Like many older corporate executives in Pittsburgh, John Mole received his baptism by fire at giant Westinghouse Electric Corp., where he served in the research lab for almost 30 years. But as he says in the understated accent of his British homeland, I retired in 1990 because I got thrown at age 65.
But if to retire means to stop working, rest and relax through the golden years, Mole hasnt exactly retired.
Instead, he went straight to the green pastures of the Service Corps of Retired Executives, where he could relax with high-strung, high-energy, tenacious entrepreneurs who are dealing with day-to-day startup and growth issues. And he couldnt be happier.
I had a choice of doing full-time consulting, but I decided I had had enough of government and corporate politics, says Mole, now 73 years old. I find it very good working for small businesses in western Pennsylvania.
Mole spends much of his time with one of SCOREs new programs, in which entrepreneurs can ask questions and deal with issues via Internet correspondence. Since many have to do with computer software and technology-oriented problems, which he used to address at Westinghouse, Mole often answers. To date, he has answered roughly 150 requests, some leading to ongoing Internet correspondence.
When I recognize that I have helped save three to four companies from going bankrupt, its worthwhile, he says of his nine years of volunteer efforts at SCORE.
Asked when he plans to call it quits at SCORE, he casually mentions his garden and other responsibilities at home, but offers only this: It depends on when I conk out.
Hi, my name is Dan Bates, and Im an apneac.
Of all the annoying chronic ailments to gnaw at me daily, this has to be the grand kicker of them all a disorder that makes me tired, grumpy, unfocused and marginally unproductive. And it pesters me only at night, when Im supposed to be fast asleep.
Its called obstructive sleep apnea, and it causes sufferers to stop breathing for brief moments throughout the night, just long enough to wake them from their favorite dreams. As I write in the lead story of this months Managing Your Business section, little did I know that many business people just like me are trudging through life with the same problem and dont even know it.
I wouldnt have known it, either, if a public relations consultant representing Respironics Inc., a local company that manufactures devices to treat apnea, tried to convince me to write an article about the disorder and its apparent effects in the workplace. As I typically do, I told the guy it sounded interesting, and would he please send me some information.
But as I began to read about the symptoms a long list ranging from daytime fatigue, lack of concentration and irritability to frequent snoring, morning headaches and trouble driving long distances I had a revelation: This brochure was talking about me.
Thats when I talked the public relations guy into sending me to the Greater Pittsburgh Sleep Center at St. Francis Hospital for an overnight sleep study. After all, I needed first-hand information about the seeming humiliation of going through such a study to write my article, I reasoned even if I didnt actually have it.
But a weird thing happened on the way to doing this story. The public relations guy convinced KDKA-TV news reporter and weekend anchor Bruce Pompeani to do a long special report on sleep apnea, and he wanted me to serve as the subject. Always looking to shamelessly promote SBN, I agreed.
So for an entire afternoon and evening, he and a cameraman followed me around my office asking about the potentially debilitating effects of obstructive sleep apnea. They videotaped the couch where, Bruce later told all of Pittsburgh, I occasionally take a short afternoon nap to make it through the day.
Then they followed me to the hospital, where they interviewed a sleep technician while she glued an endless entanglement of wires and electrodes to my head and body. They even taped me as I lay asleep, tossing and turning, throughout the night, and the next morning, when Dr. Sukhdev Grover told me I had roughly 18 apnea events an hour, for a total of 135 that night. Bruce ended his report mentioning that the doctor told me I could stand to lose 20 pounds.
The apnea special report aired several weeks later.
For weeks afterward, people from all over called to affectionately harass me about my willingness to humiliate myself before all of Pittsburgh. They laughed. I laughed. We all laughed. And why not? I have no shame.
But they also asked why I would put myself through that. While I may joke about it, the doctor painted a clear picture of how serious sleep apnea is and how common it is. Imagine an apneatic surgeon with knife in hand. Or a school bus driver. Or a nuclear power plant operator who is too tired to pay attention. The doctor told me apnea can lead to heart disease, high blood pressure and stroke in more severe cases. Hows that for serious?
I interviewed two businessmen for the Managing Your Business article who told me the effects of obstructive sleep apnea were devastating to them professionally and personally before they finally sought permanent relief.
For as many people who called to say they saw me on T.V., just as many called to say they hadnt heard of it and that maybe, just maybe, they also have apnea and were going to look into it. I guess I did my job.
And for the rest of you, I think too many of you dont take the time to take care of your own health, whatever the ailment. Youre entrepreneurs, after all, so you dont have time to worry about such details. Maybe its time to take care of those nagging chronic ailments before they get the best of you.
And maybe, just maybe, you can achieve better health and a healthy dose of shameless self-promotion in the process like I did.
But for all of you public relations people out there, Im drawing the line at any stories about the colon. Know what I mean?
If you look at the region with a glass-half-full attitude, a new program from the Pittsburgh Regional Alliance and the Greater Pittsburgh Chamber of Commerce wants your help.
The organizations are actively recruiting Pittsburgh Regional Champions, people who will be trained to serve as volunteer ambassadors touting the regions positive assets.
The program began with a concept paper written by participants in the Leadership Pittsburgh XII class in 1997 as its graduation project. Last fall, a director was hired to develop, launch and lead the program. Its goal: to gain a critical mass of people believing that the Pittsburgh region is a great place to live, work and do business.
The main goal in this is to get everybody to think positively about the region, says Hilda Pang Fu, director of Pittsburgh Regional Champions. Our hope is that all business owners here will start to focus on the assets of our region and, like you look at a glass, look at the part that is full.
In addition to training, Champions are supported in their efforts by a Quick Reference Guide with talking points. It contains 14 common complaints, and detailed rebuttals for each. It also includes key messages for the following categories of people in the region:
- Young adults and students Go anywhere and get a job, OR discover Pittsburgh and get a life.
- High-tech professionals Pittsburghs Technology Corridor is your superhighway to success.
- Executive managers The Pittsburgh region is committed to maintaining the right conditions for business success.
- Homemakers and heads of households Compare Pittsburghs quality of life with any other cityours is tops!
- Tourists and conventioneers Discover Pittsburgh a modern, cosmopolitan city with a small-town approach to hospitality.
Says Fu: The basis of it is a person-to-person campaign with an impact that should rub off on other people. Its a key component of marketing this region. How to reach:: Pittsburgh Regional Champions, Hilda Pang Fu, (412) 392-4555, ext. 4514, or e-mail her at firstname.lastname@example.org.
There was a time not too long ago when the World Trade Center Pittsburgh would introduce local environmental services company owners to business and government officials in Asia and South America, then walk away. Not anymore.
Now, this non-profit organization has taken global match-making to new heights, thanks to a program funded by the U.S. Department of Commerce. The program, called the Market Development Cooperator Program, is aimed specifically at local environmental services companies that deal with everything from municipal solid waste and waste water treatment services to manufacturing pollution control and residual waste management. The goal, says Mame Bradley, president of the World Trade Center Pittsburgh, is to close business deals, particularly in China and Brazil, for local and other domestic service providers.
Its a competitive program designed to find ways to get U.S. companies into environmental projects overseas, Bradley says. And the opportunities are significant.
But its not traditional match-making, she says. As part of the program, the World Trade Center hired global environmental consulting veteran Wayne DiBartola, who also had been an active board member of the Trade Center at one time, to run the program for the center. For the past three years, he has been establishing relationships with business and government officials in both Brazil and China and, ultimately, scouring those countries for environmental services opportunities.
But he also takes the relationship-building a step further. As he moves forward with specific project opportunities, he also helps find overseas partners for the local companies, along with international banking resources that would help finance any projects.
Stateside, DiBartola continues to amass a database of local and other domestic companies interested in exporting their services. The database includes a statement of qualifications, capabilities, work experience and other qualifying information. Of the 100-pus companies currently in the database, at least half represent the Pittsburgh region, with the rest from other parts of the United States, per the program agreement with the Department of Commerce.
As DiBartola finds particular opportunities, he then matches the need with the capabilities of various companies in the database and creates partnering teams that then put together joint proposals to complete a particular project. The World Trade Center does this for free, Bradley says, although participating companies must agree to pay the center a 1 percent commission of sorts on any successful contracts.
What the government is funding us to do is stay much more involved in these projects, putting together the infrastructure and identifying partners and sources of financing, Bradley says. I think weve taken this model further than anyone in the U.S.
So far, the program hasnt yet successfully closed any deals for companies, but Bradley says they do have several proposals out there on specific projects in China. As for Brazil, she says the program lost its momentum there last year briefly with the devaluation of the real. But DiBartola recently has identified some good projects there.
Projects in which the center has submitted proposals so far include industrial waste water treatment projects in Brazil, municipal solid waste projects in China and Brazil, and an ultra-clean coal facility in China. However, as Bradley points out, The environmental industry is very broad.
Bradley acknowledges that ramping up the program has taken a long time but says that relationship building with overseas officials is a lengthy process that should soon pay off.
Weve developed relationships over the years, and now were experiencing the long-term benefits of developing those relationships, Bradley says. Now I will feel real comfortable if we start closing deals. But I think were within striking distance of a few.
How to reach:The World Trade Center Pittsburgh, (412)227-3188. Its Web address is www.wtcpa.org.
When I first met Boyd, he had just returned to the States from a tour of duty in Vietnam. He was a stocky Southerner with the enthusiasm of a salesman and a seeming penchant for helping kids. Welcome to Boy Scout Troop 269, he told us.
As our new Scout master, Boyd donned his uniform with military fervor, and he expected the same of us. He was our leader, and his mission was to turn a bunch of scrawny, pubescent 12-year-olds into men.
Im sure he taught us how to tie knots. He helped us embrace Resusci-Annie. And he showed us how to cook on an open fire, rain or shine, winter or summer. To this bunch of sixth graders, he was a leaders leader.
Right up until the day we went for an all-day hike, armed only with day-packs and walking sticks, that is. Thats when Boyd, dressed in his military camouflage pants, led us running through the forest chasing Charlie. For a brief flash, I believe he pictured himself back in a Far Eastern jungle with a platoon of new draftees. So much for this leaders leader.
Needless to say, we never managed to catch up with any elusive Viet Cong in forests around Pittsburgh. And as far as I can recall, Boyd never did escape the parallel world in which he lived, even as we continued to follow his lead.
But, as I look back, this Picasso-esque Boy Scouting experience does offer some rather interesting insight into what leadership should or should not provide. And its something business owners need to consider whether you live in Allegheny County or not as we approach the subject of this months cover story, the county executive election. Consider the following:
Motive Clearly, Boyd agreed to lead the troop with lofty intentions. I believe he truly wanted to help the boys in their struggle for maturity. What he resorted to, though, was a way to painlessly relive those war-time memories which no doubt reshaped the rest of his life.
That obsession with the past diminished his ability to lead kids into the future. And what did we know? We got to play war with a real veteran every time we headed for the woods.
Moreover, older boys wrestled for leadership of the various patrols, or subgroups, of Scouts. They simply wanted the power to boss others around. Most of them matured to become high school bullies.
The motivation to lead should come from a passionate desire to change or greatly enhance what is. And its a willingness to roll up your sleeves and serve the greater good of your constituents. It shouldnt be a popularity contest, nor should it serve as fuel for some power kick.
Its not about power or control or even a desire to grasp a sense of immortality as you leave your legacy on a building or park named after you. Its about making things better through your ideas and motivating others to greatness.
Vision How can you possibly effect change and motivate others to greatness if your sense of vision is one of Charlie from your active imagination? Leadership is all about seeing far past what is, envisioning what could be, and then effectively convincing others to help pursue your dream.
Leaders without vision are administrators, and they manage; they dont lead. Indeed, the status quo may prove acceptable to administrators, but not to true leaders.
The plan Leaders with a vision but no plan to realize that vision are dreamers. Capturing Charlie by chasing shadows with sticks and in Pennsylvania woods does not constitute a plan. Leaders must serve as strategic big-picture thinkers, getting past the identification of problems to offer viable, realistic solutions.
Nobody will change the countys property tax assessment system or reputation of patronage and cronyism by simply recognizing the need for change.
The followers Just as a leader must be held accountable for his or her actions when it comes to motives, vision and strategic planning, some responsibility rests on the shoulders of the followers as well. Dont support or follow a leader without vision or a plan.
Youre asking for trouble in this county executive race if you choose to vote only by party affiliation without considering character and integrity, charisma, presence as the public persona of the region and the desire and a plan to aggressively foster growth and prosperity. Being Democrat or Republican guarantees nothing by itself.
In the end, whom you pick to guide the county into the next millennium will determine whether the region succeeds or fails in this unique opportunity to reap the benefits of the new Home Rule Charter. And make no mistake: Change is the order of the day.
If the leader you choose suddenly decides to lead you through the woods to chase Charlie, the best you can do is drop your sticks and go home. As for me and my scouting buddies, we had a lot of growing up to do.
Daniel Bates (email@example.com) is editor of SBN.
Rock Ferrone isnt what youd call a patient man. He never has been. Perhaps thats why his high school principal once took him aside after he missed 60 days of school and told him, Some kids just arent meant to finish school and youre one of them.
He was too busy launching his first business. That year, he dropped out of school to become an entrepreneur.
If only his principal could seem him now. Frenetic impatience, coupled with an intense, high-energy passion for problem solving and an uncanny gift of inventiveness, has led him down a frenzied path that has included car repair, telephone system installation, awning design and production, commercial printing and even publishing before he settled into printing equipment manufacturing.
But until recently, even Ferrone, 36, says he could never have imagined that such impatience with time would place him among the clouds in the cockpit of his own small airplane. Or speeding down the runway of his own airport. Or at the drawing board mapping out plans for an airport industrial park that would become one of the states prime tax-free economic development zones and one in which his own manufacturing company would become the anchor tenant.
Ferrone has embraced general aviation so fervently that it literally has changed the way he and his company, Rock-Built, do business throughout the eastern United States. This new disciple of flight has become so passionate about how even smaller companies can benefit from the adoption of general aviation into their businesses that he has agreed to help the states Bureau of Aviation create a marketing video on its virtues. The governments goal: To attract a whole category of business growth and prosperity in the state via general aviation.
So what is general aviation? In its simplest form, its the use of smaller, noncommercial aircraft for recreation or business. According to Demetrius Glass, director of Pennsylvanias Bureau of Aviation, the states system of airports makes the region among the best in the country for general aviation.
There are 835 airports and heliports in the state, 148 of them public-use airports that can be utilized any time by the public. Such numbers make the state fourth in the country for its number of airports.
Still, general aviation has maintained a seemingly low profile in Pennsylvania when it comes to promoting economic development and job creation. States such as New Jersey and Arizona have found visible ways to sell the virtues of general aviation to the business community, leading to economic development and growth in those regions.
If Ferrone has his way, general aviation in Pennsylvania will become a trendy buzzword of the new millennium, and he in all of his expressive intensity will find himself among those leading the charge.
Says Glass of Ferrone: He not only has enthusiasm, but he also has the ability and energy to get things done.
Kind words for a man who tends to make quick decisions and move forward at warp speed, with little patience for government bureaucracy or politics. But hes quickly learning the ropes as he raises government funding for his airport efforts and weaves his way through the maze of government regulation and bureaucracy.
Since his odyssey began, he has flown a number of times to Harrisburg and even to Washington, D.C., to make his rather commanding voice heard among legislators and regulators.
His biggest challenge, though, is to keep in the front of his mind his main reason for entering new airspace in the first place: To help his printing equipment manufacturing business grow more quickly.
Getting there from here
Ferrone had been working feverishly with a Philadelphia-area printing company in 1997 on the installation of a new prototype Rock-Built stacker that connects to the back end of a printing press. As part of the process, he would come across a product shortcoming, then drive back to his Sharpsburg headquarters, design a solution to the problem, then race back to eastern Pennsylvania to make the adjustment.
The defining moment came after making five arduous trips to Philadelphia in four days. On his final trip, he caught a glimpse of a small airport near the installation site.
I thought, I have to figure out a way to fly in one of those airplanes, Ferrone says. I call it a moment of temporary insanity.
Insanity or drive, impatience or vision, call it what you will. Ferrone set his mind to his new obsession with high-octane determination. The first place he looked was on the Internet. Then, armed with information, he began flying lessons at the Allegheny County Airport. He says he initially had to sort of sneak around because his wife, who was eight months pregnant at the time, didnt like him flying.
But as Ferrone says, I knew that the only way I could develop the equipment was to be at two places at once. I knew that the major hurdle was to get to the plant to look at the problem and then come back and solve the problem.
As with everything else he does, Ferrone put all of his energy into his new quest. While the Federal Aviation Administration requires at least 40 hours of flight time to earn a license, and the national average is about 70 hours, Ferrone says he logged roughly 500 hours before taking the time to take the licensing test.
How he logged so many hours is a testimony to his momentum-building drive. He wasted little time in making general aviation his own. He invested an estimated $230,000 in a new four-seat, single engine Cessna Skylane 182, then hired a certified flight instructor to go with it. Every time he visited a customer, he took along the instructor but flew himself. Hence the 500 hours.
Most business owners think flying is out of reach and that it seems so far out of the spectrum of reality, Ferrone preaches, each word more enthusiastic than the one before. But to focus on my business, I needed to be able to get there quicker.
For Ferrone and his $3 million-plus revenue manufacturing company, which sells equipment that starts in the $100,000-plus range, the benefits were clear.
Saves valuable time and money. Prior to buying the airplane, Rock-Built would get a call from a customer that required immediate service on one of its trimmers or stackers. Ferrone and/or his technicians either got in a car and drove to the site, which typically took at least five hours, or hastily arranged for the earliest commercial flight possible, which proved costly and time consuming.
I cant tell you how many times Ive found myself running through the airport carrying hundreds of pounds of tools, Ferrone says.
Often, he says, the technician had to time his service efforts around the flight schedule, which meant he either had to leave before completing the service call or risk missing the flight. Overnight trips became common.
We were at the mercy of the airlines, Ferrone says.
For frequent trips to a customer in New Orleans, a round-trip commercial flight on a days notice ran as high as $1,800, plus hotel and other expenses. On the other hand, the companys new Cessna costs roughly $100 an hour, mainly in fuel. A trip to a Syracuse customer took close to 10 hours on the road, which typically meant Ferrone and his technicians would have to leave the night before a scheduled visit. Now, they can leave at 5 a.m. and arrive by 7 a.m., saving an entire day, as well as hotel costs.
From day one, the airplane has been cost-justified, Ferrone says.
Mike Negovan, corporate aviation services manager for charter service Corporate Jets, says the decision to fly other than commercial jets in many cases depends on how much value the company places on its employees time.
The trend is that if a company seeking transportation realizes the value of staff tim e vs. the cost, then theyll find chartering a jet a beneficial option, he says. If the bottom line is how much does it cost, then they usually go to commercial.
Demonstrates a stronger customer service commitment. Having the plane allows Ferrone and his technicians to leave at a moments notice for a clients printing plant and arrive within a couple of hours of the call. For the customer, that means less down time. While Rock-Built does have customers across the country and in China, Ferrone says the plane is used mainly to serve customers within roughly 600 miles of Pittsburgh. Any further and the cost becomes cost prohibitive relative to commercial flights.
Ferrone attributes his companys success in selling equipment to the Chicago Sun-Times to the fact that his employees could reach the company at short notice.
We are finding that for smaller business owners who want to get product in and out quickly or customers or technicians in or out quickly, one of the best ways to get there is through general aviation, says Glass, the states aviation bureau director. Yet some business owners are just not catching on about how air transportation can help them.
Saves on the wear and tear of employees. Without question, constant trips to customers printing plants were beginning to take their toll on both the technicians and Ferrone himself.
When you add up things like getting burned out on driving, general aviation has given me a new lease on life when it comes to building my business, Ferrone says.
Barriers to entry are incremental. Businesses can make an investment in a plane at a variety of entry points, from small single-engine used planes for less than $100,000 to twin engines, eight-seat turboprops and small corporate jets.
The nicest thing about aviation is that its absolutely incremental, says Ferrone, who already is considering an upgrade in the next couple of years to a six- or eight-seater. I would recommend that you buy an airplane that is adequate, put your toe in the water and then see what you can do.
Flight of fancy
Of course, Ferrone had to jump in head first, letting his growing love for flying and his lack of patience create a rather strange but opportunistic twist to his flight of fancy. Ferrone quickly tired of his 45-minute drives from Sharpsburg to the Butler County Airport, where he kept his plane for $200 a month especially when the plane trips themselves often took less than that.
They say that necessity is the mother of invention, Ferrone says, so when Im spending more time getting to the airport than it takes to get to a customers plant, it doesnt take a rocket scientist to see that I
needed to have a closer airport.
Not one to miss an opportunity to solve problems, he activated the Global Positioning System in his plane one day as he flew over his headquarters. The system, which has an option that will identify the nearest public-use airport to the plane at any given time, identified West Penn Airport, a small airstrip in West Deer Township a 15-minute drive from the office. So Ferrone landed there.
But Ferrone didnt just want to rent space in one of its hangars. In March 1998, he sought the owner and asked if hed sell. The owner agreed, and they closed the sale in August 1998. For roughly $575,000, Ferrone bought the airport, which included 144 acres, hangar space for 40 planes and 53 aircraft that rented space there.
Meanwhile, Ferrone had been looking for acreage on which to build a larger manufacturing facility to replace the Sharpsburg building he was quickly outgrowing. The West Deer site along the edge of the runway would suit Ferrone fine, he figured. His plan was to take full advantage of his proximity to the airstrip, ultimately being able to fly customers right to the companys front door to demonstrate its equipment and make a unique impression.
All the while, Ferrone notes, the airport was generating $3,000 a month in revenue and it offered a fueling service, which he managed to turn into a profit center. Prior to his arrival, he says, the fuel service sold about 15,000 gallons a year. Now its pumping 20,000 gallons a month.
We created a second business by osmosis, he says.
The grand plan
Once Ferrone began to map out his plan for the airport, now named Rock Airport, there was no stopping him. He figured that if such a site proved valuable to his company, why wouldnt others find it just as valuable, especially with access to Route 28 and a railroad line that runs along the edge of the property?
Township supervisor George Hollibaugh, who manages the airport for Ferrone, suggested that West Deer was in need of aggressive commercial development efforts such as what Ferrone had in mind. Thats when he hired David McMaster, a real estate attorney who had been a partner with law firm Papernick & Gefsky for the past 14 years, to serve as vice president and general counsel.
When Rock quickly explained the economics of it all and that he was moving his company to the site, I thought that for a business man, thats a smart move, says McMaster.
When all was said and done, Ferrone somehow convinced the local school district, township, and, ultimately, the state, to designate the property, including adjacent property that Ferrone would later buy, one of its new Keystone Opportunity Zones. The designation, which went into effect last spring, turns 207 acres within the property into a local and state tax-free zone for the next 12 years.
Ferrone says he wants to model it after an airpark in Scottsdale, Ariz., which houses 1,800 businesses that provide 25,000 jobs.
Said Kent George, director of aviation for Allegheny County, in a letter to the states Department of Transportation supporting Ferrones effort: His work toward the establishment of the old West Penn Airport into a viable entity is commendable, and we at Pittsburgh International Airport and Allegheny County look forward to working with him in this endeavor.
Without a doubt, Ferrone has taken his general aviation interests further than most, but his struggle to make the project work is by no means over. Crews are already at work clearing trees and moving earth to make way for a new and improved runway. That work is expected to finish next spring, after which a new runway will be created. Only then can Rock-Built and others begin their plans to construct buildings around the airstrip.
Funding for the work also is taking time, since much of it will come from the state and federal governments. However, Ferrone will be required to turn over ownership of the airstrip itself to a public entity to become eligible for the millions of dollars available for such projects. All told, Ferrone says, the work will cost between $20 million and $30 million.
Still, as the states Glass stresses, the state is very interested in seeing public-use airports such as Rock Airport succeed, since such airstrips serve as relief for larger airports, which struggle with excessive air traffic.
We consider airports like Rock to be crucial for the system, he says.
Asked his evaluation of the projected success of the project, Glass simply says, Lets see what happens.
In spite of all the obstacles, government regulations, funding issues and the coordination of the massive airport project, Ferrone doesnt budge from his initial enthusiasm about flying and what it does for Rock-Built.
Says Ferrone: Im convinced that, for our business, its the way to go.
How to reach: Rock Airport, for information about the Keystone Opportunity Zone there, at www.rock-port.com Daniel Bates (d
firstname.lastname@example.org) is editor of SBN.
Daniel Bates (d email@example.com) is editor of SBN.
Paul Mathews, president of family-owned Mathews Printing, almost hates to admit it, but the fact is, he never saw it coming.
He’s not talking about the back-to-back fires that virtually shut down the business for five months. Or the slow response by the insurance company to settle the damage claim. Or even the substantial loss of customers as a result.
Rather, Mathews, 46, is referring to what happened when he and two of his brothers decided to aggressively target their remaining customers for more work to quickly make up for lost time, instead of going after new customers. The strategy worked wonders, he says, right up to the moment in early 1997 when the company suddenly lost two customers and 10 percent of its revenue.
The loss was enough to put Mathews Printing into the red over the course of its next fiscal year. All things considered, though, it may have been the best thing to happen to the 30-year-old business. After all, the company was in serious need of overhauling its sales and operations strategies anyhow.
The sudden loss, therefore, became the company’s much-needed catalyst for change. And the Mathews family accepted the challenge, taking steps that brought the company back to what appears to be a full recovery.
“I knew we were going to pull it off because we had no choice,” Mathews says.
Here’s what happened.
Putting existing customers first
Paul Mathews’ mother, Mary Ann Mathews, started the company in 1969 as a quick-print operation and built it into a full-service printer that now can print full-color brochures, direct mail, bound books and other office communications. Paul and his brothers took over five years ago, facing two fires along the way.
After the second fire in the early 1990s, Paul Mathews says, rebuilding proved costly, especially since it took a long time for the insurance company to settle its claims. That meant tapping its own cash to rebuild its facilities and sales.
“During that time, cash was very tight, because we were down for so long and customers had started to go elsewhere,” Mathews says. “As we recovered from the fire, we didn’t have the capital we needed to recruit and keep good sales people. In fact, we lost three very good people [during the shutdown].”
That’s when Paul and his brothers, Brian and Bob, decided to focus on what Paul calls a classic strategy leverage existing accounts to increase sales.
“It worked wonderfully,” Paul Mathews says. “We could become more efficient producing their work because we got to know their needs, and we were making money. All was well and good at Mathews Printing.”
That is, until January 1997, when one of the company’s larger customers suddenly went out of business and liquidated its assets. While Mathews Printing got its money, it lost 5 percent of its revenue and, perhaps more important, a steady stream of work.
Paul Mathews’ reaction? “It was, ‘Holy cow, 5 percent of sales disappearing in one month.’ When one spends several years building accounts with existing customers, one doesn’t replace them overnight. It takes about a year to develop such a regular customer.”
Still, he and his brothers stuck with their original strategy.
That lasted until March of that year, when a customer that represented about $100,000 worth of business annually for Mathews faced a change in management. The company decided to shop around its printing needs and left Mathews’ sheet-fed printing presses for a larger web press. That loss, coupled with the first one, added up to more than 10 percent of the printing company’s business.
“I tend to be a very optimistic person, and, faced with a challenge, I tend to figure a way out,” says Paul Mathews. “But when the second event occurred, I was just plain old numb. We then laid off some people and looked at every penny 200 times.
“We became reluctant to invest our precious cash into new technologies so that we could stay afloat. Suddenly we had to retrench.”
That June, the company’s fiscal year ended with “a little money,” but by the next fiscal year, Mathews Printing “lost a lot of money,” Mathews says. “For all intents and purposes, it was lost sales from those accounts.”
New sales strategy
Even before the major loss, Mathews and his brothers finally faced the fact that they were in a crisis.
“At first, we didn’t want to believe it,” he says.
So what made him a believer?
“The checkbook balance. It’s when you start to think about using your line of credit to cover losses.”
Mathews admits that overcoming such devastation took lots of time and effort over the next year, but it’s an effort that has carried the company back into the black and, ultimately, set it on a stronger long-term growth track. To get there, his steps included:
1. Scrapping the existing-customer-only strategy. Mathews realizes now that such a strategy by itself wasn’t prudent, since it ignored the prospect of adding new customers. That left him vulnerable to losses when even a small number of customers went elsewhere.
“To this day, I believe fervently that it’s a good strategy, but just not as a mutually exclusive strategy, and we made it a mutually exclusive strategy,” Mathews says.
Larry Lewis, president of sales consulting firm Total Development Inc. in the North Hills, likens the strategy to fishing for marlins. They take a long time and an extreme amount of effort to catch, and when you do, the fish will “feed your family for a month,” he says. On the other end of the spectrum is the snapper, which is plentiful and easy to catch, albeit a bit messy. In between is the sailfish, which is large but not as large or difficult to catch as the marlin.
“The moral is you have to have a balance between little fish, medium-sized fish and big fish,” Lewis says. “It’s an issue of having a balance of customers. If you only have 10 accounts, it’s not a good strategy to just expand the business you have. But if you have 1,000 accounts, you shouldn’t have a problem.”
2. Developing a disciplined outbound sales program. Mathews says the program took roughly 10 months to implement and included him and his brothers aggressively seeking new customers whose average printing requirements totaled roughly $1,500 per order. That’s up substantially from the old days, when the average order was about $80, he says.
“It was time consuming, but it was something we should have had in place for years,” Mathews says.
3. Putting the Mathews brothers in the forefront to sell. “That made a huge difference in getting new customers,” says Paul Mathews. “Customers now can go right to the owners, and I try to have more contact now on a day-to-day basis and try to manage the sales process.”
4. Seeking outside advice. One of the smartest things Mathews says he did was to seek advice from a number of printing trade organizations and, finally, a paid sales consultant from Washington, D.C. The consultant cost the company a “couple thousand dollars,” but Mathews says the price was small compared to the results.
“The one thing about consultants is they rarely come in and enlighten me with new information,” Mathews says. “But they usually help me come to grips with what I already know. He helped me to rethink the marketing of Mathews Printing.”
5. Turning over operational control to other employees. To make the sales effort work, Mathews had to turn over day-to-day control of the operational side of the business, including cash management, production schedules, production planning, etc., to other employees
“Initially, I wasn’t comfortable letting it go because it was change,” Mathews says. “It was too easy to keep doing it myself. And I didn’t think other employees could do it as well. But they did. And sometimes they did it better.”
As part of that transition, Mathews hired an experienced production manager who “lent a degree of maturity and experience that I think we lacked,” he says.
Mathews acknowledges that this sales strategy will run its course as the company grows, so he already is planning to add more sales people and further refine the strategy over the next year. He’s working on making the order processing effort more efficient.
The result, says Mathews, is that Mathews Printing is on target to be ahead for fiscal 2000, with sales already 15 percent ahead of the previous year’s.
Did Paul Mathews learn his lesson? He says he has, and then some.
“The markets do change, and we have to remain a nimble and alert company,” he says. “And while we may have our setbacks in the future, we want to make sure we’re strong enough to respond.”
How to reach: Mathews Printing, (412)201-1147
Daniel Bates (firstname.lastname@example.org) is editor of SBN.
It’s just about midnight at the Roseman household, and all is quiet as Jack Roseman, 68, rests peacefully amidst the stillness in the dark.
Suddenly an alarm sounds, and Roseman awakens. Anyone else would curse the disturbance before fighting his way back to sleep. Not Roseman. He merely smiles.
It’s only the alarm on his wristwatch, which he sets to go off every night at midnight.
Says Roseman: “It means I’ve lived to see another day.”
So it goes for the man whom doctors said had only one day to live back in 1973. That’s when the pressures of the entrepreneurial workaholic life led to a massive heart attack which basically destroyed half his heart.
Prior to that, this Massachusetts native with an advanced mathematical mind had been working with partner John Godfrey to build Online Systems, a Pittsburgh-based mainframe computer time-sharing company, from a $1 million-revenue operation in 1970 to roughly $35 million in sales before selling out in 1980 to what today is known as Sprint.
But in 1973, after putting in 18 hours a day, seven days a week, overseeing three shifts of workers a day, his world came crashing down. Doctors told him death was imminent.
“In 1973, I said, ‘I have to find a life,” Roseman says, smiling. “When you see death coming, what really pushes you is, ‘What are you doing on earth? What is your mission? What is your purpose? Is it just to exist?’
“My life was to try and make the world this much better. At times it sounds a little arrogant, because who the hell am I to make life better? But to this day, that is my driving force. Now the doctors says that work is keeping me alive.”
With help from quadruple bypass surgery in 1982 and the money he made over the years as a successful business owner this high-tech entrepreneur has made educating and mentoring others his mission in life. As an adjunct professor at Carnegie Mellon University’s Graduate School of Industrial Administration, he teaches entrepreneurship in the school’s Donald Jones Center for Entrepreneurship to some of the region’s brightest up-and-coming entrepreneurs. He also is director of the center’s 12-week Entrepreneurial Management Program, a hands-on winter course for active growth-company presidents and CEOs.
He hasn’t given up entrepreneurship entirely. He does invest in, and help lead a number of high-tech ventures, including Actronics, a company near and dear to him as evidenced by the custom license plate ACTRON on his Lexus. Then there’s Omega Systems, Stuart Hospital Supply, Cerebellum Software and Mallett Technologies, to name a few.
He also offers management consulting to the select, since, as he puts it, “Unemployed executives don’t ever retire, they just become consultants.” Nonetheless, we’re talking about some serious consulting for those who really want him. At $5,000 a day, he says, companies are more apt to take his advice.
When he’s not teaching or consulting, you’ll more often than not find him sitting at Table 32 at his favorite lunch spot, Caf Sam on Baum Boulevard, in Shadyside. Across from him, you’re liable to find almost anyone sitting there, from a budding entrepreneur or student with lots of questions to a fellow investor contemplating the next Microsoft, or even the president of CMU, who wonders why he keeps hearing of Roseman everywhere he goes.
There, Roseman gives freely and with enthusiasm, perhaps giving the most meaning to his last 27 years.
SBN recently caught up with Roseman at that very table. He reminisced about his entrepreneurial glory days, how times have changed, what to expect as an entrepreneur today and, just as important, why more people should be giving back to the community that helped them succeed. Here’s what he had to say:
SBN: Describe entrepreneurship today.
Roseman: In the old days, I used to give my hand, and that was my bond. Well, the venture capitalists have become extremely greedy.
But don’t blame the VCs the entrepreneurs are extremely greedy. And don’t blame the entrepreneurs. Now it’s the technical people. In the Silicon Valley, if the stock takes a dip, those guys are going to go across the street where the stock is going up.
It isn’t now a mission about what we’re doing, the love of what we’re doing, what is it that we’re doing. It’s, “How do I make a buck? And right now I’m only worth millions. How do I become a billionaire?”
Is that what’s wrong with entrepreneurship today?
I think it’s the one spot. You know, it’s hard not to be greedy if you’re involved in the Internet business. Look at today’s paper and FreeMarkets, for example. They’re going to have a valuation bigger than GM’s. And that hasn’t even opened. The stock isn’t even traded yet. So it could be worth twice that, who knows.
Look at Yahoo!; that’s worth more than GM today. It’s worth more than all of these major corporations now. And most of these Internet companies haven’t shown a darn profit.
So it’s a completely different way of evaluating value, and a lot of people a lot of VCs and a lot of entrepreneurs have made billions of dollars. I read a speech the other day by a guy who was talking to entrepreneurs in the Silicon Valley. He says that if you have a good idea, assume money is free. Why? They’ve made so many billions of dollars that it’s Monopoly money. What we’re playing now is with Monopoly money.
That’s a whole world unto itself, and I’m not sure that in terms of personal life, it can screw up people’s heads. A lot of these kids who are doing this are very young, in their 20s.
When you’re in your mid-20s, the chances of making a hundred million or a billion dollars that can screw up your head. And when you make it, unless you’ve got two feet on the ground, your head’s screwed up. What does money mean to you? That is a concern.
Do you think this whole high-valuation atmosphere can continue in the long term?
I used to make the point that, if you’re looking for money, you have to show positive cash flow, preferably in two years but certainly no more than three years, or who would invest in you? There was one exception in the past, and that was biotech companies that needed billions of dollars. That was a farce. But now, you have another big exception, and that’s the Internet.
You don’t have to show profits anymore, not with the Internet companies. But one day, what you have to see is return on investment. That concept has never disappeared. What the hope is today and I say instead of price to earnings, I say price to hope is that, based on the number of clicks, on the number of people looking at your Web site, one day, investors and stockholders are going to say, “Wait a minute. I’ve given you enough time. Now make my tummy feel good that there is a return on investment.” And if there isn’t, you’re going to find a lot of these companies go by the wayside. There’s no question.
For technical people, this is a gold rush. And so what you have to come up with today is a hell of a good idea to put on the Internet, and you won’t have a problem getting money. None.
How do you feel about the prospects for Pittsburgh’s entrepreneurial community?
I really have never been more optimistic about Pittsburgh than I am at the moment, and I’ll tell you why. I get more calls to work with people on starting companies than I’ve ever gotten before. I always got a lot of calls, but now it’s more than I can handle. That’s one.
Two, there are more venture capital funds today in Pittsburgh I would say double than there were just a couple of years ago.
Three is government. I have high hopes for this guy Roddey. The reason I have high hopes is I’m taking his word that he’s not a politician, that he’s here to do something to get this thing moving. And I’m assuming he’s smart enough to know that it’s not just Allegheny County, but it’s Western Pennsylvania, and he has to work with the other counties also. And he’s bringing in the Democrats and minorities.
What does it take for entrepreneurs to get good people today?
It has always been my philosophy that money is just a trinket. If you’re an entrepreneur, if you really have your eye on the donut and not on the hole of the donut, if you’re really high on some of these things ... people don’t become extremely rich with salaries and bonuses. They become extremely rich because of stock.
So today, everybody’s taking Economics 101, and they’re talking about how many options they get if they’re going to join you. They take it for granted that you’re going to pay them a competitive salary. But what do they get? Look at FreeMarkets again. The families of the employees couldn’t get enough stock. That’s how much demand there was for the stock.
But I still believe that people don’t work for money. There’s something within the nature of man, the spirit of man, that says we need a vision. We need something more, something we’re willing to give our lives to, and it can’t be just money. Money can be a byproduct, a scorecard. But to say that we’re working just for money somehow doesn’t feed or nurture our souls.
We need something bigger and better. We need a dream. Those entrepreneurs who create that dream can afford to pay a hell of a lot less and can give less stock options. I’m not saying that’s what you should do.
The important thing is to understand that people work for dreams. People work for recognition. People work to get a pat on the back. We don’t give “atta-boys” to enough people. More people give criticisms. It’s just the opposite. If you do the opposite, you really get the best out of people.
All of this is entrepreneurship. It’s really the golden rule. Treat your workers, your associates, your partners as you would want to be treated. I believe that God has kept me alive to give this message.
Define your view of the consummate entrepreneur.
A definition that I saw and happen to buy is that an entrepreneur is not an entrepreneur unless he has started at least three companies. In other words, the entrepreneurs I know and read about tend not to be good managers. They want to go from $0 to $30, $40 or $50 million, and start another company. That’s the fun. Speaking for myself, that’s my fun. Then once it gets too big, it takes away the game I want to play.
Look at entrepreneurship, the beauty behind it. Here’s the part that fascinates me. One day you have
an idea no money, no people, no resources, no manufacturing, no printing presses, nothing just an idea. Then one day you have printing presses, manufacturing, sales people, sales, business coming in.
How did this miracle of an idea come into existence? Twenty years ago, Allen and Gates had idea. Now these guys are the richest guys on Earth. How did that happen? All from an idea.
It’s the power of an idea and the transformation to new companies and new jobs and new moneys, all started because of someone’s idea.
Why do you get so excited about that whole notion?
I think it’s almost a miracle, next to life. You have an idea, maybe we ought to have a child. Then you have the miracle of birth. I think there’s a close analogy between the miracle of birth and the miracle of new companies, new entities, new economic things that bring new jobs, wealth and a new life because of an idea.
What kind of person does it take to get it from an idea to a successful company?
Aha! I have a corny saying: “Entrepreneurs are dreamers who do.” The issue is that you can have all kinds of ideas. But if you don’t act on them, they’re worthless, because nothing happens with them. Ideas are only good to the degree that you act. That’s one.
Two, true story years ago, I was in my recliner watching my granddaughter crawl. She crawled, then all of a sudden she stands up, takes a step and falls. And laughs. She takes another couple of crawls, stands up, tries to take a walk, falls down and laughs. And this goes on.
I’m thinking, boy, we could learn from kids. If she was afraid of failure, to fall on her ass, she to this day would not know how to walk. Not only that, she thought this whole thing of failure, this process, was fun. She laughed at her failure. She thought it was fun.
Most people are programmed by the time they’re adults that we don’t laugh at our failure. Sometimes we deny it. It’s OK to make mistakes. It’s alright. That’s what I try to teach my kids. It’s okay to make mistakes.
The Silicon Valley finds this out because if you have started a company and failed, it’s easier to get the second round of money than someone who’s never started a company. Now that’s a true story. So, two, it’s the acceptance of failure.
Also, what’s wrong with being second? Strive for first, but it’s a game.
Entrepreneurship, to me, in some sense is like making love hear me out. I still remember, even with how old I am. When I was young, the biggest charge for some was getting the girl in bed. Somehow the anticlimax was the climax. I believe entrepreneurs love the game of getting. It’s the fight, the struggle. It’s the mental game.
Why is it so important for successful entrepreneurs to mentor to others?
Your computer between your ears is the same as mine, so what is it that I can give you? I can give you the benefit of experience. I can give you the benefit of what I’ve seen.
What is the core that I really believe in? That is, from whence you make your money, you owe it. It’s only fair to return some things. I made my money in entrepreneurship. I owe it to society to give back.
When we cut down big trees, we plant seedlings. And so mentoring for me is the planting of seedlings, and I owe it. It has treated me very well, and I owe it. We all should give back and not just think about ourselves.
Why do you spend your time today reaching out to so many business people when you could be out making your next fortune?
Because I love it. I cannot explain why I should have lived another 26 years. Why should I be alive? The only way I can explain it is, I’m on a mission. My mission is to bring out the best in people, so when I die, God will say, “Good job,” not how much money I’ve got, just “Good job.”
Daniel Bates (email@example.com) is editor of SBN.
When the youthful founders of high-tech wonder FreeMarkets Inc. took their company public recently, the business community watched in awe as the day’s stock price skyrocketed to $280 a share. Rarely do you see such an opening. And in Pittsburgh, of all places.
But why is this so surprising to Pittsburghers? The fact that this could happen in a city which still fights its image as a smoggy steel town may prove nothing short of amazing to some, but not to the entrepreneurs, government leaders and civic leaders in this special feature.
While some business owners keep their heads down and work hard just to make a living, others like the 55 people we’re honoring in this issue are doing everything in their power to make sure the region prospers. These are the ones who give of their time and money to make sure people receive the entrepreneurial help that they need. These are the people who make sure the region becomes an attractive, nurturing place with a quality of life that makes aggressive entrepreneurs such as FreeMarkets’ Glen Meakem want to stay here instead of moving to the Silicon Valley.
These are the visionaries who see the Pittsburgh region for what it could be and not for what it was. Some have succeeded and are giving back. Others see themselves as missionaries who want this region to thrive. Whatever the case, these are Pittsburgh’s Pacesetters.
For every person listed, a dozen more labor behind the scenes to make sure entrepreneurs get the help they need. They are the unsung heroes in this quest to build and nurture a world-class region. We couldn’t possibly recognize them all, and we no doubt have missed even some higher-profile visionaries.
But our point is this: Great regions don’t just happen. Business and civic leaders have to work together, reaching far beyond the boundaries of their own companies or organizations to build and nurture the region. Our hats go off to these 55 and the countless others who put in the time and money necessary to make the region strong.
These are Pittsburgh’s Pacesetters.
Mulugetta Birru, executive director, Urban Redevelopment Authority of Pittsburgh
Behind many of the biggest economic development projects in Pittsburgh today is the Urban Redevelopment Authority of Pittsburgh, buying up land and buildings and working out funding deals to rehab old buildings, build new ones, and generally foster new growth in areas needing revitalization.
Leading many of those efforts is Mulugetta Birru, head of this 50-year-old government-funded economic development agency. This native Ethiopian businessman has been directing those aggressive efforts since 1992, when he took over the agency’s top post after a stint as head of a community development agency in Homewood-Brushton. Today, he oversees more than 100 employees and an administrative budget of more than $6.6 million.
Carol Brown, Pittsburgh Cultural Trust
No city can hope to be world class without a healthy core of performing arts, and no city can expect to become an arts center without a solid financial base. Few understand that better than Carol Brown, president of the Pittsburgh Cultural Trust since 1986. (See related feature at the beginning of this month’s Managing Your Business section.)
Brown has combined a sharp business sense and a passion for the arts to help shape the revamping of the Cultural District and restore and preserve historical sites. The feathers in the trust’s cap are the O’Reilly Theater, the new home for the Pittsburgh Public Theater, Benedum Center and the Harris Theater, to name just a few.
Tony Bucci, Marc Advertising
While other agencies have faltered, merged with small local competitors or been acquired by out-of-town shops, Tony Bucci has built MARC Advertising into an ad house that boasts more than $500 million in billings, the biggest in town. Recognizing that trying to grow MARC simply by adding local accounts was unrealistic, Bucci has led the agency on an aggressive track of acquiring agencies outside of Pittsburgh.
In recent years, MARC has landed agencies in New York, Chicago and Dallas, and plans to establish a presence in virtually every major U.S. market. While ad accounts migrate to agencies outside the city, MARC brings in dollars from outside the region and keeps some large clients, like Mellon Bank, in the hands of a local creative shop.
William Byham, president and CEO, Development Dimensions International
Running a successful business means managing money, processes and people. With a shrinking pool of qualified workers expected for the foreseeable future, companies will need better strategies to attract, hire and retain the best employees. William Byham, president and CEO of the company that he and Douglas Bray started in 1970, has written the book, literally, on the people part. “Zapp! The Lightning of Empowerment,” has been a perennial business bestseller since it was published in 1988, as has “HeroZ Empower Yourself, Your Co-Workers, and Your Company.”
Byham has done all of this while building DDI into an international human resources, training and consulting firm that has brought international attention to Pittsburgh. He topped that off by becoming a key benefactor in the effort to bring back to life the old vaudeville theatre in Pittsburgh’s Cultural District which, after millions of dollars in renovations, is called, appropriately, the Byham Theatre.
Glen Chatfield, veteran high-tech entrepreneur
These days, Glen Chatfield stays out of the limelight, quietly investing in companies, developing new technologies and indulging his desire to commercialize a new two-cycle engine for motorcycles. But you can’t ignore his impact on the region as a high-tech entrepreneurial pioneer. He and his partners built up Duquesne Systems in the 1970s, making millionaires of a large handful of employees and creating the large Legent Corp.
His legacy isn’t the company that still exists in some form, but rather the many entrepreneurs he spawned and nurtured who are becoming part of the growth engine. He was an entrepreneurial pioneer, shadowed only by the success of Fore Systems and, now, FreeMarkets Inc.
Mark Coticchia, director of technology transfer, Carnegie Mellon University
Keeping high-tech start-ups in Pittsburgh has been a concern, but coming up with ideas to spawn them hasn’t been. Computer science powerhouse Carnegie Mellon University has long been coming up with dazzling technology, but not until relatively recently has it been active in turning those ideas into businesses.
Since 1993, Mark Coticchia has been leading the charge to turn digits into dollars, helping aspiring entrepreneurs with everything from writing business plans to finding capital and hiring talent. Highlights of Coticchia’s tenure at CMU have been leading Lycos Inc., WiseWire Inc. and Islip Media, now MediaSite Inc., out of the university and into the marketplace.
Illana Diamond, president, Sima Product Corp.
Illana Diamond has been a somewhat reluctant, yet successful, entrepreneur. She had a promising career under way at accounting firm Price Waterhouse when she left to take over the reins of her late father’s company, Sima Product Corp. After three years of serving on the board and trying to move the company forward with little success, Diamond took over and moved Sima Products to Pittsburgh from Chicago in 1993.
Under her leadership, the Oakmont company has expanded its line of consumer electronics products, reduced its operating costs and joined the Pittsburgh Digital Greenhouse initiative. An avid booster of entrepreneurship, particularly among women, Diamond is one of the founders of PowerLink, an organization of business leaders who lend their expertise as board members to women-owned businesses.
Linda Dickerson, principal, Dickerson & Mangus
For nearly 15 years, Linda Dickerson monitored and documented the region’s business ups and downs in the pages of her business magazine, Executive Report. In late 1998, she donated the publication to the Pittsburgh Regional Alliance and the Greater Pittsburgh Chamber of Commerce, which turned it into Pittsburgh Prospects. Still, the contacts she established and her leadership in the business community are what mattered most to her and what she carries on today.
She serves actively on the boards of a host of economic development, cultural and nonprofit organizations, “just trying to make a difference.” She continues to voice her perspective on the region’s business health in her weekly column in the business pages of the Sunday Pittsburgh Post Gazette. In her spare time, she works with public relations industry veteran Pat Mangus representing cultural and economic development organizations in the region and beyond.
Ann Dugan, director, Institute for Entrepreneurial Excellence at the University of Pittsburgh
Like her counterparts at Duquesne University, St. Vincent College and Clarion University, among others, Ann Dugan has helped transform what began as a small government-funded program to help small businesses into a powerful catalyst for economic growth in the region. She is head of the newly formed Institute for Entrepreneurial Excellence, which not only includes the Small Business Development Center at the University of Pittsburgh, but also an Entrepreneurial Fellows program and a membership-driven Family Enterprise Center.
All three programs, which she runs out of Pitt’s Katz Graduate School of Business, are designed to provide hands-on entrepreneurial education for business owners who are striving for aggressive growth but don’t have the luxury of taking time off to go to graduate school.
Arguably the most visible African-American entrepreneur in Pittsburgh, Eddie Edwards is a hard-driving advocate nationally for minority ownership of broadcasting companies. Edwards, who became owner of then-WPTT-TV in 1991 in a complex and sometimes controversial deal, has agreed to sell his interest in the station, now WCWB-TV, as well as his stake in Glencairn Ltd., to Sinclair Broadcast Group.
He plans to devote time to developing a company to produce programming for TV stations, and to his Edwards Broadcasting, a company formed to acquire radio stations. Among his most notable contributions to the region’s growth is his weekly program, “Eddie’s Digest,” which typically features a panel of the region’s minority leaders who discuss a wide range of issues facing the region.
Rock Ferrone, president and CEO, Rock-Built Inc. and Rock-Port
Rock Ferrone and his ongoing inventiveness and entrepreneurial vision may have gone virtually unno
ticed in this region had it not been for the fact that he recently got tired of driving across the state to meet with customers and didn’t like to spend the time or money flying commercial airlines. Instead, he bought a small plane, earned his pilot’s license, and then bought himself a small public-use airport in West Deer to accommodate his flying.
But he couldn’t stop there. He wants to relocate his printing equipment manufacturing company there, next to the runway, and he figures other business owners would want to do the same. So he convinced local and state authorities to turn the airport and surrounding acreage into a tax-free Keystone Opportunity Zone for the next 11 years. Now the state is turning this 36-year-old entrepreneur into its poster boy for general aviation as a catalyst for growth in the state. Now he’s flying high.
Bill Flanagan, business reporter, KDKA-TV
When it comes to local business coverage on the tube, “Dollar Bill” Flanagan is the undisputed champ. Flanagan provides insightful, comprehensive treatment of the business issue of the day and what it means to Pittsburgh and features about economic development and snazzy new companies in a way that makes it simple to understand, even if you don’t have an MBA.
His Sunday morning program provides an interesting look at the local business scene, and his personal finance column in the Pittsburgh Post-Gazette offers basic but valuable tips for sound money management. Here’s hoping he has plenty of good news to report.
Tom Golonski, president and CEO, National City Bank of Pennsylvania
Cleveland-based National City Bank has established itself as the top SBA lender in Pennsylvania, no small feat for a bank that competes with Mellon and PNC, as well as with Philadelphia’s banks. National City attributes much of its success in helping to grow the region’s business economy to the high level of local control it allows its Pittsburgh operations.
With Tom Golonski at the helm as president and CEO, there is little doubt that having a local banker with solid experience in the region’s banking market has been a strong card. National City plays to its strengths a large network of branch offices and a strong commercial loan portfolio, even though it has pared back its staff since acquiring Integra in 1995.
Doug Goodall, president, Innovation Works
When the Ben Franklin Technology Center of Western Pennsylvania was beset by scandal last year, no one thought it would be easy to polish the reputation of the entrepreneurial funding assistance organization. Doug Goodall, who took the job as interim director and was later appointed permanently, has led the organization under a new name, Innovation Works, and helped put in place a new management team.
The messy scandal that plagued Ben Franklin beginning in the summer of 1998 had been cleaned up by the following spring, and by last October, Innovation Works was able to begin doing what it was designed to do: Invest in promising technology ventures and nurture them to success.
Henry Hillman, one of the richest men in the United States, has always shunned the spotlight, satisfied to let his politically powerful wife, Elsie, take the lead in Republican politics both locally and nationally. For years, this low-profile financier has invested in a host of companies and real estate.
Lately, though, while evolving into something considerably less than a publicity hound, Hillman’s name has become associated with higher profile philanthropic projects, most notably the Hillman Cancer Center at the University of Pittsburgh Medical Center. The new center undoubtedly will bring more attention to the region’s world-class medical research efforts, giving the area a boost as well.
Cindy Iannarelli, Ph.D., president, Business Cents
If one of the region’s greatest challenges is to keep young entrepreneurs here, perhaps one of the best early-stage solutions is to teach the youngest of kids about the value of entrepreneurship and why Pittsburgh is a great place to be an entrepreneur. That’s what entrepreneur and family business consultant Cindy Iannarelli provides through her extensive educational program for kids, called Business Cents.
Dr. Cindy, as she is known, has found a way to make entrepreneurial education elementary and fun for the youngest of kids through her business camps, games, books and other related materials. She is working on a television series that would take her educational concept national giving the region still more recognition. She continues to counsel family business owners, largely through Indiana University of Pennsylvania, on working together, succession and related issues.
Peter Johnson, president and CEO, TissueInformatics Inc.
Could there be a better business marriage in Pittsburgh than one that couples high-tech imaging with biotechnology? That’s what TissueInformatics, founded in 1997, does. The company provides information and human tissue to tissue engineering firms and genomics and pharmaceutical firms, including data that can be transmitted to clients via the Internet.
President and CEO Peter Johnson is a physician and former president of the Pittsburgh Tissue Engineering Initiative, an effort to promote not just TissueInformatics, but also the birth of an industry in Southwestern Pennsylvania.
William Johnson, president and CEO, H.J. Heinz Co.
H.J. Heinz’s CEO, William Johnson, has taken on a lot when it comes to Pittsburgh’s economic growth since becoming chief at the food manufacturing giant in 1998. Heinz is bringing the top management of all of its U.S. operations here and has a new world headquarters in mind for its home city.
Last year, Heinz and long-time neighbor Pittsburgh Wool Co. settled their differences so that the ketchup king could go ahead with plans to build a distribution center on the North Side. Amid talk of mergers and consolidations in the food industry, Johnson is pursuing a sound strategy that usually works no matter what else happens: Maintain profitability and increase efficiency.
Al Jones, district director, U.S. Small Business Administration Pittsburgh District Office
Al Jones heads a U.S. Small Business Administration office that is one of the most active and visible in the SBA system. His office administers a portfolio of 2,000 loans worth more than $177 million. He works closely with six small business development centers and coordinates nine chapters of the Service Corps of Retired Executives.
But his greatest achievement has been to improve the federal agency’s outreach, and communication between the SBA and the rest of the economic development community.
A professor at CMU, Donald Jones has been reaching out to entrepreneurs and future entrepreneurs via the Donald Jones Center For Entrepreneurship, a program he helped fund within CMU’s Graduate School of Industrial Administration. He was among the first to see that the information superhighway was paved with gold.
One of his ventures, Automation News Network, later Nets Inc., looked like it was going to take off as an early e-commerce venture. A shortage of capital and a rocky partnership with a major investor and entrepreneur put the company belly-up and took Jones out of the driver’s seat, but he’s resurfaced in the investment community as chairman of Triangle Capital. Now a partner with start-up venture capital firm Lycos Ventures, Jones is poised to play a key role as promising but cash-hungry early-stage companies hunt for funding.
Mark Juliano, Mediasite
Mark Juliano, former vice president of marketing with the former Fore Systems, created a stir last year when he said he was planning to retire from his full-time job as head of Mediasite, the company that acquired Islip Media, the start-up he launched. While Juliano says he is heading into retirement and planning to kick back with his family and immerse himself in the arts for the near term, he’s staying close to the entrepreneurial community. He is active with a group of younger business leaders that wants to establish a kind of Duquesne Club for the less formal and faster-moving entrepreneurial set, and he is active in an advisory role with Mediasite. It’s hard to believe that the entrepreneurial bug or the allure of a challenging and financially rewarding offer won’t draw Juliano back into the arena, but stranger things have happened.
Mario Lemieux, president and owner, Pittsburgh Penguins
For years, this hockey icon has been an ambassador for Pittsburgh as he took his extraordinary skills on the road and helped lead the Pittsburgh Penguins to the coveted Stanley Cup win. Now retired, he continues to promote Pittsburgh as the principal owner of the local hockey franchise a team he is working hard to turn around financially.
His nationally recognized annual charity golf tournaments haven’t hurt the region’s image, either.
Kevin McClatchy, president and majority owner, Pittsburgh Pirates
When the Pittsburgh Pirates baseball club seemed to be working its way right out of Pittsburgh, a young Kevin McClatchy put together an investor group, with the blessing of local government, to save the team from leaving. He pulled it off admirably, incorporating an aggressive face-to-face marketing campaign that worked wonders in boosting attendance.
And just when he and everyone else thought he wouldn’t get the new stadium he wanted as a condition of keeping the team here, Plan B worked its way to the surface, and the result can be witnessed along Pittsburgh’s North Shore. The development’s snowball effect is expected to transform the North Side into a major shopping, eating and business destination. (See related article in this month’s Managing Your Business section.)
Joe McGrath, president, Greater Pittsburgh Convention & Visitors Bureau
A decade ago, people outside Pittsburgh and some inside laughed if you suggested the town could be a major tourist attraction. That was before Joe McGrath came to town. Since he took over as head of the Pittsburgh Convention & Visitors Bureau, Pittsburgh has become a tourism favorite, without a single first-day attraction like the Rock and Roll Hall of Fame, a Gateway Arch or a world-class convention facility.
Instead, the region relies on niche attractions, including the Andy Warhol Museum and a few larger venues, such as the Carnegie Science Center, to contribute to a whole made up of many parts. With an enlarged convention center on the horizon, the city could find itself closer to the top of the list as a tourist destination, and McGrath and his staff, we hope, will have their hands full.
Sean McDonald, chairman, Pittsburgh Technology Council
The notion of automating pharmacies was the brainchild of Sean McDonald, who came up with the idea as
a class project while a student at Carnegie Mellon University. McDonald refined the idea, and his company, Automated Healthcare, was acquired by McKesson Corp. in 1996. Now, as chairman of the Pittsburgh Technology Council, McDonald is directing his entrepreneurial energy and wisdom toward helping fledgling business builders transform their dreams into real enterprises.
Mary McKinney, PhD., director, Duquesne University Chrysler Corp. Small Business Development Center
Wherever anyone is educating small business owners, you can be sure you’ll find Mary McKinney among those leading the way in Southwestern Pennsylvania. Since 1986, she has been actively building the small government-funded program administered by Duquesne University to help small businesses into one of the region’s most ardent supporters of economic development. In the past two years,, she has stepped up those efforts to help not just the mom-and-pop businesses that are looking to get started or are in trouble. She and the SBDC at Duquesne are aggressively reaching out to any growth-oriented company in the region.
Last year, she picked up where the now-defunct Enterprise Corp. of Pittsburgh left off with its Entrepreneurs Day conference and launched her own Entrepreneurs Growth Conference, now in its second year. She continues to lead the Entrepreneurial Assistance Network, a state-mandated consortium of many of the region’s business assistance agencies whose goal is to improve service to the region’s businesses and, ultimately, economic growth. She does all of that and continues to teach business courses at Duquesne University.
Barbara McNees, executive director, Greater Pittsburgh Chamber of Commerce
Over the past few years, Barbara McNees has rebuilt and positioned the Greater Pittsburgh Chamber of Commerce as a leading resource for the Pittsburgh business community. She takes no back seat to anyone when it comes to her outreach to help companies. She has taken her place among the top economic development leaders, working under the auspices of the Pittsburgh Regional Alliance to become a one-stop shop for entrepreneurs looking to grow and for those thinking about relocating to the region.
Among her most impressive achievements of late is her leading role in the creation of the one-stop Business Resource Center, with a Web site designed to give entrepreneurs better access to a wide range of business assistance services.
Glen Meakem, chief executive officer, FreeMarkets Inc.
Freemarkets Inc. is an Internet company that sets up business-to-business auctions for purchasing supplies. It’s not the most glamorous of online enterprises, but it promises to be a $300 billion market by 2002. Despite its lack of glitz, FreeMarkets made a modest profit in 1998 and completed an IPO last month that fetched nearly five times the asking price, making Meakem and founding partner Sam Kinney very, very wealthy men and once again putting Pittsburgh on the high-tech map.
But the bottom line for Meakem is this: He didn’t have to locate his company in Pittsburgh, but he did, he says, because of the cost of living and quality of life. He has been vocal in expressing that view to people across the country in magazine articles about him and to many entrepreneurial audiences. Now he’s spreading the wealth throughout the region via the many employees who owned stock options prior to the IPO, which launched at $280 a share rather than the projected $48. He’s setting the pace, indeed.
Barbara Mistick, director, National Education Center for Women in Business at Seton Hill College
When it comes to helping women entrepreneurs, Barbara Mistick rises to the head of the class. She has built Seton Hill College’s National Education Center for Women in Business into a nationally recognized program that reaches countless women business owners.
Among the center’s programs: Three levels of educational programming for school-age women; administration of Powerlink Westmoreland which helps women through the use of peer advisory panels; an annual conference for women entrepreneurs; an awards program for Westmoreland County’s women entrepreneurs; and, most recently, an interactive Web site and online community for assisting women, called e-magnify.com. She leads the way for them all.
Tom Murphy, mayor, City of Pittsburgh
Tom Murphy puts up with his share of political grief when it comes to building downtown, building new stadiums and changing taxes. But by and large, he has helped lead the city into a new renaissance that is finally convincing people to move their residences to downtown Pittsburgh.
One doesn’t have to look much beyond Washington’s Landing, the Pittsburgh Technology Center, the North Shore and the Fifth and Forbes avenue corridors to witness the success of his leadership. No doubt that for him, it makes the rest of the political grief easier to put up with.
John Murray, Duquesne University
A big first step in bringing regionalism to reality was the movement to reform Allegheny County’s antiquated government structure and replace it with a more representative and, if it works as expected, a more effective and efficient one. At the leading edge of that effort has been John Murray, president of Duquesne University.
Murray chaired COMPAC 2000, the group that put together the proposal for the new county government that went into effect this year. And he has been anything but timid when it comes to the institutions he represents. The university considered a merger with Point Park College in 1996 and the establishment of the first new medical school in the United States in 20 years. Both ideas ultimately were abandoned, but it demonstrates that with Murray at its head, Duquesne is not afraid to consider the bold move.
Tom Murrin, dean of the Duquesne University A.J. Palumbo School of Business
After spending 36 years in corporate America with Westinghouse Electric Corp., and as Deputy Secretary of the U.S. Department of Commerce, Tom Murrin put his practical business knowledge to work in academia, bringing real-world sensibilities about commerce to the ivory tower. A leading expert on global competitiveness and total quality management, Murrin chaired the state’s Tech 21 initiative and is an avid cheerleader for entrepreneurship in the region.
Now, the Duquesne University Chrysler Corp. Small Business Development Center has been moved to his oversight, and already he has given SBDC director Mary McKinney the support she needed to step up the center’s efforts to help growing companies with everything from business planning to finding funding and improving cash flow.
William Newlin, president and CEO, Buchanan Ingersoll P.C.
You could say William Newlin has come a long way since he joined Pittsburgh law firm Buchanan Ingersoll P.C. in 1965. But while his leadership as CEO since 1980 has made the firm one of the region’s top firms, that’s not what makes him a pacesetter.
When he’s not working with the CEO Venture Fund to invest in the region’s top high-tech start-ups, he’s behind the scenes negotiating on behalf of the City of Pittsburgh to keep the Pittsburgh Pirates in Pittsburgh, or on some other economic development issue. Without question, he’s a driving force in the region’s economic growth efforts.
Paul O’Neill, chairman, Alcoa
Progressive and unpretentious, Paul O’Neill has displayed a calm but consistent voice in support of the revitalization of the region’s economy. While at the helm one of the world’s largest corporations, he has been dutifully active in ensuring that Alcoa is a responsible corporate citizen in Pittsburgh and that he takes a role in the revival.
The company’s new $67 million North Shore headquarters has received rave reviews for its architecture as well as for its utility and as a symbol of Alcoa’s commitment to the region. The company’s donation of its former home on Sixth Avenue to provide offices for local economic development groups has earned high praise and finally established a place where the region’s traditionally fragmented economic development organizations and agencies can come together under one roof.
Meanwhile, Alcoa has undertaken significant cost-control measures and made key acquisitions, including Alumax Inc. and Reynolds Aluminum last year, during O’Neill’s tenure.
Tim Parks, Pittsburgh Regional Alliance
Tim Parks and the PRA have taken their share of criticism, but hey, who said regionalism was going to be easy? Controversy over a pricey, quirky plan to market the region and difficulties in finding the money to fund it have been troublesome. Reports of bickering among the principals have surfaced.
To his credit, Parks, former president of the Pittsburgh High Technology Council, has kept the alliance together, despite the unavoidable struggles that arise when powerful groups with entrenched habits try to work together and venture onto each other’s turf. Regionalism was a tough child to conceive, and may prove an even greater challenge to rear. The PRA and its chief have their work cut out for them, but they’re making sizable strides to bring together the economic development community to collectively grow the region.
G. Richard Patton, president, Western Pennsylvania Adventure Capital Fund
Educator, investor and consultant G. Richard Patton heads the Western Pennsylvania Adventure Capital Fund, a public company that invests in the region’s high-potential, early stage companies. The WPACF’s relatively modest investments of $100,000 at most have the potential of pulling along additional investments of four or five times that amount, often from shareholders in the fund who have the benefit of a highly selective screening process to identify the best bets. With venture capital groups from outside the region zeroing in on Pittsburgh to find fast-growth opportunities, an investment by the Adventure Capital Fund could prove a huge boost for fledgling companies.
Chuck Queenan, chairman, Allegheny Conference on Community Development
At age 69, Chuck Queenan could be viewed as a member of the old guard when it comes to the region’s movers and shakers. He’s a senior counsel at law firm Kirkpatrick & Lockhart and a board member of several staid local corporations. But Queenan is also on the board of the Pittsburgh Regional Alliance and chairman of Carnegie Mellon’s board of trustees.
Now, he is heading an organization that was traditionally accustomed to interacting with the Fortune 500 companies which, in large measure, have left the city and are being replaced by smaller, fast-moving technology businesses that will play a defining role in shaping the future of the region. Queenan’s challenge will be to lead the Allegheny Conference into the future, and not allow it to become a relic of the past. He’s off to a good start after kicking off his tenure with a party for many of the region’s hippest high-tech entrepreneurs at a local after-hours hot spot. He may
have the right idea.
Frank Brooks Robinson Sr., head of the Regional Industrial Development Corp. of Southwestern Pennsylvania
Some may view Frank Brooks Robinson Sr. as a bare-knuckled maverick in Pittsburgh’s economic development community, but the fact is, he and the RIDC are what help drive much of the region’s high-tech community in particular, among other business sectors.
Its industrial parks in O’Hara Township, Marshall Township, the airport corridor and other outlying counties are home to some of the region’s most successful entrepreneurial ventures. Today, he leads the nonprofit RIDC in its efforts to secure new land, buildings and financing for companies in an effort to attract new firms and retain existing ones.
Jim Roddey, new Allegheny County Executive
Much can be said for the active business man and long-time regional advocate who helped bring the home-rule charter into this region and, ultimately, turned the county’s old-guard Democratic political machine on its head.
He has given much of himself over the years, and now has the opportunity to give his all as he applies his successful business acumen to running local government in a way that will encourage growth and prosperity in the entire region.
Jeffrey Romoff, president, University of Pittsburgh Medical Center
The consolidation of the health care delivery system in Pittsburgh has been driven by two major institutions: UPMC and Allegheny Health, Education and Research Foundation, the parent of Allegheny General Hospital. Jeffrey Romoff has been at the helm of UPMC since the merger mania began. UPMC quickly pulled out well ahead of AHERF, which fell into financial trouble and left Allegheny General to be scooped up by West Penn Hospital.
A powerful network of hospitals with a world-class medical institution, ranked 12th in the nation by U.S. News and World Report, at its center, UPMC looks like the odds-on favorite to dominate the health care scene and remain a major employer for years to come.
Dan Rooney, president, the Pittsburgh Steelers
Even now, no one really questions the importance of the Pittsburgh Steelers to the image of Pittsburgh as a progressive, shining city with an exceptional quality of life which includes professional sports, of course. Dan Rooney so far has effectively carried the torch that was passed to him by his father, the legendary Art Rooney Sr.
While Rooney did his own bidding when it came to his perceived need for a new football stadium, he and the rest of the Rooney family have been ardent supporters and financial backers of dramatic revitalization on the North Side and throughout the region. You only need to look as far as places like St. Louis, Houston and even Cleveland to see what happens when a football team’s owner pulls his support from a region. Enough said.
Jack Roseman, adjunct professor, Carnegie Mellon University’s Donald Jones Center for Entrepreneurship
Entrepreneur, investor, teacher, mentor. What more can you say about a man who is what we would call the quintessential pacesetter, a man who has given his heart and soul to advancing entrepreneurship in the Pittsburgh region? (See this month’s One On One feature for an in-depth interview with him.) Enough said.
Marcus Ruscitto, president, Stargate Industries
Marcus Ruscitto launched Stargate Industries from his bedroom in 1994 with the help of his technical whiz of a younger brother, Michael, then just 15 years old and frustrated by sluggish Internet connections. Since those modest beginnings, Stargate has grown into the largest Internet service provider in Western Pennsylvania, largely on the strength of its 1998 acquisition of USA OnRamp and, more recently, several other smaller providers.
With more than 175 employees, a young management team and a projected growth of 6 percent a month, Stargate is shooting for an IPO within the next two years. In the meantime, you’ll often find Ruscitto sharing his entrepreneurial experience the good and the bad with others at a variety of entrepreneurial events.
Jim Scahill, Armstrong County commissioner
Like a lot of politicians and public officials in counties outside Allegheny, Jim Scahill was wary of regionalism turning into colonialism, with the biggest and strongest county in Southwestern Pennsylvania exploiting its junior partners. The Regional Renaissance Initiative did little to placate those outside Allegheny County. But Scahill realizes that the future of his constituents relies to no small degree on the fortunes of Allegheny County and the ability of the region’s civic leaders to bend the ears of state and federal officials.
That can’t be done if the counties spend their time squabbling instead of lobbying, so Scahill has put himself at the head of the crusade for regionalism. His choice could be politically risky, but he seems to have an enlightened, big-picture view of things that he’s not about to compromise on.
Richard Mellon Scaife, Tribune-Review Publishing Co.
In a world of one-paper towns, Richard Mellon Scaife is determined to make sure Pittsburgh has two dailies. He does his best to stay out of the news, but he’s been adamant about staying in the news business. After an unsuccessful bid to buy the Pittsburgh Press in the early 1990s, when that paper was plagued by a strike, Scaife invested millions of dollars to build his Pittsburgh Tribune-Review into a worthy competitor to the surviving Pittsburgh Post-Gazette.
The company built a modern printing plant in the North Hills, bolstered its staff, and along the way, acquired several small dailies in the region to boost its presence. All the while, Scaife continues to fund conservative think tanks locally and nationally that study economic issues and their potential impacts and help influence governmental policy decisions.
Rick Sebak, documentary filmmaker, WQED-Pittsburgh
OK, so Rick Sebak isn’t exactly an entrepreneur or economic development leader. But he arguably could be one of the region’s greatest influences locally and abroad. Every year, he creates more quirky documentaries showcasing the sometimes-forgotten charms of Pittsburgh, such as the taken-for-granted nuances of the Strip District in “The Strip Show,” “North Side Story,” “South Side” and “Downtown Pittsburgh.”
He is perhaps best known for his series, “Things That Aren’t There Anymore,” followed by his sequel series, “Things That Are Still Here.” Such works have shown the rest of the country Pittsburgh’s brighter side, but more important, they have helped remind Pittsburghers themselves of what we have and should appreciate and why we should stay.
Cliff Shannon, SMC Business Councils
When the leadership of SMC Business Councils was passed to Cliff Shannon from lionized, long-time small business advocate Leo McDonough, the new president had some large shoes to fill. Shannon has put his mark on the organization by helping shepherd members through the vagaries of late-century challenges to business, such as energy deregulation.
He has led an effort to bolster the image of the organization by, among other things, highlighting the combined efforts of small businesses in stimulating the economy in a study that looks at investments by growing companies. And he has led his share of delegations to Harrisburg and Washington, D.C., to voice concerns about laws affecting business. He has become a master small business advocate.
David Shapira, chairman, Pittsburgh Regional Alliance, and president and CEO, Giant Eagle Corp.
If the Pittsburgh Regional Alliance is to fulfill its promise of making regionalization a reality that pays real benefits to Southwestern Pennsylvania, it’s going to have to make the five organizations under its banner march in lockstep.
David Shapira, a mover in Pittsburgh’s corporate community who took over the chairmanship of the PRA last year, will need to display the same kind of innovative thinking and marketing savvy that led his Giant Eagle supermarket chain to the top of the heap in its market. Consumers have bought his pitch for groceries, but will economic development types go for his vision of how to best work together? Only time will tell.
Richard Simmons, partner, Birchmere Investments
Richard Simmons, considered among the wealthiest Americans, is proof that heavy-industry bigwigs of prior decades don’t have to turn into today’s dinosaurs. He has made the transition from big-company capitalist to venture capitalist without losing a step.
Simmons led a group of investors in the purchase of then-Allegheny Ludlum Industries Inc. in 1980, and shepherded the company through several changes, including a merger with Teledyne Inc. in 1996. Last year, he revealed a plan to divide Allegheny Technologies into three companies. He’s played an active role in local economic development efforts, including a stint as chairman of the Allegheny Conference on Community Development. Simmons plans to retire in May, which will presumably allow him more time to tend to his venture capital fund, Birchmere Investments. The fund has invested in several promising companies, including FreeMarkets Inc., the Pittsburgh Internet company that completed a hugely successful IPO last December.
William Strickland, president, Manchester Craftsmen’s Guild
When William Strickland established the Manchester Craftsmen’s Guild, he envisioned a program that would use art to keep troubled youth off the streets. The initiative, which has grown to include training programs for a host of professions, including food service and horticulture, has become a nationally recognized and modeled program for training youth and other unemployed people for meaningful and often good-paying jobs.
This visionary potter offers what may be one of the most successful economic development programs in the region and beyond, yet many still don’t follow his lead when it comes to getting the unemployed back onto the tax roles. He’s one to emulate.
Gideon Toeplitz, executive director, The Pittsburgh Symphony
In an era in which sports teams are making demands on the region to ensure that Pittsburgh remains their hometown, the Pittsburgh Symphony Orchestra leaves town only to raise its prestige, both nationally and internationally, and the image of Pittsburgh. Gideon Toeplitz, the PSO’s executive director, is leading the symphony in bold directions, such as its establishment of Curtain Call, a retail store and coffee and pastry bar across from its Heinz Hall home which replaces a smaller retail operation within the concert hall.
And he’s helping the Pittsburgh Regional Alliance and others use the PSO to heavily promote the Pittsburgh region to the rest of the world. With an enlarged convention center and a brisk tourist trade promising more foot traffic in the Cultural District, not to mention the anticipation of a robust economy, the PSO could have its brightest days ahead, thanks to Toeplitz’s leadership.
John Turyan, executive director, Builders Guild
John Turyan, who has been working with the Builders Guild since its inception, has a full plate as the group’s first executive director. Touted by some as having the potential of becoming a national model for business-labor-government cooperation, the organization is incorporating this year to formalize the relationship between the building trade unions and construction industry groups.
The Builders Guild began as an initiative by building trades unions for revamping relationships between labor and management and bringing minorities into the organized labor pool. Now, the guild has the potential of changing the labor/management landscape in Pittsburgh for the better and helping the region shuck its reputation for troublesome labor problems.
Sunil Wadhwani, Mastech Systems Corp.
Sunil Wadhwani and Ashok Trivedi, his founding partner in Mastech Systems Corp., have come as close as anyone in duplicating the stellar success in high technology that the former Fore Systems achieved. The developer of custom software and information services started out modestly and built a blockbuster of a software consulting company. When they took it public in 1996, the venture made them both multimillionaires.
Partially as a give-back to the community, the company last fall established Mastech eVentures, a $50 million venture capital fund to help early-stage Web-based Western Pennsylvania start-ups and make investments in promising technology firms outside the region. That’s some hard-working money.
Dennis Yablonsky, president, Pittsburgh Digital Greenhouse
For years, Dennis Yablonsky not only ran Carnegie Group Inc., which ultimately went public under his watch, he also put in considerable time as a vocal advocate of high technology in the region. Most of his effort was directed toward the Pittsburgh Technology Council, of which he has always been an active member.
But now he’s making perhaps his greatest potential impact. He’s leading the much-talked-about Pittsburgh Digital Greenhouse, which brings together large international high-tech companies and a host of local forces to create an entirely new industry around a new-generation computer chip. (See related feature on page 46.) If successful, this initiative will cap the region’s efforts to become a high-tech force to be reckoned with.
Art Ziegler, president, Pittsburgh History and Landmarks Foundation
When the city came up with its proposal to revamp the Forbes-Fifth corridor into a modern retail district, the Pittsburgh History and Landmarks Foundation raised a fuss. But instead of trying to block the development, the foundation offered a plan that would preserve the district’s historical integrity while encouraging development that would spruce up the shopping area’s countenance and raise its quality.
Art Ziegler, president of that foundation, clearly recognizes the importance of preserving Pittsburgh’s history and its many old buildings in establishing an attractive, trendy and prosperous future. The challenge for the History and Landmarks Foundation will be to stand up for preservation of historical sites while not appearing to be obstructionist. If it comes up with viable alternatives, it will be able to retain its dignity and the city’s historic buildings.
A Lee Shull, Jr., knew it was coming. As vice president of investor relations with Rockwell Corp., he had dodged two out-of-state moves as the company gradually pulled its business out of Pittsburgh for other parts of the country.
He knew his function was next, and in early 1998, the company decided to move the investor relations department to California.
Shull knew he would stay in Pittsburgh, perhaps picking up another investor relations executive position, one with the same glitz and perks that Rockwell was known for. As he says, “My life was built around my relationship with my family and friends, so why would I have moved? For money and power, which is nice, but do I want to risk emotionally scarring my children?”
What this high-flying corporate executive didn’t know or even contemplate was that he would find himself, in a sense, back in the accounting arena he had consciously turned away from years before, and with a bug that he previously had avoided like the plague: the entrepreneurial bug.
Shull had spent the last 17 years living the corporate life at Rockwell and enjoying it. Now he was left with what he describes as a healthy severance package, a desire to take a break, “and 10 years worth of honey-dos” from his wife.
By the time he completed his self-imposed sabbatical, however, a group of entrepreneurs from California had talked him into giving up his investor relations dreams and becoming both a shareholder and a leader in growing a start-up division of accounting giant Deloitte & Touche.
The goal was clear and simple: Designated shareholders would pool their money to buy the division, called Resources Connection, from Deloitte & Touche, and spin it off into a new, privately owned company.
Shull’s role, should he accept it, was to become an entrepreneur, invest in the company and launch operation in Pittsburgh. Not exactly the career path Shull, now 47, planned to take, he acknowledges, and he definitely didn’t plan to go back into the accounting business, where he’d started his career in 1975.
As he notes, “It would be a tremendous step backwards in pay.” Still, he took the entrepreneurial leap and bought in.
“I always wanted to be my own boss and have control of my own work life,” Shull says.
The young firm, with headquarters in Santa Ana, Calif., bills itself as an “alternative professional services” firm, says Stephen Giusto, executive vice president of corporate development and CFO of Resources Connection. “Alternative” refers to the employees, all accounting professionals with an average of 17 years experience, at least in the Pittsburgh office.
But instead of doing accounting work for one company full time, or even for an accounting firm, employees are contracted out on a project basis to clients. Employees can choose the number of hours they work and which projects they want, and they get paid by the hour. When they don’t work, they don’t get paid.
“It’s for people who want to take more control of their work lives,” Shull says. “We offer work-life balance and flexibility.”
In Pittsburgh, Shull has about 30 people on the payroll. He says 77 percent are CPAs, almost half have MBA degrees and 70 percent have public accounting experience. Companywide, the firm employs upwards of 1,200 people in 31 offices.
Customers pay between $50 and $100 an hour to use the firm’s accounting professionals for special projects or even to serve as interim CFO or controller. Most assignments are temporary.
But don’t ever call Resources Connection a temporary agency.
“When I hear people call us a temp firm, it gives me the chills,” Shull says. “We are not a temp firm.”
The firm’s concept, he says, stems from a practice at most large accounting firms where they lend staff to a client for auditing, tax returns or system implementation, among other tasks. It’s a practice he says firms don’t mind during the slow seasons, but would rather not offer during the busy times, when they need all of their accounting professionals in-house.
Shull launched the Pittsburgh operation with the full support of Deloitte & Touche, including office space. That all changed last April, when the accounting firm quietly put together a deal with at least 35 directors of the Resources Connection practice, including Shull, and venture capital firm Evercore Capital Partners.
Shull won’t release specific figures, but says the directors were given the opportunity to buy in at $10 a share for common stock and $22 a share for convertible debentures, with a minimum investment of $10,000.
He says he invested substantially more than the minimum. The venture capital firm reportedly owns about 55 percent of the company, which was purchased for “tens of millions of dollars.”
Sales and marketing strategy
Until the spinoff last spring, the firm nationally relied largely on referrals from accounting professionals at Deloitte & Touche. But while both Shull and Giusto say the firms continues a healthy relationship, they acknowledge they are marketing to other firms with ongoing short-term staffing needs.
The sales and marketing strategy includes pre-screening cold calling, periodic mailers to at least 1,000 names rented from Dun & Bradstreet and lots of one-on-one networking, Shull says.
However, he doesn’t plan to do much advertising locally.
Sales to date
Shull won’t discuss specifics, but says his goal by May is to have 40 full-time-equivalent employees billing out 1,600 hours a week. He expects annual revenue this year to climb to $2 million.
The Pittsburgh operation broke even last September, he adds.
Shull is still working through the transition of breaking off from Deloitte & Touche and is in the process of securing office space outside the confines of Deloitte’s PPG Place offices. His challenge, he says, will be to maintain a good relationship with the firm and its employees while seeking work from other firms.
“Now there’s a mixed reaction” from Deloitte employees as a result of the quiet sale, Shull says. “Now I have to rebuild those relationships.”
Meanwhile, he has to overcome the notion of being another temp agency.
“We have to get past that temp agency mentality,” Shull says. “But the concept of bringing on an interim controller is not common here.”
How to reach: Lee Shull, Jr., (412) 338-7295 or firstname.lastname@example.org
Daniel Bates (email@example.com) is editor of SBN.