Sevrain shared that wisdom and more at a recent MIT Enterprise Forum.
Morewood Molecular, a Pittsburgh company that is commercializing a biological testing technology for the pharmaceutical industry, faces the same quandaries regarding disclosure that other technology companies confront, especially those with a technology that has yet to be commercialized. Giving away too much steak with the sizzle when trying to get financing, secure a strategic or equity partner, or acquire key expertise could put your business in someone else's hands.
For a lot of high-tech companies, especially those in an early stage of development, their principal assets reside in their intellectual property, and protecting that property is critical to the company's future. However, several key activities involved in launching and growing a technology company endanger the secrecy of that asset.
Asking investors to consider putting investing in your venture requires you to disclose at least some details of how your technology works. And hiring employees, especially key personnel, requires the same kinds of revelations.
Sevrain says acquiring patents early in the process, securing nondisclosure agreements and retaining secrecy about your technology will go a long way toward keeping your secrets secret.
Other key suggestions:
* File patents early. The filing date is critical to defending a patent claim.
* If patents haven't been filed, Sevrain won't discuss the technology with anyone without a nondisclosure agreement and will make no public disclosures until patents have been filed.
* Nondisclosure agreements shouldn't be limited to outsiders and employees. Board members, consultants and advisers should also sign them.
* Venture capitalists will almost never sign a nondisclosure agreement. Some may even be snooping for details about competitors of companies in their own portfolios.
* Finally, Sevrain suggests that you keep your vanity in check: "Don't brag about your company." How to reach: Morewood Molecular, www.morewoodmolecular.com
"Could we make it 3?" he asks in a blink, negotiating for a little extra time to squeeze in a workout and get ready for a trip to Phoenix for a conference with his fellow sports agents. As it turns out, I'm a bit squeezed for time that afternoon, so the later meeting works for me, too.
The subtleties in the exchange might be lost in the narrative, but I'll assure you that at least some of Cindrich's skills as a negotiator came through loud and clear during that brief conversation.
There are lots of negotiating styles, and I'm sure you've encountered most of them. Before I met Cindrich, I figured he'd be a snarling dog in negotiations, given the high-stakes jousts he must engage in with team owners and their representatives. I pictured lots of red-faced confrontations, slamming of papers on desks and no shortage of tough language. I'm convinced now that I was dead wrong.
Instead, I'll bet he starts with evaluating the situation as it exists, making sure both parties agree where they stand, checking to see if there's some willingness to bend on the other side. If he senses there is, he suggests a move that might bring them closer, all the while making sure he shows consideration for his counterpart's situation.
Although he's no doubt determined to get the best for his client and not leave anything on the table that doesn't belong there, he knows it's a failing strategy to leave his adversary feeling beaten and humiliated because he'll likely have to face him again some day.
So I learned something from that experience about negotiating. Considering what's in the other guy's interest is just as important as whatever your own wants or needs might be.
Figuring out what things look like from the other side of the table can help you get what you're vying for, whether it's another hour or an extra million bucks.
Oreck Corp., best known for its vacuum cleaners and its founder-pitchman David Oreck, has built a strong brand in a consumer segment that has no shortage of well-recognized brands.
David Oreck was in town recently to talk about branding at the Institute for Entrepreneurial Excellence at Pitt's Katz Graduate School of Business. Oreck's company does business in a somewhat unusual way. It will sell you a vacuum cleaner or other appliance by mail, through its Web site or at one of its independent dealers, but you won't find its products at a Kmart or a WalMart or anywhere else, for that matter.
Oreck has shunned selling through the mass merchandisers that end up dictating terms because they wield so much power. They squeeze the manufacturers and shortchange the consumer on quality and choice, says Oreck.
Oreck is on to something, I believe. There will always be the consumer who is willing to spend more to get a better product, better service and perhaps some convenience.
Bob Plummer owns a company called Hours To You, a home delivery service based in New Castle that has the substantial portion of its operations in Allegheny County. Plummer was struggling a bit to get the business going, but it wasn't because of a lack of demand for the service. Once he identified who his target customer was through some sophisticated research tools, his client list and his sales soared.
With services like Hours To You, customers must pay a bit of a premium for the convenience of having groceries and other household products delivered to their doorstep. Nonetheless, Plummer has found that some are willing to pay for convenience, and a savings in their time and energy.
The big retailers aren't about to go out of business or quit squeezing every penny they can manage out of suppliers. But as companies like Oreck and Hours To You figure out ways to more economically deliver their products and services, narrow the price gap and build brand equity without sacrificing quality, they'll capitalize on their competitors' weaknesses.
And maybe clean up in the process.
South Side-based Rynn's Luggage Corp. operates retail stores and repair facilities in Pittsburgh, Baltimore and Dallas, and has contracts with the major airlines for repair and replacement of damaged luggage. The 75-employee company is also an authorized vendor for warranty work for luggage manufacturers.
D'Ottavio, vice president of Rynn's Luggage, figured a technology fix could streamline the customer service side of his business, allowing customers to track their orders electronically to find out when to expect repair work to be completed. Using a Web-based solution, he concluded, could provide 24/7 access for customers while reducing the call load to customer service reps and 800-line costs.
But D'Ottavio realized the Internet might provide additional opportunities for Rynn's Luggage. He wanted to expand its sales to consumers online, offer buying groups such as airlines discount prices for members or employees as a benefit, and operate a business-to-business site for the airlines to purchase replacement products.
And while he wanted to add distribution channels and smooth the customer service operation, he didn't want to add a lot of infrastructure to manage the process.
"What we were looking to do is take advantage of the technology on the Internet," says D'Ottavio.
Enter Blue Archer, a Shadyside company that builds customized Web-based solutions, mostly for manufacturing and distribution applications.
Robert Faletti, a principal in Blue Archer, says his company provided a consumer-accessible e-commerce site, a system that allows customers to track repair jobs, specialty portals for the airlines and employee and corporate buying groups, each with unique pricing, all with a central product database and controlled by one backend site manager at Rynn's.
None of the hardware or software is internal to Rynn's, and Web hosting is handled by a third party.
Airline customers, D'Ottavio figured, are fairly sophisticated as a group and not tech-shy, and the airlines themselves are comfortable using information technology. D'Ottavio, says Faletti, looked at a technology solution in the context of a true understanding of his business and his customers and how a solution could best be applied to his company's needs.
That's not always the case, Faletti has found.
Sept. 10, 2001, was Jon Delano's first day as KDKA-TV's money and politics editor. Easing into the job was not an option.
Delano was no novice; he's been a familiar face on the tube for some time as an analyst during election seasons. But this was his debut as a reporter, and the plan was to do some sample stories before rolling out reports for broadcast. His deep knowledge of government, public policy and politics, however, was too valuable not to be tapped during the days and weeks following Sept. 11.
"My whole career has been a series of unexpected developments," Delano says.
The turns for Delano have often been into the fast lane. He began his career as an associate with Reed Smith Shaw & McClay, now Reed Smith LLP. Doug Walgren, not long after he was elected to the U.S. House of Representatives in 1977 with help from Delano, invited him to breakfast at a Denny's restaurant, scratched out on a placemat a plan for organizing his office and asked Delano to help. Delano stayed in Washington for 14 years and served as Walgren's chief of staff until Rick Santorum beat Walgren in 1991.
In 1993, Delano himself waged an unsuccessful campaign to win a seat in Congress.
Delano's primary occupations these days are at KDKA and his duties as adjunct professor at Carnegie Mellon's Heinz School, but he still finds time to write columns, offer his expertise as a political analyst in newspapers and on TV and radio, and take his turn getting his kids off to school.
With all the high-profile activities he's been involved in, Delano rates as one of his proudest accomplishments a long but successful battle with the Pentagon while working for Walgren. Because of a technicality, two Pittsburgh-area Vietnam veterans' names had been left off the Vietnam War Memorial. Delano ultimately convinced officials to include the names, and you get the impression that the effort was more love than labor.
Says Delano: "I love going up against bureaucrats who say it can't be done."
"I can't describe what it feels like to sit and wait for a jury to read a verdict, kind of like watching that field goal going through the posts," McGinley says.
Little wonder that he uses a football analogy to describe it. Art Rooney, legendary founder of the Steelers, was his uncle, and McGinley's family still owns a share of the team.
McGinley's lived in Pittsburgh nearly all of his life, save four years as an undergraduate at St. Bonaventure University and a brief stint working at a Rooney family business near Philadelphia. He spent most of his law career at Grogan Graffam & McGinley, the firm he co-founded nearly 30 years ago.
In January, the 1961 Central Catholic grad accepted an offer to join Eckert Seamans Cherin & Mellott. It wasn't easy to leave his firm, he says.
"A lot of law firm splits are acrimonious," says McGinley. "Mine wasn't."
Rather, McGinley says, many of his old friends had left the firm. Fellow founding partner Steve Graffam had retired, and Frank Lucchino had gone to the bench. McGinley saw the opportunity to join Eckert Seamans, a national firm with more than 200 lawyers, as a way to expand his own practice and add the depth he needs to serve his clients, whose needs he says are growing increasingly complex.
McGinley is a casual golfer and fly fisherman, and confesses a passion for Irish poetry. The law, however, remains his first love.
"Deep down in my shoes, I remain the guy who likes to get up and say, 'May it please the court.'" How to reach: www.escm.com
The company, a Texas concern that handles reverse logistics for large mail order retailers, is interested in using Wein's Ross Township store as a drop-off point for customers who want to return merchandise to large catalog merchants. Wein says the company identified his store location as having sufficient customer traffic and visibility to serve as a receiving point.
Mailboxes Etc. offers a variety of services required for mailing and shipping, as well as related products and services.
Wein says his store is enjoying strong growth -- 2001 sales were up 7 percent over the previous year, and last year's December sales bested the December 2000 sales mark by 17 percent.
There's little wonder, then, that Wein is motivated and encouraged by the business and social trends that are making his industry successful and bode well for his prospects for growth.
But those weren't the incentives that drove Wein when he entered the business in 1987.
"I was motivated by fear," says Wein. "I just felt that I couldn't afford to fail."
Private businesses that offer the services that Mailboxes Etc. offers are no novelty today, but in 1987, Wein was entering a business that was in its early stages. His was just one of three in the Pittsburgh market at the time.
Mailboxes Etc. today has more than 4,500 locations, including 20 in Pittsburgh, and was ranked No. 2 on Entrepreneur magazine's Franchise 500 list in 2001. But when Wein launched his store, the company was No. 434 systemwide.
Perhaps most important to Wein, his father had provided personal guarantees for the loan taken to start the business.
Mailboxes Etc. was anything but a household name in 1987. Wein says customers often stopped in because they thought the store sold mailboxes. The company ultimately added a line of mailboxes to its inventory, but it was clear early on that the store's concept had yet to gain widespread recognition.
After several years of sluggish sales, even his wife doubted his prospects for making the business successful.
"My wife said to me, 'When are you going to stop playing store and get a real job?'" Wein says.
Still, he has managed to stay in business while others, including other Mailboxes Etc. and independent and franchise operators have closed their doors.
The invisible store
Wein started off in a less than desirable location and struggled for four years until he could negotiate with his landlord for a better spot in the center. He negotiated his first lease for a storeroom in the McKnight Siebert Shopping Center but soon found the location was anything but prime.
The view of the store was obscured by a service station sign, and it was difficult to see from the road. It was too small, and at the end of the strip, rather than at its busier entrance. He tried for six months to negotiate for a better spot in the same center, but the space he wanted went to another tenant.
But when a better space came available in the center four years after he opened his doors, Wein this time was able to move to the larger, more visible spot, closer to the heaviest foot and motor traffic.
Wein built awareness of his business every way he could think of. He walked up and down McKnight Road, talking with business owners and dropping off his business card and promotional flyers.
"I beat the streets a lot," Wein says.
He went to networking and local chamber of commerce events, and handed out coupons for the nearby McDonald's, while the fast food restaurant passed out Mailboxes Etc. coupons to its customers. He made certain that clerks at the U.S. Postal Service office on the next corner knew Mailboxes Etc. offered passport photos.
And while the West Penn AAA office across McKnight Road offered notary services for automobile-related work, it didn't provide them for other purposes. Wein asked the office to refer such work to him, while he referred his customers to the auto club office for notary services he couldn't provide.
But the grassroots marketing activity that might best demonstrate Wein's enthusiasm and commitment was the "Zippy" mailbox costume he donned on heavy traffic days to catch the attention of motorists as they drove past the McKnight Seibert Shopping Center.
To gain name recognition for Mailboxes Etc., Wein and several other owners formed an advertising cooperative to take advantage of a 50 percent match the franchiser offered for local advertising efforts.
Cash flow problems plagued Wein early on, as sales were weak but bills continued to roll in. He initially negotiated an arrangement with his lender that required interest-only payments on his loan.
When he found that cash was tight at the end of the year, he approached his banker to extend the interest-only payment for an additional year. At the end of the second year, with cash still scarce, Wein asked the banker once more to waive the principal for another year. The bank agreed.
Wein says consumers are getting used to alternatives to the traditional methods of sending packages and mail. Home-based businesses need specialized shipping services, and recent changes in air travel have prompted some travelers to consider other ways to ship goods.
"I've realized that people are shipping things that they can't travel with anymore," says Wein.
Recent drop-offs at his store include $35,000 worth of jewelry headed to a trade show and a cache of silver bullion. Online auction sites like eBay are also bringing traffic to his store, says Wein.
He's shipped fishing rods, antique dolls and even a hard top for a Mazda Miata.
Wein says luck has played a role in his success, too. The growth of home-based business, e-commerce and his decision to locate in the McKnight Road business corridor, he says, have all contributed to his success.
While his fear of failure motivated him to make his business successful, his lack of fear -- or his choice to ignore it in some instances -- may have been the difference between succeeding and failing. One of the most important lessons Wein says he's learned in business is to not be afraid to ask for something.
"When the worst that someone can say is, 'No,' you might as well ask the question." How to reach: Mailboxes Etc., www.mbe.com
In its investigations, CII collects information from numerous sources. Each client project creates a complex billing task, and clients often want access to the information CII collects as an investigation progresses.
Typically, several CII investigators collect data on an employee or applicant from multiple sources, and the data must be assembled into a single report. Initiating a particular element of a screening may be contingent on completion of another check, which can delay an investigation. In some cases, clients order services a la carte, which complicates the data collection and billing process.
CII thought it needed a technology solution to streamline its process. Improved technology was undoubtedly a critical component in solving the problem, but it took three tries to get it right.
The company had a DOS-based system that proved cumbersome, so it invited vendors to propose solutions. In one case, the company decided the vendor didn't understand its business and rejected its proposal. In another, the vendor had the project underway when CII chose to abandon it because it became clear the second vendor, too, lacked a true understanding of CII's business.
Enter Joseph Cherian, president and CEO of Turning Point Systems Inc., a South Side company. Cherian's company developed a system called CorpNet, an immediate interface between the client and CII that allows clients access during each phase of the screening process from the clients' offices.
It has simplified the billing process, allows clients to cut costs by doing some of the work themselves if they choose to do so, and produces reports that can help clients identify problems in their operations, such as turnover trends.
The solution, according to CII, has increased productivity by 50 percent.
Carmella Leonette, CII's director of operations, says Cherian's company not only understood the technology, but also had a clear appreciation for CII's business needs. Companies seeking a technology solution, it seems, need to do some careful investigation of their own.
"It is important to focus on companies with experience in business solutions and not merely technology vendors," says Leonette. "They must look for companies with a track record who can provide real examples of the solutions they have developed with tangible results." How to reach: Corporate Investigations Inc., www.ciilink.com; Turning Point Solutions Inc., www.turningpoint-sys.com
Coming out of insurance sales, Tillotson thought it only natural that investment advisers needed to know the full breadth of their clients' financial goals, responsibilities and assets before they could offer sound advice.
"How can you tell people what to do with their investments without knowing what their situation is?" says Tillotson.
Out of that conviction came a concept called Masterplan, a comprehensive plan for personal financial management. Masterplan has evolved and grown, but the premise that effective financial planning requires close long-term relationships with clients has remained.
Tillotson, now chairman of investment advisory firm Hefren-Tillotson, believes the emphasis on trusting relationships accounts in large measure for the quality of the company's employees and their high level of job satisfaction. That was demonstrated last year when the company was selected the best medium-sized company -- defined as those with 50 to 250 employees -- to work for by the 100 Best Places to Work in Pennsylvania award program.
The program, sponsored by public and private entities, includes a survey of each participating company's employees. Those results comprise 75 percent of a company's score, so employee attitudes and opinions weigh heavily.
Kim Tillotson Fleming, the company's president, cites low turnover, teamwork and civic involvement as signs of job satisfaction at Hefren-Tillotson. The strong relationships advisers form with their clients, she says, translate into close bonds among employees.
"I think that carries right over to the company," says Tillotson Fleming.
While the nature of the work accounts for high levels of job and company satisfaction, there are other factors. The company pays an annual bonus in those years when profits warrant it. That may come as no surprise, but Tillotson notes that when the company couldn't pay bonuses last year, employees didn't grumble.
The company also offers a tuition plan for career-related education, stock options, generous compensation plans and opportunities for advancement.
But its selection process in choosing employees may be one of the most important reasons workers find the company a good long-term fit. Tillotson Fleming says that in an industry in which superstars often hop from one firm to another for a better deal, Hefren-Tillotson's ranks have remained remarkably stable.
Says Tillotson: "If you just want to buy and sell and play the game, we're not interested." How to reach: www.hefren.com