Many companies are doing just that by fostering relationships with research universities, in order to be the first informed when new inventions, technologies and innovations are discovered.
Kent State University is one local institution that is actively pursuing companies that will use the technology developed within its walls in a commercial capacity.
In the last three years, 10 start-up companies have grown out of research developed at KSU. They range in focus from liquid crystals for optical communications to medical diagnostics to information technology. Those relationships were largely facilitated by the university's Office of Technology Transfer and Outreach Coordination, headed by Greg Wilson.
Wilson has been the director of that office since 1996, after spending 15 years in the corporate world, largely working in new product development for Abbott Laboratories. SBN Magazine spoke to him about research available to companies and the function of the school's technology transfer program.
What is the primary mission of the Office of Technology Transfer and Outreach Coordination?
The Office of Technology Transfer and Outreach Coordination has two functions. The technology transfer piece relates primarily to technology-based partnerships that may come from technologies that we develop here on campus, inventions that are made in our various research labs and forming technology-based partnerships for the university that embrace all eight campuses.
The technologies that are most common are either in the biomedical area or liquid crystals and polymers or software areas. Those are the three arenas where we do most of our activity.
The outreach is a little more general in terms of helping to establish these collaborations and partnerships with businesses or economic development groups primarily around Northeast Ohio. Those partnerships run the gamut from actual technology licenses, where some of the technologies invented here at the university are licensed to businesses that want to make new products. We have a number of those kind of licensing arrangements with companies.
Secondly, our office has been active in helping university-related start-up companies. We've had a number of companies that have either involved university faculty as proprietors or small start-ups that have been licensees of university technologies.
We've tried to facilitate the success of those companies by helping them get resources, whether it's finding the right location or connecting them to angel investors to get money or financing.
On a broader basis, we have individual company collaborations. There's one in the liquid crystal and polymer area involving Kent State, the University of Akron and Case Western Reserve University called Advanced Liquid Crystalline Optical Materials (Alcom), a three-way academic partnership that facilitates research for liquid crystal and polymer projects. We have a number of collaborating companies that work with these three universities via the Alcom structure.
Kent State University's sponsored research base, which drives inventions, is now about $28 million.
Can you give an example of how your office has been the catalyst for a new business?
One of these university-related start-up companies is Viztech, a licensee of some Kent State technology in the area of polymer films. Their goal is to make flexible plastic displays. We've licensed them some technology invented here at Kent State and we're helping them get situated in their headquarters in Streetsboro.
We're helping them get connected with some resources and financing -- they're working on their second round of venture capital. They'll be hiring more employees, and for a high-tech company, the average wage is quite high. That's an example where we've given some technology to a small company and helped them get established in the area.
It will hopefully be a significant financial benefit to everybody.
How can companies find out what technology is available?
Currently we market primarily on the Web, and we seek partners in whatever technology area we have. Liquid crystals and polymers have been our biggest area of licensing to date. Since our Liquid Crystal Institute at Kent State is the largest academic research center in the world focused on liquid crystals, it's quite well known.
We have about 40 company partners from this area and around the country that work with us regularly and are part of a partnership program, like Crystaloid (Electronics Co.) in Hudson and Kent Displays Inc. We bring them here for training, and they're always checking with us on what kinds of new technologies we have.
What's in it for the university to share these licenses?
Everybody benefits in several ways, but the company obviously gains access to university technology, which they wouldn't have had otherwise, and the university gets money back. (KSU's licensing income last year was nearly $400,000.) The university's main mission, in terms of technology transfer, is to make these technologies available for the public good.
Generally, most technology transfer offices do a little better than break even. But if you have a big winner, like a Gatorade (which came out of) the University of Florida, it can bring in millions. So if you have a big winner, it can be extremely lucrative.
Is there competition among companies to gain access to a certain technology or patent?
We try to satisfy all comers. There are various kinds of licensing arrangements. Some of these technologies, if they look like they have broad applicability, can be licensed nonexclusively to companies, meaning they can be licensed to more than one company for the same application.
Some of our earlier liquid crystal display technologies needed a lot more development or a lot of investment, and companies are reluctant to do that unless they can have a piece of it exclusively themselves. Both approaches have been taken. Part of it is kind of a timing issue because these technologies are almost always early, because they're coming out of a university, and sometimes it's hard to get companies interested because it is so early.
And then you'll get one taker, they'll start to run with it, and word will get out that so-and-so company has this, and then you'll find people coming in later saying, 'Hey, I want that, too.' Then you just have to deal with it at that time.
Have you ever had to turn away a company?
We have tried not to say no. You try to keep everybody as satisfied as possible.
And of course we have many scientists here inventing new things all the time, and there are always new things to bring to the marketplace, too.
How do you stay on top of all the research that is being conducted within the university?
It's tough, because at a large university, it's quite diverse. I spend a lot of time on campus, circulating with faculty, going to technical meetings around campus and staying in the network of what kinds of technologies are being developed.
We also do educational seminars around the university on what technology transfer is and what the patenting process involves and what you get if your technology is patented and licensed, because there is money that goes back to these inventors, as well as the inventors' department and other areas of the university when a license is successful.
There are also policies in place at Kent State that say if you invent something, you need to disclose it to the technology transfer office. How to reach: Kent State University Office of Technology Transfer and Outreach Coordination, (330) 672-2692
Most were breaking away from one of the busiest times of their careers as reporters and editors to come to this event. We left our jobs to participate in an annual conference on journalism, organized and hosted by the Society of Professional Journalists, a national organization that serves to protect the free press in our country.
In the days following the Sept. 11 attacks, there was much discussion among the groups' membership and board of directors about canceling this year's conference. A last-minute executive decision was made to hold the conference, unless a large proportion of the speakers cancelled.
That didn't happen. In fact, the turnout this year was as high or higher than it had ever been.
I'm sure I wasn't alone in my fear of stepping on a plane to travel to the West Coast so soon after the terrorist attacks, but, like hundreds of other journalists, I decided it was probably one of the most important times I could choose to renew my commitment to and understanding of journalism.
Not surprisingly, the program had been changed so that many of the professional development sessions were now focused on practical and ethical issues surrounding the coverage of the events emerging from the Sept. 11 attacks. Journalists spent most of their time sharing stories in formal and informal meetings of how they responded through their jobs to the events of the last few weeks.
The editor of the Washington Post's Sunday magazine told me how difficult it was to cover the Pentagon attack in a fresh manner after his daily newspaper had been reporting on it every day for the last several weeks. As the editor of a weekly magazine, he plans his articles at least two weeks in advance.
His solution was to send reporters out to "shadow" a handful of Washington, D.C., residents and workers who had been affected by the crisis to see how they were getting back to their "normal" lives.
At the conference, I sat and listened to the sensational stories that were being told, especially by the New York and Washington-area reporters who had to quickly set aside whatever they were doing to cover the events that changed the world. As the editor of a monthly business magazine that focuses on issues, not necessarily news, I didn't feel I could share in those experiences. My job, I thought, hasn't really changed.
I came home to wrap up our November issue and start planning for December, only to realize that my job has definitely changed, in some ways temporarily and in others probably permanently.
We may not report on the news that happened yesterday, but we do have an obligation to our readers to write about the issues that are affecting their workplaces today.
Stories about security issues and coping with severe revenue drops have replaced articles on finding great employees and travel tips. We're seeing more compassion and humanity in local workplaces during these tough times.
Layoffs are occurring, but many employers are trying to cut costs other ways. Retailers in every industry are offering huge incentives to lure back customers.
These are just a handful of the issues we'll be writing about this month and in the months to come. There are many more we are aware of and plan to cover, and some we may not know about yet.
I was reminded last month that my primary role as an editor is not to shape the news but to act as a conduit. You can help me with that responsibility by letting me know what issues you are now dealing with in your workplace.
SBN would like to share those stories with other business leaders to help everyone cope.
Connie Swenson is editor of SBN Magazine. Reach her via e-mail at firstname.lastname@example.org or by fax at (330) 668-6224.
Five years ago, at the age of 30, Scott Wakser left a high-salaried sales position with a national medical device manufacturer to set out on his own.
He had one mission: to show his former employer, and a handful of national, billion-dollar companies, that he could compete in their exclusive arena.
Today, Wakser is president of DiaMed Inc., a company which has grown to more than $6 million in sales, and is doing exactly what Wakser and Vice President Doug Sharpe said it would when they founded it in 1995. By staying local and focusing on customer service, the medical supply distributor has carved out a niche in an industry that has historically been dominated by a small handful of national players.
"I've always had the entrepreneurial spirit," Wakser says. "I didn't see myself working for someone else my whole life. When I was growing up, I had my own lawn service. I've always been a hustler that way."
While Wakser and Sharpe have focused on building business one physician office at a time in a limited territory that includes Ohio, Michigan and Western Pennsylvania, the two received confirmation of their success late last year when they won a $2 million contract from University Hospitals of Cleveland.
DiaMed is now the exclusive vendor of physician supplies to UH's 170 physician offices. And that hasn't gone unnoticed.
When Wakser and Sharpe left their sales positions at New Jersey-based Q-Med Inc., which develops, manufactures and sells medical devices and systems, to start DiaMed, they were told, "We'll have you out of business in six months," Wakser recalls.
"At the time we started, they [our competition] laughed at us," he says. "Twenty-four months later, they tried to buy us."
Physician Sales & Service Inc., a $1.3 billion medical supply distributor, based in Jacksonville, Fla., approached DiaMed with a $2 million purchase agreement in 1997, he says. The partners refused, but Wakser keeps the agreement in an easily accessible desk drawer, pulling it out on occasion as if to remind himself how quickly things can change.
Today, he says simply, "They respect us."
What makes DiaMed's success noteworthy is not necessarily the exclusivity of its industry, but the fact that the small North Canton company does not sell on price or product.
"We sell the same thing that the billion-dollar businesses sell," Wakser says. "There's no difference. Price does not create loyalty. The difference is what you will do."
So far, Wakser has shown his customers that there isn't much of a limit to what he will do for them. Rosanna Boveington, lab manager of Ohio Family Practice in Fairlawn, has used several suppliers over the years, but five years ago switched to DiaMed for the majority of her practice's supplies.
"When I need something, I call and talk to the same person every time. That's very important," she says. "If I have a problem, Scott sometimes comes himself."
It was that personal attention that Wakser noticed was missing from the industry when he decided to leave Q-Med. He and Sharpe gambled on the idea that enough of the industry's clients would sacrifice a big name for the personal attention they had never received.
"I thought, 'What a great idea,'" he says. "We would be the guys to service the equipment, to train the doctors how to use it, to show how to bill the products, and to really focus on service.
"Make the customer feel like a king, that was our goal."
While many entrepreneurs make that promise in the start-up stage, few are personally overseeing its execution five years down the road.
One of the ways Wakser personally monitors every customer's satisfaction with DiaMed is by sending out, reading and responding to customer surveys. He asks every customer to grade DiaMed's performance on a quarterly basis in areas such as customer service, sales representatives' knowledge and responsiveness and product quality and delivery.
The last question asks whether the customer would recommend DiaMed to an associate. Wakser says that if any of the questions come back with a poor rating, he calls the customer to attempt to rectify the problem.
But that's not to say he takes sole responsibility for maintaining high customer satisfaction levels. Visitors and clients will spot customer service programs in nearly every area of the company, starting with the friendly voice that answers the phone, "Hello. DiaMed: the company that cares."
Other customer-satisfaction measures include:
- A training program in which every new employee works a shift in every department of the business.
"I've worked the warehouse, and everyone here has packed a truck," says Wakser.
This training corresponds with his belief that every position is as important as the next one.
"I'm no more important than the delivery guy. He's the guy who's going to see the customer five times as much as I am," he says. "If you can't focus on 'we,' you have no company."
- All new customer service reps are given mirrors for their desks. This one's simple: Wakser believes that a smile is heard through the phone, and he wants to make sure his employees are smiling when they're talking to customers.
- The first office visitors approach upon entering DiaMed is Wakser's. His office, while small with barely room for two guest chairs, is the first in the building.
"I want everyone to know they have a right to see me and to talk to me," he says.
While the showroom houses an assortment of products including diabetic shoes, scooters, wheelchairs and walkers, for most customers, it's easier to shop from the convenience of their homes. DiaMed staff brings the products to the customer, then helps them with assembly, usage information or insurance coverage needs.
Wakser plans to continue to grow the retail side of the business, which accounted for $1 million of the company's sales in 2000, again selling the products on service, not price.
"We believe that within the next five years, we will be the dominant force in medical distribution in this area," Wakser says. "We know this marketplace. That's all I want to understand. I stay with what I know, so I don't lose my focus." How to reach: DiaMed Inc., (330) 966-7264
Going up against the big boys
Scott Wakser looks at his company's size as an advantage, not a weakness, in going up against his billion-dollar competitors for contracts. Here are three ways he uses DiaMed's size to his advantage:
1. As a smaller company, he is able to respond to the needs of his clientele more quickly, because he doesn't have bureaucracy to go through, he says.
2. A more focused organization can bring better service to the table, he says. A large company has lots of contracts, so each customer is one in a million. As a smaller company, the bottom line is that each company's business is imperative.
3. Selling by reference. Sell through other customers. Wakser develops a referral list that includes letters from happy customers on why they have chosen to do business with him.
"Whenever I have a good client, I always ask them to write a letter about why they chose us, and why they continue to do business with us."
It's that time of year again to make New Year's resolutions. If this isn't a tradition you follow, you may want to reconsider.
And what better time could there be to set new goals than the start of the new millennium? (No, that wasn't last year.)
Consider this: Research shows that those who make New Year's resolutions are far more likely to achieve those goals that those who don't. So, what do you have to lose?
Here are some ideas I've borrowed from the many businesspeople SBN's editorial staff spoke to over the past year:
1.) Lose weight. In November, Twinsburg-based PlanSoft, one of the area's most prominent Web companies, laid off 40 employees. The company cut its staff to turn a profit after investors started to grumble.
A sign of another dot-com in trouble or a smart business move that could serve as an example to businesses in all industries? You decide.
2.) Jump out of a plane. That's what Don Taylor, owner of Welty Building Co. in Akron, did when he agreed to take on the renovation of Portage Country Club. He knew the project would either help or destroy the reputation of the company he had just taken over. His work was scrutinized by 600 of Akron's most prominent citizens during the months his crew worked on the project.
The outcome? The country club's membership loved the work. And, it was done within budget. The project was risky, yes. But Taylor will tell you he'd do it all over again. In less than a year, he gained 600 new fans. Business has never been better.
3. Take a vacation. In October, Lee DiCola, chairman of Galt Industries in Canton, did just that when he took a sabbatical from his job and traveled to Burma, Cambodia, India and Egypt (among other locales) with his wife. Can you think of a better way to refresh a high-pressure position?
4. Buy that diamond you always wanted. Heck, give me a few. That's how Sterling Jewelers (based in Fairlawn) grew to $1 billion in sales. The company owns a diverse group of jewelry stores that appeal to just about every customer profile. If you're not a Roger's customer, you probably shop at Osterman. Or Jared. Or Kay ...
5. Forget about the money for once. Linda Smithers, owner of Susan's Coffee & Tea (with locations in Akron, Canton and Massillon), sold her company to an investment firm last year, then bought it back when she suspected the company was sacrificing quality to save money.
Her story showed us that very few decisions are as permanent as they may appear at the onset. While the jury's still out, Smithers insists that profits can be maintained by prioritizing quality, not sacrificing it. Connie Swenson (email@example.com) is editor of SBN Magazine.
Whether or not the predictions we're hearing are accurate, the economy is in for some kind of a change. If you read everything you get your hands on, you might believe that we're in for a recession soon.
My peers in the journalism community are poising their pens to write about what they deem inevitable. A turn in the economy is great fodder for business journalism.
Most of the business owners I talk to don't seem as concerned. They're not hoarding their cash. They're not laying off employees. In fact, the growth-oriented businesses SBN Magazine has been covering the last several months are talking about the investments they plan to make -- or are now making --- to prepare for long-term growth.
Why is this? For one, when the U.S. economy is facing a predicted recession, money gets cheaper. That means many businesses take the opportunity to invest in new technology and equipment at lower rates. But even at those costs, if a company is not poised for growth, why would it invest in that direction?
The answer is, at least from the company owners I have spoken to the last couple of months, that they indeed are poised for growth -- even (and especially) if their competitors aren't.
Whether or not you believe that President Bush's tax-relief package or Federal Reserve Chairman Alan Greenspan's rate cuts will spur the economy, economists will tell you that monetary policy actions take at least 18 months to yield results. While these actions can have immediate effects in terms of convincing businesses and consumers that better times are around the corner, they can't affect the current economy.
Savvy business owners know that this forecast is not a bad omen. They see it as an opportunity to jump ahead. They know that they must build upon the policies put in place today to reap the benefits when the economic landscape evens out a year or year and a half from now. There will be some fallout, as we've witnessed in the dot-com industry of late, but these savvy business owners say, better our competitors than us.
Now is not the time to sit still. Better times are ahead, but we won't all be here to enjoy them. On a large scale, you can learn from companies such as Apple, which is preparing to boost its position in the marketplace by adding extras, such as standard CDs, DVDs and increased power levels, to its computer products.
On a local level, you can learn from our cover story this month about a company increasing its capacity so that it can expand its product line.
These companies are staying within their areas of expertise, but expanding their capacities. Their strategies share a common philosophy. They are positioning themselves for growth by sticking to what they know best.
It may not be the time to take on a big risk, but as they'll tell you, it's certainly not the time to be stagnant. Connie Swenson (firstname.lastname@example.org) is editor of SBN Magazine.
I am constantly searching for innovative companies to feature on the pages of this magazine. However, when most of us define innovation, rarely do we picture a century-old family business whose staple product is jelly.
This month, I was surprised to find out how much The J.M. Smucker Co. has to teach other businesses. That's right. Even you, running your dot-com start-up, can learn from this family-run producer of jelly, juices and butterscotch sauces.
What, you may ask, is innovative about food items so basic your grandmother probably had the same ones stocked in her refrigerator?
The answer can be found in two words: Magic Shell. You know, that topping that magically freezes in seconds on your ice cream. Sundaes gained new appeal for me at age 12 after my mother brought this product home and I figured out that I could have a fun, candy-based science experiment while enjoying my ice cream.
While I don't know exactly how the Magic Shell product came to be, I do know about some of the new products The J.M. Smucker Co. has unveiled recently. Like frozen, round, crustless peanut-butter-and-jelly sandwiches that are already becoming a hit not only in the grocery store, but with school districts and restaurants.
The company has been able to create new products, with incredible appeal, that aren't really new. The company's governing principles dictate that the company be run by Jerome Monroe Smucker's 1897 basic beliefs. So, Tim and Richard Smucker, who run the company today, don't diversify much from their core products. The J.M. Smucker Co. has always produced peanut butter and jelly. It just turned it into a product that every kid wants. And in an age where parents are buying cereal that comes packaged with milk and a spoon, what parent isn't going to like the idea of buying a pre-made, crustless sandwich?
So who comes up with these innovative, yet traditional ideas that have helped maintain the company's success over the years? The J.M. Smucker Co. employees, who, not-so-coincidentally, have put the company within the top 25 of Fortune magazine's list of the 100 best companies to work for since 1997.
The ranking is based on a number of factors including a low employee turnover rate (the company boasted a 4 percent turnover rate in 1999), job growth, and employee training. It's also interesting to note that 31 percent of the company's employees have worked there for more than 15 years.
When I asked Tim Smucker, co-CEO, about the ranking, he was somewhat aloof: "Our goal isn't to get the award," he said. "Our goal is just to treat people the way they want to be treated."
That sounds too simple. Connie Swenson (email@example.com) is the editor of SBN Magazine.