Cleveland (5895)

Monday, 22 July 2002 09:39

When stubbornness leads to success

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Peter Miragliotta has a stubborn streak. Against the recommendations of friends and professional advisors, the owner of Tenable Protective Services refused to declare bankruptcy even after learning that his partner was diverting cash away from the business and that the company was enormous debt, including about $300,000 owed to the IRS.

“We hit a turning point approximately six years ago,” Miragliotta says. “Everything’s been up since then. I had a partner that I had trusted the financial excellence and the administrative responsibilities to. Operationally, we were sound. But he was diverting the cash into another entity and he was using that cash himself. When were finally able to leverage him out, we were approximately $1 million in debt.”

Bankruptcy seemed the most appropriate option. “A lot of people said you need to declare bankruptcy,” he recalls. “But that meant I couldn’t have used the name Tenable, which my clients recognized. I felt I was kind of screwed either way. I knew I had to work hard to come out of it or be destined to be a nobody. I reorganized my staff, thought about what we did, what the problem was. We started to rock and roll. We put a business plan together, a financial plan. We called all of our clients. I went out personally and put all my cards on the table to all my clients at the time and told them exactly what I was up against and said if they stuck with me that I would continue to provide the service and continue to upgrade it.”

And then Miragliotta analyzed his personal situation closely. “We sat down and we all said, ‘well, how much can we live on.’ And that’s when we started to pay ourselves just what we needed to live on. We put in as many billable hours as we could,” he says.

The tactic worked. Only one customer left — to move with his former partner who opened a competing business. Within three years, Tenable was out of debt.

Since then, Miragliotta has been able to rebuild the business and has even opened Tenable Entertainment and Event Management, a sister operation that provides ancillary services for events all around Northeast Ohio. The company now has a staff or 30 and Miragliotta expects gross sales to exceed $10 million this year.

His efforts have been recognized outside the industry. Miragliotta was named a finalist in the Ernst & Young Entrepreneur Of The Year program. “I’m pretty excited,” he says. “It’s great for me. If I had followed all the traditional books that I read on business practices I’d be out of business. I had no other choice but to continue to roll the dice, and sometimes I still do. We’re in a much loftier position than we’ve ever been in.”

Miragliotta credits his employees for the company’s success. “They truly are the ones that deserve it,” he says of the recognition. “They’re the ones out on the front lines anymore doing this stuff. I’m tickled because it’s my industry. How many times have you every heard of a security agency being considered for this type of a nomination? It goes to the perfumed generals out there. Where are you going to find another company where my bottom line worker is scrimping and saving to take care of his family? It validates them. They can say ‘I work for Tenable.’”

And keeping that name was important to Miragliotta. “The name was picked because while I was in the Marine Corps I was in a reconnaissance unit. I had been kind of military history buff, especially about Viet Nam. When President Kennedy first sent his advisors over to Viet Nam, he sent over as the special forces A team. A lot of them worked in 10-man teams and when they would sign off the radio the would sign off as ‘ten-able.’ And that was a derivative of tenable. Tenable is Latin word that means a force to protect and defend. Everybody had recognized that name.”

As a 19-year-old marine, Miragliotta dreamed one day of owning his own company, one with a name that would command respect. “I just didn’t want to abandon those principles.”

How to reach: Tenable Protective Services, (216) 361-0002.

Daniel G. Jacobs (djacobs@sbnnet.com) is senior editor of SBN.

Monday, 22 July 2002 09:39

Ups and downs

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(Ups) to Progressive Corp. The insurance giant's Web initiative is a perfect example of how to complement traditional brick and mortar operations with an e-based process. With a proven product and solid foundation to build upon, it didn't take long for Peter Lewis and Co. to make the masses forget about the company's failed E.T. advertising campaign.

(Downs) to Cleveland's biotech community. Gliatech's announced departure -- after the homegrown gel maker's sale to Baltimore-based Guilford Pharmaceuticals -- puts the brakes on what appeared to be successful efforts to keep Gliatech in town. Too bad there's no salve available to heal this wound.

(Ups) to SBN magazine. Seven Excellence in Journalism awards between our Cleveland and Columbus editions show SBN's peers acknowledge that we give our readers what they want -- and need -- every month.

(Downs) to Pony Computers' Planet Know How. The "how to" dot-com start-up burned through a large chunk of its seed capital without much to show for it besides a wake of unpaid contributors and a mediocre beta site. Ironically, one of PKH's first how tos explained how to start a successful e-business. It makes you wonder: Did the company's management team bother to read its own articles?

(Downs) to displaced tenants at Shaker Square. Sure, SBN understands -- and encourages -- real estate makeovers to spur economic growth, but Randy Ruttenberg and Adam Fishman's plans to return the square to its former glory aren't exactly making friends with merchants along the way. Should their initial attempts fail, the duo may find rough times filling space with locally based businesses.

Monday, 22 July 2002 09:39

The judges

Written by

Daniel Austin

Vice chairman

McDonald Investments Inc.

Carol Latham

President and CEO

Thermagon Inc. (former winner)

Thomas McKee

Partner

Calfee, Halter & Griswold LLC

Larry Roth

Cleveland chapter president

Young President’s Organization

Loyal Wilson

Managing director

Primus Venture Partners

Monday, 22 July 2002 09:39

Strange new world

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In today’s fast-paced, e-world it may be surprising to learn that nearly half of the people living on this planet have never made or received a telephone call.

What is even more mind-boggling is that just a few short years ago, that number was somewhere around two-thirds of the globe.

Somewhere in between, cellular telephone technology developed to a point where people who live in parts of countries where there are no hardwire telephone lines were able to make their first phone call. In parts of India, for example, there are entire villages which have a single phone number and share a community phone that is delivered from home to home with charges billed by the minute.

In May, when America Online Chief Technology Officer William J. Raduchel visited Cleveland, he used that story to illustrate the huge technology gulf that exists today between nations and cultures, and the speed at which new technology moves once it drops to an accessible price.

The Web, he points out, is no different. By the end of this decade, Raduchel says our initial fascination with the Internet will have long faded, but the technology will be deeply entrenched in every area of our personal and professional lives.

In fact, it may not be too long until the Internet starts reaching those people who made their first telephone calls during the 1990s. If you’re still among the doubtful about what the Web revolution really means, consider Raduchel’s take on the ways he believes the Internet will change your life and business by the end of the decade.

The price of technology will plummet.

The price of computers is dropping an average of 30 percent a year, while server and storage costs are falling about 40 percent annually. Raduchel says the next decade won’t be so much about new technology as it will be about the revolutionary decline in how much it will cost to bring it to the masses.

By the year 2010, Raduchel says the cutting edge personal computer sitting on your desk today will be reduced to a $15 chip that can fit in a television remote control. Seem like an outlandish prospect? Raduchel says that’s because such a steep decline in the cost of implementing new technology has no comparison throughout history. Further, people are not accustomed to such large changes.

“You’re looking at pricing that many of you as business people have never experienced,” he explains. “Just think what the effect would be if, by the year 2010, gasoline was five cents a gallon. Changes of more than 30 percent a year are beyond our experience.”

Every business will be an e-business

When e-commerce made its initial public splash in 1998, much of the national media warned that using the Internet to improve business may work well for some companies, but others would remain relatively unaffected. Today, those statements are highly questionable. In 10 years, Raduchel says, they will be totally absurd. He points out that even business owners in traditional industries like construction are already reaping rewards from using the Web to increase efficiency and grow profit margins.

“It’s doubling or even tripling gross margins,” he says. “I cannot think that there is any business totally or even partially immune to what is going on.”

Common products will be Web-enabled

Everything from your refrigerator to your dishwasher to your microwave to your air conditioning system will be tied into the Web. The most compelling benefit of such a move is the fact that your appliance repairman will likely end up calling you for a service visit since technology is available today that will allow a dishwasher, for example, to predict a breakdown up to 30 days before it happens.

There are already signs of this move toward Web-enabled products. Raduchel says every major automobile manufacturer is currently dumping millions of dollars into research about how best to make money from their ultimate plan to embed an Internet browser in every vehicle that rolls off the assembly line.

“All of the major automobile manufacturers are looking at cars as browsers on wheels,” he says. “By the end of the decade, you are likely to see automobile manufacturers making more money from selling you information in your car than selling you the car itself.”

Most homes will be connected 24 hours a day

In the next 10 years, the dial-up method of reaching the Internet will be all but extinct, says Raduchel. Instead, millions of homes will have a 24-hour a day Internet connection that will allow all your Web-enabled products to communicate with the outside world. Although AOL’s purchase of Time Warner may indicate Raduchel believes this future will involve plenty of cable modems, he seems to think Internet access from home will be created by several different mediums, whether it be DSL, cable or satellite.

“By the end of the decade, the vast majority of houses in the U.S. will have a permanent Internet gateway in their home,” says Raduchel. “You will have a small box somewhere in your house that will be permanently connected.”

The Internet will become invisible

Raduchel estimates by the end of the decade there will be as much media coverage and debate about the Internet as there is today about telephone systems and automobile brakes. The biggest indicator of an Internet-powered world will be the fact that you don’t think of it much at all, although you will use it daily in both your business and professional life. “If 10 years from now you realize the Internet is there, that indicates we have failed,” says Raduchel. “It has to be part and parcel to your life.”

How to reach: America Online, www.aol.com.

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:39

Share the scoop

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Starting in first grade at recess and continuing at the workplace water cooler, we have always yearned to know the inside story.

Maslow should have included “getting the scoop” in his hierarchy of human needs. Addressing this need when marketing to a prospect works just as well.

If you sell a product or service to another business, you know it is critical to establish and maintain a meaningful dialogue with prospects. Examples are everywhere and can be seen at most good Web sites, as well as in more traditional media.

An example from the Internet is as follows. Once a prospect or other interested party has been successfully urged to visit a Web site, that person is often asked to register an e-mail address to receive ongoing information of value. The new e-term for this is “permission marketing.” A good business-to-business example of this can be found at www.connectspace.com. To receive business leads, a visitor must divulge his or her identity and register so that a connection can be made between a potential buyer and a seller.

Long before there was an Internet, this was known as exchanging information of value. One example is the telemarketer who calls to offer a free informational seminar or white paper in return for an executive’s commitment of time and interest.

Regardless of the buzzword or what medium is used to disseminate information of value, the process is the same. Establish a dialogue with your audience, offer value, deliver what you promised, and hopefully, you will build better relationships. The right medium will help you break through the clutter caused by information overload.

My e-mail newsletter, “Re-Focus to Grow,” is an example. Starting in the spring of 1999, I felt a need to keep in touch with my network of more than 1,000 business friends in and around Cleveland. While advertising or spamming them would be unacceptable, sharing my stories and observations was appropriate, so I began to assemble stories, articles and news about my business.

Next, I needed to implement the newsletter on a shoestring budget. Here is how I did it.

  • A review of my Rolodex revealed that 50 percent of the business cards included an e-mail address. Calls by my assistant yielded e-mail addresses from another 35 percent. Only one individual declined to provide an e-mail address. This was flattering and confirmed the value of first establishing personal relationships, then maintaining them with technology.

  • Next, I had to produce the newsletter. Writing it started out taking two days, but both the time it took and quality of the end product have improved. I am currently re-engineering the format for the third time to keep it short, punchy and to the point.

  • The effort of sending this newsletter is divided among maintaining e-mail addresses, writing/editing issues and producing the mailing using Microsoft Word and Outlook. I have also sent it out as a live Web page. If a reader keeps a live connection to the Internet, he or she can click on an icon. Thanks to Joe Palko (JPalko@fancemail.com, www.fcsmail.com) for introducing me to this application.

Feedback has been positive and the value to my business has been high (including leads for consulting, speaking, writing, training and testifying). Most important, I have been able to keep in touch and hear from my business network, which is vital to a one-person consulting business.

Perhaps making an offer to exchange information of value would help your firm find, keep and grow more customers as well.

Andy Birol is president of PACER Associates, which provides expert advice to owners who need to grow their businesses offline and online. Birol can be reached at (440) 349-1970 or at www.pacerassociates.com.

Monday, 22 July 2002 09:39

The time is now

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Given its large number of electoral votes, Ohio has always been an important state in presidential politics.

As the 2000 campaign comes to the forefront, it seems to be developing into an important swing state in determining who will be our next president. In keeping with its mandate to promote the open discussion of issues affecting businesses, Ohioans for Better Business (with SBN affiliation) would like to host a two-part forum in September that will provide the Republican and Democratic nominees for president separate opportunities to discuss issues of concern to business owners and to explain their plans for creating a strong pro-jobs environment in Ohio and the nation.

We spearheaded the creation of Ohioans for Better Business because of our experiences during the past 10 years as the largest chain of business-to-business publications in Ohio. In our business dealings throughout the state, an increasing number of business leaders voiced their interest in creating a forum to discuss taxes, health care, the environment, labor relations, campaign finance reform and other issues of importance.

I have aired many of these issues in my column, which reaches more than 300,000 readers -- most of whom are presidents and owners of companies ranging in size from 20 to 500 employees. Few topics bring as much feedback as those that have a political focus to them, because politics can affect whether a business is successful or not.

A simple change in an environmental law can have a huge impact on business. An administrative ruling can mean the difference between a business surviving or failing. Too many times laws are enacted or changed without proper input from business owners and leaders. It's time our representatives in Congress and the White House hear our side of the story.

In short, business owners care about what happens in Washington, which is why we created Ohioans for Better Business. We believe the work of the federal government clearly dictates the future of Ohio's business climate, for better or worse. Ohioans for Better Business is dedicated to promoting the open discussion of issues impacting our business communities.

While more than just a business advocacy group, we will be supporting the advancement of federal, state and local legislation that will support successful Ohio businesses and make the climate here business-friendly.

Each of our two proposed forums will be by invitation only and include business owners and members of top management from companies throughout the state. This will be a great opportunity to talk to other owners who have similar concerns and to hear first-hand what our representatives are doing to improve the business climate. If you are interested in attending these events, please contact us.

We also want to encourage any feedback on issues you might have. It is very important that we hear from you about the issues that affect your day-to-day operations.

What can political leaders do to make your business more successful, generate more jobs and make the community a better place to live? Now is the time for your voice to be heard. We need your support. Many people don't bother to get involved because they don't feel they can make a difference. However, our goal is to create a unified voice for business owners and leaders and bring attention to the issues that affect them. Synergy is where the sum of the parts is greater than the whole. Without you, we are missing a very important part. Fred Koury (fkoury@sbnnet.com) is president and CEO of SBN.

Monday, 22 July 2002 09:39

No end

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When the technology-heavy NASDAQ took a nosedive earlier this year, everyone thought, “This is it.” The day of reckoning for the high-flying Internet stocks had finally arrived.

Companies lost millions in valuation in just a few days, and some investors saw their double-digit gains vanish. But what was originally seen as a free fall ended up being analogous to an airplane ride: It wasn’t really falling, it was just that sense of weightlessness as the plane goes from a steep climb to a gentler ascent.

The flow of money has slowed, but not stopped. The torrid pace had to decrease some time.

Venture Economics reported that even before the decline in the NASDAQ, the growth in venture financing had slowed. While the total amount of venture financing was at an all-time high at more than $22.5 billion, it was less than an 8 percent increase from the fourth quarter of 1999. For comparison, the gains in the previous quarters were 61 percent, 23 percent and 72 percent.

The Industry Standard reported that the direction of the money has also changed. Money invested in e-commerce dropped 46 percent to $744 million from about $1.4 billion in the fourth quarter of 1999. The amount invested in infrastructure increased 83 percent over the same period, to $1.7 billion from $952 million.

As the money slows, investors will be more selective. An innovative idea alone simply won’t be enough to garner millions in venture capital. While the market may be cooling, spelling an end to the 146 percent one-year return for venture capitalists in 1999, investors are still expecting more historic levels of return — 20 percent.

And there is still plenty of money to be had. An estimated $15 billion remains to be invested from what was raised last year.

“As long as there is cash in the market, the venture capital won’t dry up,” says Jaime Punishill, senior analyst with Forrester Research. “The nation is flush with wealth. Businesses will be able to get funding. There is a massive supply directly related to this mass of wealth.”

As the Internet business concept matures, venture capitalists have a much better idea of what is a viable business plan and what isn’t.

And if every Internet-based business went bankrupt tomorrow, the average person might not see any other effects. Most of them have no operating margin and are posting huge losses. Banks wouldn’t touch them.

“They are all using venture capital money or private capital,” says Punishill. “Most of these guys can’t even qualify for a line of credit. Wall Street may have gotten tepid to dot-coms; venture capitalists have not.” Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:39

Mind your manners

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It’s always a tough decision. Do you try to spear that cherry tomato on your salad plate and risk shooting it across the table?

If there’s a business deal at stake, you’re probably better off leaving it alone or learning how to safely corral the little red menace.

It sounds trivial, but the fact of the matter is etiquette faux pas can ruin weeks of negotiations. Your dining etiquette is a direct reflection of you and your organization.

“Etiquette is extremely important, especially if it’s with international clients,” says Sue Fox, president of Etiquette Survival Inc. and author of “Etiquette for Dummies.” “There is tons of business being done over meals. It is a product of our overworked society. What you need to do if the meeting is important is to follow the Boy Scout motto and be prepared.”

  • Find out if your clients or customers have any special food needs. Are they vegetarian? Find out where they are staying and choose a restaurant near their hotel.

  • Try to frequent a restaurant where you are known so you’ll get better service.

  • Call ahead and make arrangements for a quiet table. If you are the host, give the manager your credit card number in advance, and, if possible, sign for the meal. This makes the whole event run smoother and eliminates any possible bickering over the bill.

  • Don’t talk business until after you are done eating the main entree. The only exception is if your guest brings it up first.

  • Don’t order food that is difficult to eat, such as spaghetti.

  • Be prepared with small talk about current events or other topics.

  • Turn off your technology, including cell phones and beepers.

  • Don’t put anything on the table, including sunglasses and keys. The only thing that should be on the table are the plates and the meal. Once the business discussion starts, it’s acceptable to bring out papers and other related materials.

  • Learn more about proper etiquette. Sticking a napkin in your shirt and talking with your mouth full might be accepted at your mother-in-law’s, but it’s not going to help you win any business deals.

  • Greet your guess at the door, which means arriving early. Walk in ahead of them, lead them to the table and indicate where everyone should sit. You may want certain people in specific spots, but always give the best seat to the most important client.

And here are Fox’s five worst mistakes that can be committed during a business meal:

1. Drinking too much alcohol.

2. Having a long cell phone conversation at the table.

3. Showing up late.

4. Spilling something on your client.

5. Dominating the conversation.

How to reach: Sue Fox, www.etiquettesurvival.com. Fox’s etiquette advice columns are also available at www.officeclick.com.

Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.

Monday, 22 July 2002 09:39

Industry innovator

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The past year has been a wild ride for Joseph Keithley.

His company, Solon-based Keithley Instruments, finally began reaping the rewards of sweeping internal changes made within the organization over the past several years. The results have been impressive, with strong revenue figures, a skyrocketing stock price and an impressive resume that includes the likes of Motorola and Nokia.

Keithley took over as CEO of the 54-year-old company in 1993, after his father, Joseph F. Keithley, stepped down. Over the next several years, the younger Keithley reorganized and rejuvenated the high-tech measuring device manufacturer, concentrating on high growth markets like telecommunications and the semiconductor industry and selling off unprofitable parts of the business. The results speak for themselves.

Keithley Instruments has consistently reached more than $100 million in revenue the past several years. Meanwhile, sales are up 50 percent over what they were 12 months ago, a fact Keithley attributes to the company’s ability to keep up with the incredible growth rate of the technology industry.

“The industries we focus on are the ones that are growing fast and companies that are growing fast in those industries,” he says. “And, I don’t see other companies organizing themselves to do that and then modifying their new product process, their new manufacturing process to enable that to occur.”

Add to that recognition by Ernst & Young LLP as Entrepreneur Of The Year in the Technology category, and Keithley’s success has not been overshadowed by much.

Although Keithley Instruments may be thought of primarily as a manufacturing firm, its research and development arm is what, in Keithley’s eyes, has been the driver of his company’s success.

“We’ve taken a fundamental measuring capability, and instead of doing a product push, we’ve been really creative at the market,” he explains.

That means being able to react quickly to customer demand, especially in a world in which cellular phones and laptop computers shrink in size with every passing day, requiring new, more precise measuring devices to test them. Being able to deliver quickly on those customer needs is what Keithley sees as his firm’s edge.

“They are rich with new product ideas for us, and every new product idea we get back from them, we feed back to them through the product,” he explains. “It is rewarding because we are solving problems, and these are guys who are going nuts because of the demand for their product. I think that’s just generated enthusiasm, energy and a lot of more goodwill in working with the customers.”

For Keithley, that has meant implementing a fast-track product development program not only to meet customer demand, but also to beat the competition to the punch. In the past five years, Keithley Instruments has introduced several new products designed specifically for certain target audiences. It has required a substantial investment in new technical staff and equipment, but Keithley says being an industry innovator is one of the most satisfying parts of his job.

“I really enjoy working with the young people and sorting out the customer problems and profiling the opportunities,” he says. “I really enjoy making the customer visits and seeing how our products are used and how application support is used. So, those are two aspects of what gives me great pleasure.”

Keithley’s work over the past several years has not been lost on Wall Street. During the past year, shares of Keithley Instruments reached a 52-week high in mid-March of $74 a share, a stellar rise from its 52-week low of less than $7 a share. As far as the company’s recent rise to being regarded as one of Northeast Ohio’s most high-profile companies, Keithley admits it is the first time since he took the helm of the company that he’s felt comfortable being recognized as one of the region’s leading entrepreneurs.

“The work that we’ve been doing the last several years is finally at a point where someone else would take notice,” he says. “Before that, I wouldn’t have had the temerity to stand up and say, ‘Hey, look at me.’” How to reach: Keithley Instruments, (440) 248-0400

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN Cleveland.

Monday, 22 July 2002 09:39

From aggravation to aggregation

Written by
Floyd Ostrowski was looking for a viable e-commerce strategy for his company.

The proliferation of dot-com solution providers always seemed to leave someone unhappy. Either the company was forced to give away too much and watch its profits dwindle or it was the buyers who were squeezed, leaving them uninterested in the approach.

That’s when the vice president of Weatherchem Corp. found eWinWin.

“There truly is a ‘win-win’ here for both sides of sales transactions,” said Ostrowski. “We reviewed a number of e-commerce competitors and chose eWinWin because its ‘demand aggregation’ approach offers real benefits to both buyers and suppliers in an online environment.”

As its name suggests, eWinWin founder and owner Greg Mesaros wanted to develop an e-commerce solution that offered benefits to buyers and sellers. He calls it the Demand Aggregation System.

“For this particular dot-com, we provide turnkey business to business e-commerce solutions for suppliers,” he says. “We’re taking the old business models and totally putting them on their side.”

To understand how the system works, you must understand the word “aggregation.” It’s a word that permeates the literature of eWinWin and the speech of its owners. Aggregation, as they employ the term, is to bring together a company’s clients and use their collective buying power.

A manufacturer like Weatherchem, which produces several types of packaging products, contacts eWinWin and creates an online deal room. In the deal room, Weatherchem offers a product at a certain price for a certain quantity with a predetermined ship date. Weatherchem can then contact any or all of its customers for that product and invite them into the deal room. As the quantity of orders increases, the price decreases.

Companies like Weatherchem use molds to produce products. It can take as long as 12 hours to switch from one to another, and that dead time is potential lost revenue. Predetermining ship dates allows the company to be more economical.

The approach offers other savings as well, including better scheduling, improved operating efficiency, better management of working capital, lower transaction costs, access to hard-to-reach customers and a live database of buyers.

“A lot of suppliers look at e-commerce and they get scared,” says Gerardo Orlando, executive vice president of business affairs for eWinWin. “Really, this is something that’s very pro-supplier. The supplier can become more efficient, and they can use this as a tool to become a better manufacturer.”

The buyer wins, because as more people buy, the price decreases. A buyer might even be willing to purchase more of a product in advance, knowing it comes at a lower price.

“There really is an incentive for all the buyers to come back to the site to see if the price is going down to see if they can get even more of the product,” Orlando says. “So what this system does is it really goes to the cost of the goods themselves. And that is all tied to the efficiencies that the suppliers get through the system, through being able to plan their production better.”

Currently, eWinWin offers four variations on the theme. In addition to those of suppliers, there are deal rooms sponsored by associations and buyers and cooperative deal rooms. Each company works with an eWinWin action manager who helps the company facilitate the process.

The company also hopes to create deal rooms up and down the supply chain. In that way, a company like Weatherchem could purchase its materials at a lower price and its clients can then sell their wares in their own deal room. And at each step in the process, eWinWin takes a cut.

eWinWin makes money three ways: through a fee for setting up the deal room, a monthly hosting fee and a transaction fee based on the amount of merchandise sold.

This is the perfect e-commerce model for Cleveland because it serves manufacturing operations.

We love being the underdog,” Mesaros says. “People are not looking at Cleveland right now for e-commerce solutions. And we’re sitting back going, there’s no better place to be than Cleveland, because that’s where our customers are.”

If the solution works, Mesaros and Orlando think they might be able to meld their approach with other industries, including energy, natural gas and even bandwidth. But for now, their attention is on manufacturers and building their own operation.

“There’s nothing that really prepares you for an Internet start-up,” Mesaros says. “As cliché as that may sound — to show you how old I am — when I went to graduate school they actually taught you how to make money. Turn a profit. That’s not what a dot-com is — scaling your model, creating satisfied customers and managing your cash flow, and then getting to the next level. This is a different form of the economy.”

At eWinWin, however, the plan is to turn a profit.

“We’re going to be first and our goal is to always be better than everyone else,” Orlando says. “By being first, you have a head start both on technology and experience, and as we do this with more and more customers, we’ll learn more and more and continuously improve our product.”

How to reach: eWinWin, (216) 348-9700

Daniel G. Jacobs (djacobs@sbnnet.com) is senior editor of SBN.