Princeton 08540. Richard A. Maloy Jr., president. 609-924-2226; fax,

609-924-5086. Home page: www.insurehitech.com.

Top Of Page
Justballs!

If Steven Spielberg were making a film about how a tiny

Internet start-up manages to reach an IPO, it would have lots of

quirky

characters, exotic locales, special effects, and heart-warming family

reunions. As it happens, Jim Klein’s true-life script reads pretty

much the same.

A marketing guru from Hollywood and, coincidentally, a friend of

Spielberg’s,

Klein came east six months ago to be the CEO of Justballs.com, the

Kingston-based online game ball vendor. The former president of

Universal

Studios Consumer Products Group, Klein was responsible for the $1.5

billion merchandising campaign behind "The Lost World," and

earlier was the driving force behind brand names like Avon and Swatch.

He replaced founder Jim Medalia as CEO of Justballs in February and

emigrated back to his native New Jersey.

The world’s only website devoted to selling balls, Justballs was

founded

in 1998 and is expanding from 2,600 square feet on Route 27 in

Kingston

to 10,000 feet at 100 Canal Pointe in early September. In 1998 there

were five employees. In 1999 it had doubled in size. Now it has 30

employees and expects to grow to 50. (Sales or investment figures

are not available.) The lead investor and chairman is Internet guru

David Wetherell, the CEO of Massachusetts-based CMGI, known for his

smart Internet picks.

Justballs’ has gained national recognition, but rather than push the

company to the edge with an advertising blitz, Medalia has remained

committed to building up the company’s infrastructure. Thus the

well-credentialed

Klein.

Although he brings lots of experience to the company, Klein also

brings

that Hollywood flair for drama and storytelling, right down to his

enthusiasm for balls. "The essence of a parent/kid relationship

and team balls is a forgotten story," he says. "Balls are

a $5 billion a year category, and we are the ball people."

Then there’s the story of Klein himself — how he gave up his home

in the mountains of Malibu for a cramped hotel room in New Jersey,

traded prestige and power for a vision. "When you’re the head

of a division of a major entertainment company, I have to admit you’re

at the top of the world," he says. "If you’re going to do

a start-up you have to give up the limos, fancy hotels, and you have

to roll up your sleeves and get things done. I’m more of a populist

anyway, so that’s O.K. I come from the world of politics and not

working

very well together, and everyone here is like family. These people

are committed to making it work. "

For E-commerce to work, flexibility is a must, and Justballs has

indeed

changed its business plan. It is no longer pursuing the retail market

with the same energy it did last year. "When you are a startup,

you start up on one premise and then the market moves to a different

piece," says Klein. "The whole marketplace has changed, and

we have broadened what we are. We are not at all de-emphasizing

retail,

we are just not putting money behind it. The economics of retail don’t

work."

The revised business plan: To continue to focus on supplying balls

to colleges and institutions, but also to help colleges raise money.

Justballs will link the institutional market and the corporate partner

by using a powerful symbol — the regulation ball. So if you attend

a sports banquet, you can go home with your very own regulation ball

imprinted with the college’s name, the sponsor’s name, and your own

name.

"These are high quality commemorative items," says Klein,

who refers to the ball as the "affinity symbol of sport" and

the "tool" used for linking sponsors with colleges and

consumers.

"The colleges need balls for sports programs, but the marketing

director also has to put people in seats, and the promotional tools

can be the balls. No one else is doing a personalized ball experience

with full-size authentic game balls."

Late entrants to this market would need to acquire rights (this

company

already has exclusive rights with 500 universities and major college

conferences) and expensive in-house laser engraving equipment.

"Based

on fundamentals and marketability, we are winning," says Klein.

"We do this very well."

The retail trade, he says, is going to grow naturally by itself.

"We

have loyal customers and are creating great brand awareness in

institutional

markets, so our brand name is getting out there. The Little League

coach also has a daughter playing soccer and he comes to us to buy

her ball."

A baseball player himself, Klein grew up in Bergen County, where his

father was an FBI agent prior to working with Merrill Lynch. Klein

majored in history at Rutgers, graduating with the Class of 1974,

and studied marketing in an MBA program at Columbia. While there,

he did a case study on Avon, the multi-national cosmetics company,

which led him to the company after graduation.

At Avon, Klein became the youngest vice president in the company’s

history. In addition to leading a $750 million division of beauty

products, he helped the company break away from its old image as a

home-based distribution method to a true, market-driven beauty

products

company.

In 1988, after 12 years with Avon, Klein was hired by SMH Inc., the

Swiss makers of Swatch watches. When the company wanted him to move

to Switzerland, he opted instead to turn around a struggling West

Coast toy company called Applause. "I’m a bit of a control freak

and I like running things, and Applause had probably the best

portfolio

of children’s products around," says Klein. "I have to like

the product to

get into it," he explains. "I love cosmetics because that’s

pure marketing, and kids stuff is fun because I have kids myself.

It adds to the whole career experience when you can watch your kids’

cartoons and it has meaning for your profession."

In 1991 Klein rescued Applause from the brink of Chapter 11,

overhauled

the corporate culture, and turned it into a toy and gift company with

annual sales of $150 million. Along the way, he helped the company

cope with a major earthquake. "When you come to work one day and

your headquarters is destroyed by an earthquake what do you do?"

he says. "You learn about business in business school but how

do you help people get their lives back together? It was a real

bonding

experience."

In his last job, at Universal Studios, Klein created the product group

that was responsible for tying movie characters in with everything

from Burger King meals to Kodak cameras. "When Seagram’s purchased

Universal Studio they felt that they had great assets, with great

libraries of films, but they had never accomplished what Disney had

accomplished in terms of having brand value," says Klein.

"They

brought me in to be the head of global consumer products, which

included

retailing." Klein opened the first Universal Studio stores —

one in Orlando and one in Los Angeles — and delivered one of the

top three entertainment licensing programs supporting Spielberg’s

Lost World and Jurassic Park release. The retail campaign included

toys, fashion shows in Bloomingdales, and the largest promotional

tie-in in Burger King’s history. "We generated $250 million in

free advertising," Klein says.

As headhunters began recruiting key Hollywood players for some of

the big Internet companies, Klein was turning down offers daily. Then

one day Klein got a call from Spencer Stuart, the world-wide executive

search firm, with the Justballs offer. "When they call, you answer

those calls, because they represent only blue chip opportunities,"

he says.

That wasn’t the only reason Klein decided to join the New Jersey

company

however. "I’ve thought long and hard about the Internet because

I believe that’s the new economy," he says. "The real issue

for me is that there are a million and one Internet start-ups out

there and knocking on my door, and I spent a lot of time kicking their

tires, and the one that struck me in its simplicity the most was

JustBalls."

After months of commuting, Klein has moved into a house in Princeton

near Springdale Golf Club, a classic brick Georgian formerly owned by

J. Seward Johnson Jr., found for him by Pete Calloway. He and his

wife, Beverly, have two school-age children.

As for grand marketing strategies, Klein doesn’t think the company

needs much. "Our philosophy is the best expenditures you can make

on the start-up is customer service, not advertising," he says.

"You’ll see our banners court-side at games, so it’s an

opportunity to touch so many people much more than traditional top

down TV advertising."

Then there’s the name itself — Justballs. "I like the name

because it’s straight to the point," he says. "We have a

built-in

asset right there in the brand name. When I fly to L.A., people try

to steal my hat."

08528. 609-497-2400; fax, 609-497-0113. Home page:

www.justballs.com.

— Melinda Sherwood

Top Of Page
Paytrust: Expanding Nationwide

Edward G. McLaughlin, CEO of Secure Commerce Services,

is selling time for leisure. His company scans your bills and puts

them online at www.paytrust.com. You can see your bills on your

private

web page and pay them with a click of a mouse (U.S. 1, August 25,

1999).

Paytrust had its pilot program up and running in January, 1999, and

did a public launch in June, 1999. Last August, when Paytrust.com

was featured at the U.S. 1 Technology Forum, Paytrust had 20 employees

at Emmons Drive. Now it has a total of 260 people nationwide. Then

Paytrust occupied 6,000 square feet. Now it has leased a total of

113,000 square feet. Last October Paytrust was reported to have 14,000

consumer clients. Now it has more than 30,000.

"Bill delivery and payment is one of the fastest growing

industries

on the Web, and we continue to expand our infrastructure to deliver

world-class customer support, and to capitalize on this

opportunity,"

says McLaughlin.

Paytrust lets consumers receive, review, pay, and organize 100 percent

of their bills online. "Our expansion is a direct result of

consumer

demand for our service, and we are scaling to meet demand," says

Lina Page, vice president of corporate communications. "Paytrust

has been successful at driving over 30,000 active customers through

a variety of integrated, direct marketing initiatives."

It has also partnered with, and delivered co-branded bill centers

for, such companies as American Express, GEFN, Nextcard, and

Ameritrade’s

OnMoney. "We are seeing significant customers coming in through

those channels," says Page.

Paytrust has its roots in LogicWorks, where McLaughlin met Flint

Lane, the other co-founder, when both were executive vice presidents

at that firm on Campus Drive. (LogicWorks was since sold to Computer

Associates and has moved). Paytrust has also made significant

associations

with other Princeton-area firms. Last month it made an alliance with

College Road-based Princeton eCom to expand E-billing and E-payment

capabilities. It also tapped Nettech Systems to hire another

LogicWorks

alumnus, Kenneth W. Zeng, as chief financial officer.

David S. Fortney (formerly of Integrion Financial Network and

NationsBank)

was made chief technology officer, and Jack Paladino, formerly a

business

manager from Citigroup’s e-City unit, was appointed chief operating

officer in April.

The current facilities include a 23,000 square-foot headquarters and

operations center at Quakerbridge Executive Center, a 50,000 foot

operations center on Brunswick Pike — both brokered by Commercial

Property Network — and a 518,000 square foot operations center

in Sioux Falls, South Dakota. Headquarters staffing consists of

personnel

for development, marketing, finance, human resources, and

administration,

whereas the operations centers are staffed with customer service

representatives

and mail processing workers.

The company promises to create at least 500 jobs in

Sioux Falls. There are also field sales and business development

personnel

at three locations: Herndon, Virginia; Redding, Connecticut; and

Burlingame,

California.

Jim Bruene, editor of the Online Banking Report

(www.onlinebankingreport.com)

gave Paytrust a Best of the Web designation for being the first

financial

services company to provide Web-based statement aggregation, ahead

of competitors such as Cyberbills and PayMyBills. Paytrust’s Smart

Balance service retrieves statement information from bank and

brokerage

accounts and displays it on the Paytrust site.

The revenue from electronic bill payment will supposedly reach $2.3

billion in 2001, says an analyst for J.P. Morgan, and by 2002

virtually

all banks will offer this service. Processing costs for bill payment,

according to federal statistics, will drop more than $20 billion a

year when most consumers pay online.

Quakerbridge Executive Center, Lawrenceville 08648. Ed McLaughlin,

president and CEO. 609-720-1818; fax, 609-720-1819. Home page:

www.paytrust.com.

Corrections or additions?

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.