Our story begins simply: Its 1956 and Ralph Abdallah is the eldest child of a poor Lebanese family.
With limited food the last one to the table often left hungry and with little money, the young man is forced to make a difficult decision. Though he speaks little English, he leaves his parents and eight brothers and sisters to seek his fortune in America.
He makes his way to the New World, and after a series of struggles, births a series of successful delis and restaurants. In retrospect, you can almost see Horatio Alger smiling.
I was 21 years old. Abdallah explains. I looked around. I said to myself, Ive worked all my life. I dont have 10 cents in my pocket. I want to get married and have a family like my father. I just couldnt afford it. I could never ask a girl out.
But upon his arrival, the language barrier was just too tough for Abdallah to overcome. Unable to find a job, he entered the service. Again, his lack of English proficiency tossed up roadblocks, and he was discharged after only three months. He found himself in Canada, and studied the dictionary before finally returning to live with a cousin in Cleveland.
Armed with passable language skills, Abdallah set out to build his life and bring his remaining family over from the Middle East. But he faced another challenge: I couldnt find a job, he says.
So Abdallah opened a small combination grocery/deli across the street from Fenn College. Students came in looking for sandwiches, so he put cold cuts onto pita bread and soon learned the profit margin on the sandwiches was better than on the groceries.
With a little bit of money, and now a citizen of the United States, Abdallah brought his father to the U.S. from Lebanon in 1964. A year later, the rest of the family followed.
At this point, the scene begins to resemble that of our opening only this time in America. The complications resulting from being a family with limited English skills began to reappear. While the younger children attended school, it took a few years before they were fully integrated into society. As they learned, Abdallah hatched a plan.
Jeannette (the youngest sister) was about 10 years old, so I had to take her to school, says Abdallah. We were looking for something to do. So my mother said to me, Why dont you get them a little place and let them bus (tables) around some?
Ralph knew nothing about the restaurant business, other than what he had learned from his less-than-adequate experience with the pita sandwiches, but a friend convinced him to take a chance on a little place he heard about for sale on St. Clair Avenue called Larrys Ham and Eggs. The owner, Larry, was a crabby fellow who was ready to retire and willing to stay on for a couple of weeks to teach Ralph the business.
I learned the food business from Larry, Ralph says. Larry was with me for two weeks. It was in the contract to help me out. I was involved in so many things. So my brother would help me wash the dishes. My sisters were the waitresses.
We started so small we used to take $150 a day. That was a big business day.
Ralph changed the restaurants name to Slymans Restaurant, mainly because it catered to a largely Jewish clientele.
If I call it Abdallahs, who the hell is going to come to me? Ralph recalls with characteristic honesty.
Slyman was Ralphs grandfathers last name (Abdallah, the name the family adopted, was his first).
The practical approach was typical of his approach to business Ralph knew that many Jews might not patronize a restaurant serving Jewish fare if they believed it was owned by non-Jews.
Thus began the legacy. My sisters and my brothers started getting married and having their own families, he says. And they learned the business from that little place.
Ralph, who never really loved the restaurant business, returned to his store and turned the restaurant over to his brother, Joe. Today, delis that trace their lineage to Ralph Abdallah and Slymans are scattered across Northeast Ohio.
Little 10-year-old Jeannette Abdallah (now Jeannette Kanaan) and her husband are the owners of Joes Deli & Restaurant in Rocky River. Slymans is still in the family, along with Superior Restaurant, Johnnies Deli & Restaurant, Tonys Deli & Restaurant, Sammys Deli, Dannys Deli, Joes Deli (Lakewood), Tinas Deli & Restaurant and Neds. Jeannette estimates that combined, they serve between 2,000 and 3,000 pounds of corned beef each day.
Its well after breakfast time and more than an hour before the mad lunch rush. Hungry diners waiting for a table are assaulted by the scent of corned beef wafting heavily in the air. A nearby dessert case displays luscious-looking offerings that test the willpower of even the most devout dieter.
The scene is played out daily at Joes Deli. Owned by Joe and Jeannette Kanaan, the restaurant has amassed a dedicated following with a simple formula: Provide your clientele with a good product at a fair price in a clean environment.
A clean restaurant is vital, Jeannette says. The Kanaans spend $2,000 every month to keep it that way. Its one of the important lessons they learned from Ralph.
Another is to offer your customers quality. It may cost a bit more up front, but the payout comes in the long run. Ralph once tried a cheaper brand of coffee, but the experiment lasted just two days before he called the vendor and returned the inferior quality brew.
You can make profit on volume, Jeannette says. Its not on items. Most of the people tell you to go the other way. You might have to work a little harder.
But thats not how Joe and Jeannette started out. They owned a restaurant in the old Buckley Building, next door to the Allen Theater. Once, a close friend suggested they clean the windows. They complied, and the simple move helped double their business.
Like Ralph, however, owning a restaurant wasnt their first choice. Joe was a plumber by training, but couldnt find work. As for Jeannette, growing up and working in a restaurant left a sour taste in her mouth for the business.
I knew I had to marry Lebanese, she explains, I knew I didnt want to marry somebody with a restaurant. But here we are.
Not all the Abdallah children own delicatessens, and a few of the nine are owned by relatives or through marriage. The Kanaans, Georges and Abdallahs have mingled and married, but their businesses all evolved from Ralph Abdallah.
As each got started, the others helped any way they could either monetarily or by working in the restaurants. It was hard for a family member to walk in to one of the others restaurants without being put to work.
My sister Mary started wearing her mink here, Jeannette says. It wasnt even that cold out. A customer asked, Mary, why wear the mink? She goes, Thats the only way my sister wont put me to work. Every time I come, Im either making toast or cleaning tables.
Im so grateful, she continues. Family is so important.
This is our storys epilogue: Now 64 years old and retired, Ralph enjoys reflecting on the corned beef empire he created. The family is no longer poor and there is plenty of food plenty of excellent food to eat. Its an irony not lost on Ralph Abdallah.
I love it, he says. I really sit back and think, From that small place, look what we have here.
The appreciation Jeannette has for her older brother is clear.
Maybe we dont say it enough times, she begins. Were rea lly, really grateful. You took us from the gutter and brought us to heaven. Ralph has been a big, big influence in our lives. He taught us.
When we came here, we knew nothing. He taught us hard work and honesty and good character. He did a lot without, so we could have.
How to reach: Joes Deli & Restaurant, (440) 333-7890
Dan Jacobs (email@example.com) is senior editor at SBN magazine.
RegionalHUBsites.com, a developer of specialized Web-based search directories for niche industries, has launched a Web site for Ohio companies in the manufacturing industries. RegionalHUBsites.com is the first new-media company to focus on regional industrial.
The site, www.manufacturingOH.com, creates an online buyers community of more than 20,000 manufacturing firms and includes a free manufacturing classified ad section where manufacturers and purchasing agents may post manufacturing-related requests for proposals, job opportunities and equipment sales.
We believe that the two primary ways that potential clients can find manufacturers on the Web are through search engines and links. says Donald Ferris, founder of the RegionalHUBsites.com. Search engines are becoming more and more cluttered as thousands of businesses flood daily on to the Web. And lets face it not everyone is going to fit into the top 10 or 20 spots of a search engine response. What weve done is to build a user friendly, highly functional, target-specific, searchable directory.
Its well known that people like to do business regionally, if possible. Our sites are built upon that premise, he says. We believe that more and more, people are using the Web like a phone book. You have to be listed in the right directories in order for people to find you quickly.
We also know that search engines like hub sites, since they contain a large amount of links and allow users to locate the specific information they requested. We also believe that youll have better luck being spotted by a potential client if you are listed in a specially designed and heavily promoted directory.
How to reach: RegionalHUBsites.com, (508) 398-0411 or (877) HUB-SITES, or via e-mail at firstname.lastname@example.org
Allan Halcrow knows what does and does not work for companies that struggle with todays ever-thinning labor pool.
If youre taking a wait-and-see attitude, Halcrow offers mixed news. The problem isnt going to get any better, he says. But employers dont have to sit back defenseless.
Dealing with the changing face of Americas workers, Halcrow says, begins with transforming the way you look at the hiring process and how you view your company.
What do you see as the number one issue affecting business owners?
The labor shortage. (It) is driving everything right now. Forget about finding top quality people, which you really have to work to do, but even finding acceptable level employees just gets to be a bigger and bigger challenge everywhere.
What can companies do to help offset the problem?
The key is to step outside of this box weve all had ourselves locked into for such a long time. Which is, you run an ad, do an interview and hire a person for a specific job that has these finite responsibilities, these work hours at this place all the time. Instead, look at it in much more fluid ways.
Youre not hiring someone so much for a job as much as youre hiring them for projects or tasks that need to be done, and hiring people for sort of their overall outlook and values and skill set as much as specific experience.
For example, Sears was having a really hard time finding computer programmers in the Chicago area. They found this group of programmers in Idaho that had been recently downsized from some other organization, a group of 10 who had worked together for a long time and had a successful working relationship and a good team mentality.
But they didnt want to relocate to Chicago. Sears ended up hiring all 10 of them and setting them up in this telecommuting facility in Boise so they could stay in Idaho, yet get the work done.
How are business owners retaining employees once they have them on board?
In general, turnover is here to stay. Most employers cant afford to look at it as a short-term problem. I dont think it is associated with what people are calling Generation X, because it pretty much cuts across the whole spectrum of the work force.
A lot of it is our own fault. When I say our fault, I mean business in general for the downsizing that went on in the late 80s and into the mid-90s. Corporate America as a whole has sent the signal to people that you are responsible for your own career. Theres no such thing as a guaranteed job.
You have to keep your skills up and be ready to move if we decide were eliminating this department or this job or this function. Employees have bought into that much better than the employers themselves.
We did a survey of employees last year to get our hands around some of this stuff for our readers and ask why people choose to leave a job. What we found overwhelmingly is money doesnt really matter. Hardly anybody changes jobs for more money.
People change jobs when they perceive its in their best interest to somehow either sustain or advance their career. It happens with people who feel they have hit a certain plateau in the organization and there is nowhere to go. Theres no advancement opportunity, which doesnt necessarily mean advancement up into management, but at least advancement sideways into a new set of skills or work on a new business line or somehow get some additional experience that will be valuable in the future.
If employers can help in some way by providing ongoing training and setting up situations in which employees can keep their skills up and continue working with the latest equipment, they are much more likely to stay.
Do you think most employers are making the appropriate changes to deal with the shortage of workers?
Most employers think everything we are seeing right now in terms of the labor shortage is directly tied to the economy today, and that if the economy changed tomorrow, it would all go back to the way it used to be. Some of them are sort of waiting for that to happen if we can just wait this out, whether its two more weeks or six months or even two years.
But, I dont think its ever going to happen. So there is a certain level of denial, and because of that, Im not seeing a whole lot of proactive work to try to change how things are done and set themselves up better for the future. One of the things very interesting to me that doesnt get talked about much is ... the way work is structured overall in our society in terms of how jobs are designed and how theyre rewarded, compensated and evaluated.
Although its been tweaked over time, its all a direct outgrowth of what was set up during the industrial revolution. Were talking about systems that were created for an entirely different economy, an entirely different era, in which people had totally different expectations.
Now were in the information age and were trying to take these systems that are really very old-fashioned, sort of square systems, and shove them into these round holes, hoping somehow it will work, when it wont.
Jim Vickers (email@example.com) is associate editor at SBN.
Limousines pull up to the gated entrance, flash bulbs pop and visitors are hounded by television reporters armed with cameras and microphones as they make the long stroll down the red carpet.
Its not Oscar night. Its a $54 a plate restaurant in Anaheim, Calif., that is the rage among teens and baby boomers. Modeled after an evening at a Hollywood awards ceremony, restaurant visitors are given the star treatment, immersed in this alternate reality from the moment they enter the gates of Tinseltown Studios. There are even best actor and actress awards presented at the end of the night to a few lucky guests who were plucked out of line to perform famous movie scenes earlier in the evening.
Everything about the experience is scripted, while the food serves as just another prop to propel the illusion forward. James Gilmore, co-founder of Aurora-based Strategic Horizons LLP, believes escapist enterprises like these are the future of the service business. Although maybe not as calculated, he can rattle off dozens of other businesses already cashing in on the publics hunger for unique experiences.
If Tinseltown Studios is Gilmores experience economy at the extreme, at the other end of the spectrum is the corner Starbucks coffee shop. It is one of Gilmores favorite examples of the experience-based economys arrival. Other evidence is found in the ambiance of chains such as Planet Hollywood and the Hard Rock Cafe, the staged theatrics of Johnny Rockets restaurants and the soothing environments of Barnes and Nobles and Borders bookstores.
Gilmore contends, however, that the experience economy is still in its infancy.
The big idea is, at some point, businesses will charge explicitly for an experience, he says, pointing out that Tinseltown Studios flat fee for dinner illustrates this. We see some evidences of it today.
For skeptics, he offers the fact that the economy has experienced major evolutionary jumps twice before. Think of how coffee progressed from the bean to the can of Maxwell House at the grocery store to the 50-cent cup at McDonalds. Starbucks, where customers now pay nearly four times that for a cup of coffee is, in Gilmores estimation, the next logical step.
Gilmore and business partner James Pine collected their observations in a book titled The Experience Economy: Work is Theatre & Every Business a Stage. Time will ultimately tell whether the pairs expansive vision of this new economy will come to pass. After spending two hours with the very persuasive Gilmore, youre convinced it probably will.
But even if it doesnt, the ideas are an intriguing primer for executives looking for a way to differentiate their companies from the competition in a world where it becomes more difficult to do so every day.
Gilmore lifts the $2 cup of Starbucks coffee to his lips and takes a quick look around the room. There are mothers and children reading in the corner, a retiree looking over his morning newspaper and a group of young men sitting a nearby table scribbling away on legal pads.
They are providing a place that people value and they command a premium for it, Gilmore says of the Seattle-based coffee shop chain. It still has to be a good cup of coffee, but the value people attach to it is largely around the place for coffee drinking ... Hanging out like this has always been there, but now its increasingly the basis of business enterprises.
Starbucks scores high on Gilmores first rule of creating an experiential business: Appeal to the customers senses. The coffee shop has it down perfectly, from the large wall murals and bright thematic decor that is even carried out to the bathrooms, to the comfortable chairs and, of course, the sweet coffee aroma.
One thing service businesses can do to layer on top of what they currently do is determine what are the sensory things that can be layered on top of the service, says Gilmore. Taste is the easiest one. Serve food. In fact, pick a signature item. Look at each of the senses and what you can do.
Every business with a physical location that customers visit needs to consider this question, from retail clothing stores to dentist offices. Whats the sound of a car dealership? asks Gilmore. Do they throw on any old local radio station, or do they think very explicitly about the music and how it fits them.
Connecting with the customer in a memorable way doesnt have to be capital-intensive. Creating a unique place can be taxing on the finances, but scenery is only part of the equation. Equally important is the interaction of a companys employees with its customers.
Simple good manners wont cut it in the experience economy. Customers want original interaction, says Gilmore. They want to feel as if something important is happening. The right employee attitude, whether tightly scripted or not, can make even the dull reality of waiting in line a memorable event. Gilmore recalls an evening at the Cedar Lee Theater when he noticed such a character behind the refreshment counter.
He finished serving one customer, turned around and said, Whos next to be refreshed? recalls Gilmore, who still gets a kick out of the line. He doesnt say it to another person until a sufficient number of people go through the line. Then, he uses it again. He had this portfolio of routines he would spin to make it more memorable so you dont mind waiting.
People are willing to spend more time in an experience versus an ordinary service, which is get it to me fast and get me out of here. Experience is getting people to spend more time with you when they are in an otherwise time-starved environment.
An employees dialogue with a customer can also be used as cues to the customer that something important is about to happen, or to build excitement. Take, for example, the experiential Rainforest Cafe chain of restaurants, where guests eat underneath a canopy of jungle foliage surrounded by chattering robotic animals. The host doesnt say, Your table is ready. He says, Your adventure is about to begin.
The main idea behind all of it, Gilmore says, is taking the bored rigidity out of how companies treat their customers.
There is an opportunity for this in any enterprise, he says. Take receptionists, for example. Most of us are greeted pathetically. Same with the service across the counter in most service establishments.
Some may call Gilmores ideas just an extension of the service economy. Actually its show business and must be kept entertaining and fresh for customers to continue handing over their money. That means constantly changing the experience to bring customers back.
But, Gilmore says, once a company creates an attractive, escapist environment, customers will be more than willing to pay simply to experience it again. If you think shopping malls that charge admission are a little farfetched, think again. They already exist.
Universal City Walk, a California shopping mall, charges a $6 parking fee to visitors. It is refundable if you eat dinner or see a movie at the mall, but not if you purchase goods. Meanwhile, there is American Girl Place in Chicago. The upscale doll store charges admission to simply get in the door, then offers lunch for a flat fee of $16 a person, dinner for $18 and the American Girl revue for $25 a head.
You can spend hundreds of dollars and never buy a physical good, says Gilmore.
Gilmores point is that American Girl Place is creating places within places where it can generate additional revenue, a trend he sees more and more. And that is the real boon for those companies that buy into the experience economy, he says, a chance for new revenue streams that were previously unimagined.
The bottom line here is if you see experiences as a distinct economic offering, it opens up possibilities for what business you are really in, he says. Its all top-line revenue stuff. It gets you out of this world of constantly having to do the cost-saving thing and squeeze out the next nickel, which is ultimately, at some point, going to detract from how valuable the offering is to your clientele.
How to reach: James Gilmore, Strategic Horizons, (330) 995-4686; The Experience Economy is available at www.amazon.com. Jim Gilmore makes his living helping companies integrate customer experiences into their everyday businesses. He offers his take on some of Clevelands experiential companies. The Cleveland Indians/Jacobs Field (General Manger) John Hart was quoted in U.S. Today saying they cant get any more revenue out of the stadium. Hes wrong. They already get added revenue from fancast, where you can go call an inning of baseball for $30 and receive a broadcast quality recording. Thirty-two people so far this year have spent $300 to propose to their girlfriends with Slider showing up with roses. There are all kinds of other added revenue possibilities. Once people are there, its a captive audience for which you can stage even more experiences. Progressive Insurance You have an accident and a Progressive vehicle shows up driven by your host for the accident. They take you inside the vehicle, give you a cup of coffee and a phone for you to call family and friends to tell them what happened. Meanwhile, they are outside dealing with the other driver and the authorities. They isolate you from all that. You escape from all that. In as high as 90 percent of the cases, they will write a check on the spot and point you in the direction of a specific repair shop. The experience is the marketing. The word of mouth on this is powerful. It is a wonderful example of how any business, particularly any service business, can harmonize a set of cues that creates that impression of, Hey, we care. Its not about financial quotes, its very much about the social experience that happens. The Rock and Roll Hall of Fame and Museum A museum may be the wrong model. Let the facility itself be established and let the people break the rules inside let the rebellion happen. One of the greatest spaces in the whole place is where they show, by year, the Grammy awards. But they have people go in there and sit and watch video images. It ought to be every night a rock concert, and at the end, the visitors ought to pull out their lighters, even if they have to hire paid employees to model that behavior. They have to let rock and roll behavior happen there at all times. Ive been there (when) they are redoing something. They have a tarp over it, and I pull down the tarp to look. They say, Dont look at that. How rock and roll is that? Its sterile. Its too museum. Its not rock and roll. What happens, you may ask, once the experience economy is maxed out? Gilmore says consumers will pay companies for guaranteed transformation. The idea may sound more like science fiction than the future of business, but he argues it is not as outlandish as many first think. We came to this idea through customization, Gilmore explains. If you customize a good, you automatically turn it into a service. If you customize a service, you automatically turn it into an experience. We asked, If you customize an experience what do you turn it into? The answer is a transformation. That means businesses offering golf lessons today may eventually charge for the instruction by how many points you want to knock off your handicap. First, you would go through a diagnostic test to determine whether you have the potential for improvement, says Gilmore. However, dont expect transformation to come without a hefty price tag. The key to transformation is to charge for demonstrated outcomes, says Gilmore. In the case of golf, charge explicitly for the lower handicap. Some guy may pay $720 for lessons some summer. I believe some people would pay $7,200 for a guaranteed or demonstrated outcome. Especially, if that outcome means the difference between success and failure. Jim Vickers (firstname.lastname@example.org) is associate editor at SBN.
Experience report card
By Jim Vickers
The future of experience
Jim Gilmore makes his living helping companies integrate customer experiences into their everyday businesses. He offers his take on some of Clevelands experiential companies.
The Cleveland Indians/Jacobs Field
(General Manger) John Hart was quoted in U.S. Today saying they cant get any more revenue out of the stadium. Hes wrong. They already get added revenue from fancast, where you can go call an inning of baseball for $30 and receive a broadcast quality recording.
Thirty-two people so far this year have spent $300 to propose to their girlfriends with Slider showing up with roses. There are all kinds of other added revenue possibilities. Once people are there, its a captive audience for which you can stage even more experiences.
You have an accident and a Progressive vehicle shows up driven by your host for the accident. They take you inside the vehicle, give you a cup of coffee and a phone for you to call family and friends to tell them what happened. Meanwhile, they are outside dealing with the other driver and the authorities.
They isolate you from all that. You escape from all that. In as high as 90 percent of the cases, they will write a check on the spot and point you in the direction of a specific repair shop.
The experience is the marketing. The word of mouth on this is powerful. It is a wonderful example of how any business, particularly any service business, can harmonize a set of cues that creates that impression of, Hey, we care. Its not about financial quotes, its very much about the social experience that happens.
The Rock and Roll Hall of Fame and Museum
A museum may be the wrong model. Let the facility itself be established and let the people break the rules inside let the rebellion happen. One of the greatest spaces in the whole place is where they show, by year, the Grammy awards. But they have people go in there and sit and watch video images.
It ought to be every night a rock concert, and at the end, the visitors ought to pull out their lighters, even if they have to hire paid employees to model that behavior.
They have to let rock and roll behavior happen there at all times. Ive been there (when) they are redoing something. They have a tarp over it, and I pull down the tarp to look. They say, Dont look at that. How rock and roll is that? Its sterile. Its too museum. Its not rock and roll.
What happens, you may ask, once the experience economy is maxed out? Gilmore says consumers will pay companies for guaranteed transformation. The idea may sound more like science fiction than the future of business, but he argues it is not as outlandish as many first think.
We came to this idea through customization, Gilmore explains. If you customize a good, you automatically turn it into a service. If you customize a service, you automatically turn it into an experience. We asked, If you customize an experience what do you turn it into? The answer is a transformation.
That means businesses offering golf lessons today may eventually charge for the instruction by how many points you want to knock off your handicap. First, you would go through a diagnostic test to determine whether you have the potential for improvement, says Gilmore. However, dont expect transformation to come without a hefty price tag.
The key to transformation is to charge for demonstrated outcomes, says Gilmore. In the case of golf, charge explicitly for the lower handicap. Some guy may pay $720 for lessons some summer. I believe some people would pay $7,200 for a guaranteed or demonstrated outcome.
Especially, if that outcome means the difference between success and failure.
Jim Vickers (email@example.com) is associate editor at SBN.
This will likely become THE topic for the Holiday shopping season, as Web-based shopping becomes even more pervasive. Estimates now range that between 4-6% of all Holiday sales will derive from business Web sites. With easy mouse-click shopping, and the elimination of 800 number calling, mailing delays, and the other attendant problems of traditional mail order purchasing, customers will EXPECT the product to be delivered ON TIME and AS DESCRIBED ON THE WEB SITE.
If you have a business Web site already, make sure that you deliver both products and information clearly. Amazingly, something as simple as slipshod communications can spell the difference between success and failure of a customer relationship. We recently tried to purchase some photographic equipment from a major company’s Web site and discovered that the product did not have a listed price. Curious, we e-mailed the company and requested information about prices. Two weeks later (yes, that’s right!) we received an e-mail stating that the product was discontinued. No other information, no suggestions for alternatives, nothing.
Since we had done a considerable amount of business with the firm, we called their 800 number. (Note please: your customers will likely NOT take this extra effort! Most consumers will abandon ship after receiving a dismissive e-mail!) The sales representative said that, yes, the item had been discontinued, but they still had some in stock at a reduced price. When we asked about the Web site listing, he replied that the Web site was part of a different department, of which he knew nothing.
Moral: Your Web site service should be identical to your other service, whether retail, direct mail or telemarketing. Discrepancies among these will discredit your relationship with hard-won customers.
Something as simple as e-mail helps cement the bonds between customers and suppliers. We recently worked with a client who wanted to make major changes to a four-month-old Web site. When we asked about customer feedback, he replied that he had never checked his e-mail! In fact, he had never installed an e-mail program on his business computer! Now put yourself in his customer’s position: you invested your time in visiting his Web site, took the trouble to send an e-mail, and never received a reply. Would you likely do business with him again, much less revisit the Web site? What will you tell your colleagues?
These are very real problems in today’s marketing climate. Rob McCord, president and CEO of the Eastern Technology Council (www.techcouncil.org or e-mail firstname.lastname@example.org) recently noted that, “At its best, the Internet is about relationships, not eyeballs. Smart businesses focus their Internet activities on building more effective marketing programs through customized service and perfect customer segmentation.” Businesses are now viewing an Internet presence as an effective customer service tool. “Companies can improve customers service through an e-commerce solution, although this is not necessarily cheap and simple,” said McCord. “In fact, it can often be very expensive and complex with larger organizations. It’s also important to view customer service as an iterative process making improvements through consistent customer feedback. As you do this, be certain to consider the costs of building an effective customer service program. They can escalate.”
McCord also noted that asking for customer feedback can be problematic, if you are less than sincere. “It’s a bit like the old trial lawyer saying about asking questions: ‘Don’t, if you don’t want to learn the answer.’ If you ask for questions and comments, be prepared to respond DIRECTLY to your customers. They’ll view anything less as a betrayal of their trust in your sincerity. If you don’t respond, you risk making a powerful enemy. Customers today can share experiences quickly through e-mail and discussion groups, so it’s not uncommon for a less than satisfactory customer service experience to gain wide notoriety through special interest bulletin boards and other e-forums.”
At its best, customer service can be a genuine boon to a business. Niche marketer Past Paper (www.pastpaper.com) specializes in very hard-to-find pieces of ephemera, such as vintage newspapers, magazines, advertising premiums, and other bits of Americana. Founder Brett Snyder started building his business years ago through traditional retail media, namely flea markets and a retail store. He noted recently that, “People would come into the store looking for a specific item, such as the Life magazine of the week they were born. If I had the item, the price was secondary. However, most of the people who wandered in the shop were looking for diversions and thought the specialty pieces I carried were expensive. They were right, for a casual shopper. For someone specifically looking for that piece, they were inexpensive.
“You could always advertise in magazines such as Paper Collectibles Monthly or AB (American Bookman), but ads were expensive and missed most of your very narrow target audience. However, thanks to Web marketing I can make my database of thousands of items available through the Past Paper Web site, and thus reachable through standard Web searches. Customers repeatedly tell me that they have been looking for years to find specific items, and were unsuccessful until the Internet came along. Sometimes I’ve had those same items for years in inventory, waiting for the right customers. By making the material available through the Internet I can effectively match up customers and unique items.
“The other key is fast service. We respond to all queries within one business day, which is essential for a medium which delivers instant information. We’ll use e-mail to let customers know more about an item (including Internet pictures of items) and shipping information, including when and how we have shipped their item. Recently we have been promoting our Web site through eBay auctions, where we list hundreds of items every week for sale. It’s becoming our most effective advertising medium, since customers often use eBay to browse for items, then e-mail us for their specific needs. For Past Paper, the Internet has created a giant electronic antiquarian bookstore, with instant information and instant service expected. Follow through is critical to our success, which is what I hear most from customers as they become repeat buyers.”
Other businesses depend on very close relationships with customers. Bill Holland, founder of Holland Arts (www.hollandarts.com) is the nation’s leading authority on the artist Louis Icart, as well as an internationally known specialist in turn-of-the-century artist Maxfield Parrish and items produced by Tiffany Studios. He has published extensively on these subjects, and is a regular participant in antiques and art shows around the world.
A year ago, Hollandl opened the Holland Arts Web site, and to date has received more than 18,000 visits. He noted that, “My client base is expanding dramatically, thanks to my Web site. I have sold specialty collectibles to people as far away as Switzerland and Japan. Even for a niche business such as mine, where many items can sell for hundreds, or thousands, of dollars, it’s still surprising to see the volume of inquiries and sales. I receive an average of five e-mails a day.
“E-mail makes me a more effective merchant. For one thing, it eliminates the guesswork in transcribing telephone messages, since you see exactly what your customer wants. Plus, you have a tangible record of your communications, since everything’s in writing. No more answering machines or telephone tag across continents. A nice side benefit is that my phone bill is notably lower, although that wasn’t the original intent.
“I answer all e-mail inquiries promptly and with a personal touch. In my business, form letters would drive away customers, so I treat everyone as though they were visiting my stand at a trade show. Even on the Web, it’s important to know your client and have them feel comfortable. The Internet is the future, but fine arts will always be sold with personal attention.”
No matter what the business, the difference in Internet experiences lies in attention to the customer. Your Web site is your business commitment and is as much an integral part of your organization as a storefront or catalog or trade show booth. If you invest time and money into developing your Internet business, you will satisfy your customers and improve your business. Conversely, there is a severe opportunity cost: ignore your Web site and e-mail, and you’ll alienate, if not enrage your customers. Be a part of Internet success and mind both the glamour and the hard work every Web site demands.
Jim Shulman is president of Marketing Results, a Web site consulting organization. He may be reached at (610) 648-0617, by e-mail at email@example.com or by the Internet at www. marketingresults.com.
In its early days, the foundation’s landmark studies on public schools, parks and recreation and the criminal justice system led to enormous changes. From the creation of the Emerald Necklace, Cleveland’s Metroparks system, to the renovation of Playhouse Square and Severance Hall, there are few projects in Greater Cleveland that aren’t in some way touched by this organization.
The foundation boasts assets of $1.5 billion, and last year doled out more than $47 million. The man appointed to oversee that awesome task as president and executive director is Steven A. Minter.
Minter has a background in public administration, having worked as the commissioner of public welfare for Massachusetts and as Undersecretary of the U.S. Department of Education. He has been director of the Cleveland Foundation since 1984.
He states the foundation’s role simply: “We help donors carry out their dreams, of what they wanted to do.” SBN sat down with Minter to learn the philosophy behind corporate giving.
What role has the Cleveland Foundation played in the make-up of this city?
We were the first community foundation in the United States, established in 1914. The foundation’s mission was to help improve the quality of life for all the citizens of Cleveland.
It was set up in such a way that it would be administered by a local bank, then the Cleveland Trust Co. (later Ameritrust), and it would place emphasis on encouraging persons of considerable means and small means to give something back to the community from which they made their living. Donors could specify how they would like their dollars used in perpetuity.
The foundation has been involved in schools, neighborhoods, housing and economic development. I think we’ve probably been involved in almost anything you can ask about that has gone on in Cleveland providing some support, or we were involved in early start-up stages.
How important is the role of business to the process?
There’s a very large foundation community in Cleveland, and when you then add in the corporate sector, this is a community that has been very generous in terms of corporate giving. It makes for a lot of difference. In almost everything that goes on in this community, you find a mix of foundation funds and corporate funds and public funds.
Most foundations are giving from endowments and most companies have gone through a process and decided to allocate some portion of their income toward a corporate contributions program. A few of those companies have established foundations.
Cleveland is a partnership community. Public/private partnerships are something this community is quite distinguished about, even across the United States. Groups come here constantly from other cities to try to understand how the Cleveland turnaround occurred.
What is interesting, and a lot of fun these days, is to watch a lot of the smaller companies that don’t have 500-plus employees gradually beginning to pick up a share and do some very creative things. There are some small companies that are establishing school/business partnerships and working with the Cleveland Public Schools.
And there are other small companies which are making contributions to help sponsor a night at the opera and other activities. That’s really where our future lies, the emerging companies.
What role will the Cleveland Foundation play in the future?
We’re going through a period in the nation’s history where we’re going to see over the next 25 to 30 years probably what will be the largest transfer of wealth from one generation to the next estimated to be in excess of $25 trillion. (We) know that there are a lot of people who today are accumulating wealth in amounts that they never expected that they would have.
Even after making provision for their heirs, there’s money left over and they’d rather not give it to the government. So institutions, whether it is the universities the hospitals, the Cleveland Foundation or others are trying to tell the story: That here is an opportunity in our case for you to help the community forever by making a planned gift in your will.
What we can say with some degree of confidence is that the Cleveland Foundation is going to be here. It’s permanent. It cannot be picked up and moved someplace else. Nobody can come in and acquire the Cleveland Foundation. It’s really the people’s foundation.
How to reach: The Cleveland Foundation, (216) 861-3810
Daniel G. Jacobs (firstname.lastname@example.org) is senior editor at SBN.
During the past decade, Pittsburgh-area businesses and entrepreneurs have had more than their share of conferences, committees, partnerships, alliances and other aggregations of experts seeking to nurture high technology as if it were a commodity. The Pittsburgh Digital Greenhouse, unveiled in June 1999, is something else entirely.
The local entrepreneurial ranks may soon rejoice and worship at the new Greenhouse because of its tightly focused, single-minded goal of growing one specific cash crop: the new “System-on-a-Chip (SOC)” technology.
Planting the seeds of growth and prosperity
Leading the charge in this nonprofit organization, funded in part by the Commonwealth of Pennsylvania and a consortium of private-sector members, is Dennis Yablonsky. Yablonsky, former president and CEO of Carnegie Group Inc., is president and CEO of the Digital Greenhouse.
He’s working with a host of companies which are among the who’s who of the nation’s high-tech industries. Among them are international giants Cadence Design Systems Inc., Casio Computer Co.,Ltd., Cisco Systems Inc., Oki Electric Industry Co. and Sony Corp. Academic members include Carnegie Mellon University, Penn State University and the University of Pittsburgh.
Civic, business and professional organization members include the Pittsburgh Regional Alliance, the Pittsburgh Technology Council, the Allegheny Conference on Community Development and the Commonwealth of Pennsylvania. Local associate members include Neo Linear Inc., Pittsburgh, which develops and markets software tools for the design of mixed-signal integrated circuits; Videon-Central Inc., State College, a provider of digital video hardware and software designs for the computer and consumer industries; and Sima Products Corp., Oakmont, an innovator in consumer electronic accessories.
“The Digital Greenhouse was born out of a corporate demand for an integrated environment that enables innovation and sustains new product development,” Yablonsky says. “Each component works in synergy, creating an ideal environment for forward-looking companies. Every angle of research, product development and marketing has been considered in planning the ideal environment for the 21st century SOC-based product design.”
The Digital Greenhouse is designed to operate through five distinct but interrelated programs:
Electronic Design Technology Development Program This is the key building block. It will provide research funds, expertise from Greenhouse leaders and project management to facilitate breakthroughs in focused intellectual property (IP) applications for digital video and digital networks.
Electronic Design Education Program This will develop courseware and training modules for the retraining of electrical engineering and computer science personnel in SOC technology. It also will create a joint degree program among academic participants.
Electronic Infusion Program This is a new technology concept centered on sending highly specialized teams into medium- and large-sized companies to identify opportunities for the use of electronics to add value to existing products.
Intellectual Property Exchange Program This responds to a need for commercializing intellectual property available at local universities and high-tech companies. The center will develop the standards and processes to exchange intellectual property and develop marketing plans and alliances with similar R&D groups around the world.
Complex Support Program This will be housed in a facility with highly secure electronic infrastructure that enables technology companies to efficiently transmit their product to supplying, collaborating and user companies. It will connect organizations within the Digital Greenhouse to suppliers, collaborators and users outside the region. Companies involved will have access to a telecommunication test-bed environment. Access to venture capital will be provided through the Complex Support Program.
How the technology works
Charles Brandt, PhD, chief technical officer for the Greenhouse, describes the infant technology this way: “SOC integrates many functional systems directly on a single chip to more efficiently control the features of the product into which it is incorporated. For example, designers previously would use one chip for memory and another chip for data processing, and so on, all within a single device. SOC eliminates that process by combining these various functions in a single microchip.
“Smaller, faster and more affordable smart products from integrated data, cable and cell phones to wireless handheld devices for voice, fax and data are in the works,” Brandt continues. “These, and others not yet imagined, are examples of digital consumer devices enhanced by the addition of an SOC microchip.
SOC also will allow designers to bring products to market faster and cheaper.
“Previously, chip designers would start from scratch when developing a product. But SOC technology allows designers to mix and match capabilities sort of like building blocks rather than having to come up with a whole new chip at the outset.”
Before joining the Pittsburgh Digital Greenhouse as its science guru in October, Brandt was a researcher at the Northrop Grumman Science & Technology Center in Pittsburgh for 11 years, most recently as manager of the microelectronics department. He will coordinate the Greenhouse’s Electronic Design Technology Development Program.
Something for everybody
Digital Greenhouse marketing literature describes the organization as “an attempt to leverage the region’s existing assets to create an SOC cluster that initially focuses on the digital video and digital networking markets, but will ultimately come up with new ways to put innovations like SOC to work to develop a wide range of next-generation products.”
The Digital Greenhouse is held up as a new model of public, private and academic business and technological initiatives designed to foster the growth of smart products in Western Pennsylvania. The aim is to generate, in one environment, the essential components which support SOC development and technology.
Among its greatest benefits to industry leaders that join, Yablonsky says, is that they gain access to an unprecedented concentration of highly specialized resources specifically geared toward SOC design. And they’ll be able to work toward establishing a set of standards and an efficient market for reused intellectual property. They also will help create a pool of engineering talent with special training in repurposing intellectual property.
For these corporate giants, the technology-friendly environment described by Yablonsky means access to streamlined legal frameworks, intellectual property valuation models and technical practices which will reduce intellectual property lead-time transactions.
Regional businesses that join will enjoy the influx of companies attracted by the Greenhouse. That means more buyers and sellers, more intellectual property availability and a more robust intellectual property market. These firms are expected to work through the Greenhouse toward building a standard methodology for reusable intellectual property and construct an electronic infrastructure that enables such property to be easily bought and sold among participating companies.
Local start-up companies likewise will get a reliable framework for sustained growth as well as special access to specialized design software, venture capital funding for SOC-related businesses and support services such as marketing, finance and legal assistance.
The Harrisburg perspective
Gov. Tom Ridge has been a prime mover in the creation of the Pittsburgh Digital Greenhouse, putting up state funds to launch the initiative and traveling to Japan and throughout the United States to attract ideas and members.
“The world has taken notice of the Pittsburgh Digital Greenhouse,” Ridge said recently. “Unlike traditional economic development strategies which focus on the attraction of individual companies while placing the emphasis on bricks and mortar, the Pittsburgh Digital Greenhouse gives Pennsylvania a competitive advantage by establishing a total and unique environment for the 21st century electronics industry.”
Ridge’s hope is that it will give Pennsylvania the high-tech credit he says it deserves.
“World-class firms now recognize what we have known for some time Pittsburgh and Pennsylvania are forces to be reckoned with in today’s high-tech economy,” Ridge says. “We seek to create the greenhouse of tomorrow to grow the products we’ll all use tomorrow and the high-tech jobs we need to ensure Pittsburgh’s prosperity into the 21st century.”
How to reach: The Pittsburgh Digital Greenhouse, (412) 201-3423
William McCloskey is a free-lance writer living in Pittsburgh.
Tim Galvin faced one of his biggest undertakings shortly after he co-founded a commercial real estate company with business associate Tim Wathen.
It wasnt a multimillion-dollar construction contract similar to ones hed worked on, like the AEP headquarters or St. Anns Hospital, while he was employed years earlier at Turner Construction. This time, it was his own company, Equity, in need of his building expertise.
We actually started in 1989 the worst real estate year in this century, Galvin says, attributing much of the companys rocky start-up phase to the savings and loan crisis and subsequent stall in development.
The first year we were profitable. The second and third were really tough; the fourth was hard; and the fifth we were really negative, Galvin says, adding that the Columbus-based company became a hard-bid construction contractor from 1990 to 1992 in order to survive.
Once the real estate market started to heal, Equity began to grow, and in 1996, brought on its first full-time commercial Realtor. Now, the company has $20 million in revenues and 42 employees, plus 10 independent agents in Columbus and an affiliate company, Equity Residential Corp., near Cincinnati. In fact, Equitys capabilities have even landed it such high-profile projects as converting the old DeSantis mansion into offices for Horizons Video.
Just as Equity began to recover, however, Galvin faced another repair job this one originating after the purchase of the companys East Long Street building in 1995. Galvin and Wathen waited more than eight months for a building permit from the city to renovate the 1921 building for office space.
During that time, the building code changed twice and we lost financing, because time commitments ran out, he says.
Tolerance also ran thin for the normally kind-natured Galvin.
The day we got our occupancy permit, I filed a formal complaint against the Columbus Building Department, Galvin says. It was difficult to do for fear of retaliation. I gave it a lot of thought.
He got support from three organizations in which hes a member: Central Ohio Associated General Contractors of America, Central Ohio Builders Exchange and Associated Builders and Contractors.
I decided the only way I could help the City of Columbus was to force state inspectors on them and force them to get better or at least make them look at their systems, he says.
He was probably the single individual responsible for the City of Columbus to revitalize and revamp their antiquated building department, says Rich Hobbs, executive vice president, Central Ohio Associated General Contractors of America.
In fact, it was Hobbs who suggested Galvin might be able to help Delaware County solve similar problems when officials there recruited volunteers last autumn to serve on a Building Department Review Committee.
It wouldnt be the first time Galvin volunteered his assistance. He serves on the Catholic Diocese of Columbus building commission, reviewing projects at parishes.
Galvins personality, which includes a calm honesty, makes him successful as a business person, says Bob Deibel, superintendent of buildings for the diocese.
Its ideal, because theres not what you would call a flame point, Deibel says. He deals with things on a really good business level. I take Tim as a very hard-working person and a good family man.
As a fellow shareholder and Equitys CEO, Wathen echoes Deibels impressions of Galvins honesty.
Tim never has any hidden agendas. Hes just real open; he throws it all on the table, Wathen says, remembering that the very first time the two met, they came away with at least the idea of forming a company together.
We share a common value system, which is integrated in our corporate culture, Wathen says. So Tim is waving the same flag Im waving as a leader in the organization.
The value system, he says, originates from a shared faith.
A Roman Catholic, Galvin calls the most humbling experience of his life an interdenominational retreat weekend, called Cum Christo, held at his church during Equitys first year in business. Wathen attended the retreat a year later.
Galvin says he came away with a realization that ran contrary to the concept of earning Gods love, which he grew up with.
What Cum Christo showed me is thats not at all what faith is about. What God wants is a personal relationship with you, Galvin says. Its not about going to church on Sunday and being a jerk all week. Its not about whats in it for you. Its not something you can earn. Its a process, and its a lifelong process. Salvation is a gift.
Steve and I struggled through these first few years in our business, Galvin says, and it really became evident to me that the only reason we were in this business is because God wanted us to be in this business.
Joan Slattery Wall (email@example.com) is associate editor of SBN Columbus.
Anita Brattina wasnt yet 27 years old when she put a desk in the spare bedroom of her apartment, recruited her sister-in-law as a secretary/bookkeeper and set out to build a multimillion-dollar international marketing consulting business. A brash dream, even for 1984.
Today, Brattina is president and CEO of Direct Response Marketing Inc., a full-service telemarketing and telephone research organization providing business-to-business and consumer capabilities to clients around the world. The firm, now based in Forest Hills, provides everything from buyer preference profiling, direct mail follow-up, customer research, appointment setting and telefundraising to market research, opinion polls, seminar and focus group recruitment and database enhancement and verification.
At the outset, Brattinas resources were scant a journalism degree from Duquesne University, seven years experience in corporate marketing, and a little cash from an employment separation package she had received.
But she had two secret ingredients that give this story a positive twist persistence and a willingness to learn.
As I got into it, I was totally unprepared to realize how little I knew about business, even after years as head of a corporate marketing department, says Brattina, looking back on 15 years of progress. I was naive. I knew how to do the business, but I didnt know how to run it. So I was forced to learn, somewhat painfully at times, that knowing your craft doesnt make you a CEO.
I didnt know about business plans, financing, hiring, delegating the skills it takes to keep all the plates spinning.
Chronicling the journey
That Brattina learned both quickly and well is evident from the success of DRM. In the process, she documented her struggles and the lessons learned, producing one of the most popular small business books in recent years, Diary of a Small Business Owner: A Personal Account of How I Built a Profitable Business (AMACOM, 1996, $21.95, available from the National Education Center for Women in Business, (724) 830-4615, and in bookstores).
The challenges, obstacles, strategies and ultimately the triumphs she describes are invaluable reading for those who would be entrepreneurs.
Brattina reports, for instance, that despite her enthusiasm for the new enterprise, she experienced an unexpected and painful sense of isolation when she stepped out on her own.
Moving from the connectedness of a thriving corporation to the isolation of working in the apartment was severe a culture shock, she wrote. No secretary, no phones ringing with incoming business, no using solid years of business to justify constant name recognition, no flood of mail from professional organizations, no phone calls from colleagues sharing ideas.
Even five years into the venture, Brattina still was learning basic skills, she wrote.
In some ways, I had been running two businesses concurrently ... my business and the business my employees saw, she noted. My personal vision wasnt focused enough. I saw possibility in every idea. That meandering of vision dragged me through more trouble than I needed to endure.
Turning the corner
Brattinas open-mindedness and willingness to learn eventually carried the day. By 1992, the company was doing annual business of $250,000; by 1994, it generated more than $1 million in revenues.
During those two years, Brattina got help from Powerlink and other women-owned business consultants who provided her expert advisory boards and taught her to delegate responsibilities, focus on the CEO role, develop business plans and attract and optimize financing.
Through the learning process, Brattina says, she managed to hang onto her core values. She wanted to operate a professional and expert service based on customer and employee loyalty sore points in the teleservice industry at large. And she wanted to establish a work environment that fostered employee involvement and ownership.
Everything else was open to revision for this married mother of four, who came to Pittsburgh from her native Philadelphia to attend Duquesne. Today, five years after the intensive CEO training, she finds herself re-energized and refocused.
Our growth has been strong and steady, she says. Personally, Im enamored of the entrepreneur role again. Im getting the fulfillment I sought when I started.
And her plans for the future?
Were for poised for the next step, she says. It was a gradual and painstaking process to grow from a local company to a regional company, then from regional to national and international. Now we intend to become a truly global enterprise and open offices in other parts of the United States, and eventually, in key locations around the world.
Whether we grow our own or expand through acquisition thats something I cant say today. But we have the vision and the skills. So its not a matter of how just when.
How to reach: Anita Brattina at Direct Response Marketing Inc., (412) 242-6200, or by e-mail at firstname.lastname@example.org.
William McCloskey is a Pittsburgh-based free-lance writer.
About this series...
The SBN/PNC Women in Business Series is a new monthly series sponsored by PNC Bank showcasing the achievements of some of the regions top women business owners and the obstacles they have overcome.
PNC Bank continues to expand its commitment to women business owners. In its latest initiative, the PNC Bank Foundation offered a $250,000 grant to Seton Hill Colleges National Education Center for Women in Business to create a Web site resource for women business owners. Its Web address: e-magnify.com.
The hush of Infoliant Corp.’s Station Square offices is in contrast to the hubbub over the Y2K issue that dominated the news during the waning weeks of 1999.
Yet, in its own quiet way, the company formed in 1997 to offer computer users updates on the Y2K status of their software may very well have helped corporate and government computer users avoid a chaotic, or at least troublesome, New Year’s Day.
With thousands of software products available and in use, it would have been nearly impossible for most companies to assemble the Y2K status information to judge their exposure. Infoliant’s founders realized that and came up with the Year 2000 Network Advisor, a service that helped its clients do just that.
“What we do is aggregate and standardize and package the information for companies that don’t have the resources to do it themselves,” says Kevin Weaver, Infoliant’s executive vice president and co-founder.
Weaver repeats the conventional wisdom that appears to be emerging about Y2K: The likelihood of major catastrophes was remote, at most, and software makers, government and private industry saw the potential for problems and acted decisively and spent considerable dollars to head them off. That made the first hours of 2000 uneventful, at least as far as the millennium bug was concerned.
While they are undetectable to most of us, some lingering effects of Y2K do exist; some software did prove noncompliant, which created problems. That will mean weeks or even months of vigilance and ongoing demand for reporting on the status of software fixes.
Weaver says some help desks got swamped, and Infoliant still received status changes during January, something he expects to continue at a brisk pace, at least until the end of February. It also could mean a flurry of litigation coming out of those failures, and that, Weaver believes, may offer opportunities for Infoliant.
In this month’s One on One, Weaver reveals why he wasn’t worried that the world might come to an end at midnight Dec. 31, 1999, and talks about Infoliant’s future in a post-Y2K world.
SBN: What’s in the future for Infoliant?
Weaver: We’re looking at a couple of different strategies. We have prepared something called the compliance archive. Part of our process is to collect information about the Y2K status and keep that record as it changes over time. So we can tell you that this product was originally deemed compliant on May 21, 1998, and that in August, they found an issue, and in September, they found a second issue.
We’ve got all of that kind of information documented. We put that together in anticipation of supporting the legal community if there were a large number of Y2K lawsuits, so we’re exploring some outlets for that information.
The market for that, the need for that, is later, after the lawsuits start to get filed. That’s something that is there and just needs a bit of polish if we need to turn it on. What we’re doing right now is the market research and some product development work.
Many of our customers took it upon themselves to contact us and tell us some ideas they’d like to see us do, and we heard a very common message. What they told us basically is that they absolutely love what we’re doing with Y2K with the Year 2000 Network Advisor, but from their perspective, the year 2000 was just a special kind of bug, and that they would love to see some sort of service expanded, not just to cover a Y2K topic, but the general problems that occur every day with computers.
We’re in the process now of formalizing that in terms of understanding how big the market is and how we price and package it and adapt what we have to cover a broader range of topics. That probably won’t be ready for the market for a few more months.
Are we out of the Y2K woods?
The media attention on midnight, Dec. 31, was unfounded. It was kind of a lightning rod point, but anybody who’s been involved with Y2K and the information technology business understands that really only a small number of the problems were going to occur at that time, and that the nature of the problems was not going to be catastrophic.
According to some of the studies by the Gartner Group and others, a lot of the problems started occurring before Dec. 31, and we knew that from feedback from our customers. They feel about 50 to 60 percent of the problems are yet to be reported, and we’re starting to see that even with the products that we track.
From the perspective of everyday life, I think, yes, there certainly still are incidents cropping up here and there where bills get sent out with the wrong date or what have you. What we undertook as a problem was what we call the broad Y2K problem.
It wasn’t so much that there was a big old application that ran a bank written in COBOL 30 years ago that was not Y2K compliant. We took on all the desktop PC-distributed systems, things that companies have thousands of spread out all over the place. [For our customers] it was a logistics issue of, ‘How do I get technicians and people and information out to all these places and pick up all these things?’
So what we were getting feedback on now are people finding pockets of small things, things they had missed, things that vendors didn’t test thoroughly but are not at points that are affecting overall company performance.
There’s been a lot of stuff written in the last week or so asking whether this was a big hoax, did we overspend, was this a waste of money. There’s no doubt in my mind that had we done nothing, we would have seen a lot more significant issues.
We never expected to see lights go off or telephone service interrupted for any significant amount of time or anything that was going to be nationally newsworthy. I wasn’t surprised to see that. I was surprised to see that there were a relatively small number of reports.
How important was the role played by Infoliant and other similar services in averting widespread problems or even disaster?
This is something I told our employees in our wrap-up meetings. We have several hundred global 1000 firms as customers. Granted, they have lots of other resources going into Y2K we didn’t get a fraction of that $600 billion [estimated worldwide expenditures for Y2K compliance efforts], but we did certainly have an impact on some of the major organizations.
Almost every bank, brokerage firm and investment firm were customers of ours. Many of the leading telecommunications companies around the world are customers of ours.
I want to give some credit to the computer manufacturers and the software manufacturers. I think they did a stellar job of getting information out and available. Without their cooperation, we couldn’t have done our service. It’s unfortunate that it [compliance status] changed frequently.
One of the things our service did was to detect when patch one didn’t really fix the problem, so patch two came out to fix it, or patch one introduced a problem that patch two had to fix.
What was all the hype about with regard to Y2K?
I think what had people concerned was that in the history of technology, there have been a couple of instances where small failures cascaded into bigger problems, problems with telephone systems, where one phone switch in the long distance system goes haywire and all of a sudden things start to go down.
On the Internet in the fall, there was a cut in a fiber optic line in Ohio that pretty much shut down East Coast-West Coast traffic for several days until that got repaired. There was the blackout in the 1960s on the East Coast, where a power generator facility went down and everything started to cascade after that.
We’re talking about billions of lines of code and million of systems and hundreds of thousands of human beings worldwide working on things. It seems difficult to believe that nothing bigger occurred, that somebody didn’t miss something that was important.
That was a little bit of a surprise to us. [Infoliant] is in an odd position; we certainly didn’t hope for a disaster, but at the same time, we’re surprised that things went as smoothly as they did.
Ray Marano (email@example.com) is associate editor at SBN.