of terminology, Ambler tags those businesses started for the wrong reasons as "incorporated careers." "You’d be surprised how many people that look on the surface like they’re entrepreneurs are just business owners," she says.
Ambler is a Certified Management Consultant (one of the first women to achieve this) and only the eighth person ever to attain both the CMC and CSP (a public speaking certification) certificates. She is the featured speaker at the first
of Princeton Chamber’s Chamber College series on Thursday, January 29, at 8 a.m., at Sarnoff Corporation. The three-hour session costs $50 for those who are not chamber members and is sponsored by Edward Jones Investments, PNC and Summit banks, and Withum Smith & Brown. Call 609-520-1776.
To become an entrepreneur, a business owner must go through a rite of passage, which Ambler calls a "magic moment" when the owner suddenly changes the goal of the business very subtly. "They seem go back into business," she says. "The public can’t see it. They don’t announce it but they’re different that day. It’s really transforming." Soon after, the business owner will have another epiphany: the realization that the business must start turning a profit. "That sounds corny too, but those two things are the two barriers to growth that I
address," Ambler says.
These metamorphosed outlooks often foster a host of other changes in the way the business is run. Hiring practices are usually one of the first on the list to change. "At first you hire cheap and loyal, otherwise known as relatives," says Ambler. "You cut corners and you’re trying to keep the costs down, and you don’t want someone too smart and aggressive. But when you actually have these
moments, then you want to have smart employees. You don’t want to have someone who’s just going to shut up and listen. You want to hire brights."
Related to this is the notion that employees will treat an entrepreneurial
minded boss differently. "If you’re communicating on a daily basis that you’re really just an incorporated career and it’s just about you, why should they stick around past 5 o’clock?"
Some entrepreneurs manage to grow their businesses at a mad clip despite their selfish motives, Ambler concedes, but their expansive efforts often meet catastrophic ends. "If the reason that you were growing was market dynamics instead of selfishness then you’ll do things like build in quality control and you’ll do things like pace the growth," says Ambler. "If it was really about the shore house and making more money, if it wasn’t for productive things, the company comes unglued. Uncontrolled growth you can usually trace back to greed."
For business owners who haven’t had their moment yet, Ambler has this advice: don’t stick a toe in both waters. Don’t start hiring expensive people or implementing quality control teams if you’re just trying to make your $50,000 to $100,000 a year. "Don’t beat yourself up if you’re not bringing in a million bucks," she says.
"Nobody’s going to change until there’s some dissatisfaction in their soul."
Breaking the Real Estate Barrier
One company that has been able to sustain the kind of
growth plugged by Aldonna Ambler in the last article is Pharmacopeia, the designer of a vast molecular library for pharmaceutical R&D. The five-year-old company went public in late 1995, and has grown from two to more than 200 employees. Lewis Shuster, the CFO, explains that growth is the company’s growth plan. "We have very major ambitions to continue growing throughout the company," he says. "We have a very strong technology and want to continue to
The problem is space. Headquartered at 101 College Road, Pharmacopeia faces the same problem faced by many other companies on the fast-growth track in central New Jersey: ridiculously low vacancy rates. Pharmacopeia has managed to overcome this obstacle by including a creative growth strategy in its business plan from the beginning. "The company’s strategy since we were founded was to get the office space and lab space to accommodate that growth," he adds.
Shuster and Will Mayhall, CEO of Princeton Financial Systems, another Princeton area company growing at hyperspeed, address real estate strategies at the New Jersey Technology Council on Wednesday, February 4, at 8:30 a.m. at the Woodbridge Sheraton. Cost: $30. Call 609-452-1010.
Lab space, it turns out, is about as scarce as Class A office space in the area. "There is a real shortage," says Shuster. "I’m not aware of any good inventory out there at all."
Pharmacopeia’s first option was to build a new lab, which has obvious disadvantages. "If you wanted to just take a piece of land from scratch and build the building you’re talking about an awful amount of lead time," says Shuster. "It was essential that we find existing buildings and lease them."
With the aid of Tom Giannone at the Julien J. Studley agency, pharmacopeia found other companies with lab space that were planning to leave the area.
Enter Enichem, the Italian developer of polymers and elastomers based at the Jersey Center Metroplex in Monmouth Junction. Enichem had hit hard times in New Jersey and began moving its operation to Houston, Texas a year ago. As Enichem began phasing out its New Jersey presence, Pharmacopeia began subleasing space and took over their entire lease when the firm moved out completely. "We had been talking to Enichem since our company was first formed," says Shuster. "Basically their misfortune was our fortune."
Pharmacopeia also found some lab space at Eastpark Boulevard in Cranbury that was designed for Morphogenesis, the developmental biology firm that researched cell differentiation drugs. This company suffered a misfortune when the empire of its principal funder, David Blech, collapsed, forcing the firm to close in 1996. "The back part of the building was built out for Morphogenesis; when that company went under we were able to step in and take it over," says Shuster.
By summertime, the firm will be consolidated to two buildings totaling 145,000 square feet. This will provide enough room — for the time being. Its quarters will suffice for a "couple more years," Shuster reports. "Then we’re back to looking for more space."
In the calculating and deranged tradition of David "Son of Sam" Berkowitz, Jeffrey Dahmer, and now Theodore Kaczynski, comes a new mold of terrorist. No, he doesn’t kill, maim, or dismember, he bankrupts, warns Susan Edwards, the
Montgomery Commons-based psychologist.
Edwards is referring to what she calls "serial litigators" — experts in the art of suing to make a profit. "A serial litigator is a person who has a lifestyle of suing for profit and/or defrauding businesses for profit," she says.
While their victims are usually not left bleeding on a cold basement floor, Edwards stresses that a serial litigator is tantamount to a serial murderer in malice. "It’s a person who has a certain behavior again and again and again who harms," she says. "It is not the prosecution but the behavior. In other words, somebody might be a serial killer and kill 20 people, but only three of those murders might be litigated. However it’s the behavior of killing people that’s
Edwards has written a book warning contractors about serial litigators, "Dangerous Clients: How to Protect Yourself," (Miller Freeman, $39.95). She is also becoming a national herald on this issue. Edwards speaks at the Rotary Club of Princeton on Tuesday, February 3, at noon at the Nassau Inn. Call 609-924-5518 for $15 reservations.
Edwards is considered an expert in the custom building industry. She serves on the board of Custom Builder magazine, and she was quoted last June in the Wall Street Journal in a story about mega-rich clients who supplement their huge incomes by habitually stiffing contractors.
Edwards identifies serial litigators along these lines: either they have initiated three or more legal similar legal complaints, or they made regular use of loopholes in the law or within an industry, or they acted to defraud or withhold money from a party in three or more cases. "For example a customer may owe $10,000 to three or more subcontractors," she says. "Whether those complaints went to trial, were settled out of court, or didn’t make filing stage, the individuals managed to make money either by avoiding payments
they owed to others or getting others to pay them regardless of issues of fact. Sometimes customer dissatisfaction masks consumer fraud."
Edwards has chiseled this brand of skullduggery down to a science, but, she cautions, so have serial litigators. The serial litigator’s fees are based on a simple formula: figure out what the victim’s attorney fees are going to be, then set your price below that. "I withhold $10,000 from three subcontractors, if it would cost each of the subcontractors $15,000 to go to court, I have made $30,000."
They also thrive on legal loopholes. If a law passed 15 years ago says all of the buildings need to have a particular modification, the serial litigator would make it a business to seek out older buildings that didn’t have those modifications. Once a few were found, the serial litigator would file a class action suit against the building owners, naming him or herself as a person willing to take the money for the damages. "Once they discover it they use it again and again and again," Edwards adds.
There are only three recourses against a serial litigator: pay up, stand up for principle and fight (and pay more), or don’t enter into a business arrangement with them in the first place.
This latter method is the most pain-free, Edwards reports, and it’s able to be accomplished in cyberspace. She refers her clients to Lexis Nexis, the fee-based online law service that has records of most court cases in the country. "Litigation is listed by county, so depending on the counties throughout the United States where the person has lived, that’s where the lawsuit trail would be identified," she says.
Serial litigation is so disastrous in the custom home building industry because subcontractors, who work on homes that could range from $350,000 to $11 million, often generate their entire revenues from one project. If they should get hoodwinked out of even a portion of the bill, their business could be ruined. "With this much money involved you literally are committing your whole businesses with one customer," says Edwards.
"There was a dynamic I realized. These men who were custom builders would say, `I was builder of the year and now my business is in bankruptcy and I’m bankrupt because of this one client.’ And I saw there were certain personality types who were high-risk individuals who tended to be involved with serial litigation behavior."
Edwards’ counseling service is rife with sob stories from defrauded contractors. One builder called Edwards, complaining that his customer,
for whom he had built a $2 million house that won an award, was withholding
$200,000. "I talked with the builder and his attorney and asked him to do a LEXIS search,’ says Edwards. "The person withholding the money had sued 10 corporations in eight years. In all of those cases the person ended up being awarded money. This builder ended up being the 11th lawsuit. These 10 lawsuits were over a period of eight years. This particular builder was in a quandary in how to handle this. Had he used my screening inventory he wouldn’t have taken the project."
Coming Soon: Super Wireless?
The purveyor of a possible wireless telecommunications standard speaks at the Princeton Chamber on Thursday, February 5, at 11:30 a.m. at the Forrestal on College Road. Call 609-520-1776. He is Shant Hovnanian, CEO of CellularVision, the New York City-based providers of the only local multipoint distribution system (LMDS) licensed by the FCC.
Local multipoint distribution is nicknamed "super wireless," and enables wireless delivery of information using "last mile" wireless transmission. It allows data, Internet services, multi-channel television, telephony and video to be transmitted in the 28 GHz frequency range, at 1,300 MHz of bandwidth, the same rate as fiber optic cable. Using LMDS, consumers can get high speed Internet service that’s 20 times faster than the traditional 28.8 modem, at prices considerably lower than ISDN service.
Currently, CellularVision has a license for the New York metropolitan area. It offers Internet access, television service, and Bloomberg News to its customers. It successfully tested telephone service and video conferencing.
Hovnanian, whose father and uncle started the family-owned real estate empire, was also president of the V.S. Hovnanian Group, a vertically integrated real estate development group. With a BS in economics from Penn, he started CellularVision in 1986; the company is now traded on NASDAQ (symbol CVUS).
Meet the Capitalists
The New Jersey Entrepreneurial Network holds its annual venture capital panel on Wednesday, February 4, at noon at the Forrestal. The cost is $35. Call 609-279-0010.
The panelists are Tom Balderston, of TDH Ventures,; Peter Ligeti, of Keystone Ventures; David Plimpton, a principal of the recent start-up venture firm, Plimpton Yang (U.S. 1, November 12, 1997); and Steve Hobman, of Progress Bank, a recent start-up that supplies bank financing to venture capital-backed entrepreneurial companies.
A good percentage of those who work in Princeton live south of Princeton, and many are in Bucks County, so a night school close to your home, the Learning Studio in Langhorne, may be just right for you. It stresses low stress and is billed as the "Health Club for Your Head."
Try "Making a Living or Making a Dying," the intriguing title for Martin Smith. Smith suggests he can help you decide that your job is stressful and uninteresting, and in three sessions starting Thursday, February 5, at 7 p.m. he promises to give a step-by-step approach to finding meaningful work.
"Bonehead English for Upper & Middle Managers" (in the tradition of the "XYZ for Dummies" series is certainly more attention-getting than the usual ho-hum "Business English." Catherine DePino teaches the three sessions starting Wednesday, March 4, at 7 p.m. Cost: $69. DePino is a freelancer for such national publications as Catholic Digest and the Christian Science Monitor.
If you’re getting nervous about tax time and promising to do better at bookkeeping in 1998, take a three-hour $65 course in the basics of Quicken. It runs Thursdays, either February 12 or March 12, at 7 p.m., and it can be followed by a more advanced course in personal financial management on Thursday, January 29, at 7 p.m., or Friday, March 6, at 9 a.m.
Other courses are offered in Peachtree, Quick Books Pro, Access, Excel etc. Also available is an arts studio, dance and fitness studio, and cooking school, as well as courses in social and personal enrichment. Philadelphia Inquirer food critic Elaine Tait teaches one of the cooking courses.
Mary Marcoccia, known to U.S. 1 readers for her stories on job finding (November 6, 1996) and "Love on the Net" (January 15, 1997) teaches how to make $60,000 a year as a personal coach. Her two-session $50 course starts Wednesday, January 28, or Monday, March 9. Marcoccia reprises her love on the net success (she found her husband that way) with a two-session $49 workshop "Guerilla Dating," starting Tuesday, February 17, at 7 p.m. Where is this
place? Off 95 South, Exit 29A. Call 215-752-5657.
Women’s Night Out
Who said sports is a man’s medium? Val Ackerman, president of the Women’s National Basketball Association, ESPN broadcaster Robin Roberts, Donna Lopiano executive director of the Women’s Sports Foundation, Carol Blazejowski, vice president and general manager of New York Liberty, and Joetta Clark three-time
Olympic track athlete — all will participate in the "Powerful Women in Sports and Business Forum on Thursday, February 26, at 4:30 p.m. at the Meadowlands.
Ticket prices range from $25 to $60 and include a ticket to the Nets vs Sacramento game that evening. The reception following the forum at 6:15 p.m. is $20 extra and is limited to 750 people. The event benefits the Women’s Sports Foundation, established in 1974 by Billie Jean King. For tickets call 800-7NJ-NETS or 201-935-8888.