Anatomy of a restaurant launch
As James Blandi, owner of LeMont restaurant and now Viaggio as well, learned the hard way, success the first time around doesn't guarantee a second successful venture.
By Daniel Bates
Like many entrepreneurs who find success the first time, James Blandi Jr., owner of LeMont restaurant on Mt. Washington, wanted to duplicate his success. And he figured that, with all of the lessons he had learned, he would find that the second time around would offer a much smoother road.
But in the process, Blandi joined the ranks of others doing it again who have learned that's not necessarily so.
Blandi, 32, literally grew up in the business, watching his father, James Blandi Sr., build LeMont into one of the region's premiere four-diamond, fine-dining restaurants. The younger Blandi graduated from the Culinary Institute of America, attended the Florida International University of Hospitality Management, worked in hotel operations, spent time as a chef in Italy and eventually returned to LeMont as Sous Chef in 1988 and as his father's protege.
Several years ago, the elder Blandi turned over the business to his son, while continuing to serve as mentor and adviser right up until his death last month. The younger Blandi wasted little time after he took charge in aggressively breathing new life into a restaurant that had seen better times.
He completely redecorated the place, developed a new menu, and, ultimately, brought back the success of its heyday.
"He thought I was nuts when I wanted to gut LeMont and start over," Blandi says of his father. "But you must be willing to take risks to reap the harvest."
And reap he did. Blandi says the restaurant served upwards of 100,000 customers last year, up 15 percent from the previous year.
But like many driven, high-strung, detail-fanatical entrepreneurial types, Blandi wasn't satisfied with LeMont alone. He says he has had many ideas for new restaurants over the past five years, and that it was time for him to bring one of them to life.
"It had been a wonderful few years for me there, but it was time for me to go out and do more," Blandi says. That was the fall of 1996.
Not long afterward, with help from restaurant brokers Terry and Ned Sokoloff of The Specialty Group, he found a building for sale on East Carson Street on the South Side (near the Birmingham Bridge) where Cafe Giovanni had been located, and over the course of the next eight months, he transformed the century-old brick building into Viaggio, a restaurant serving "authentic Venetian" cuisine.
As Blandi, a hands-on, self-professed detail person (right down to the elevator walls lined in wooden cigar-box lids), says, "It's the architecture, the ambience-the way everything is just old and historical that really lent itself to feeling at home-the allure and romance of Italy."
But it was the food first, he says. "When you conceptualize something, you build the concept from the cuisine and not afterward. Then you build the restaurant around the kitchen."
He says the food reflects a "flair" of Mediterranean, along with spice combinations from 12 other countries-"something Pittsburgh's never tasted."
But the admittedly nightmarish problems and delays along the way didn't occur with the food. They came with the building itself-and Blandi's near obsession with details.
Blandi is the first to admit that, while the details can be what sets apart a successful restaurant from the unsuccessful, they also can bog down the planning process. Take the bar, for instance. He wanted his to offer a wide variety of specialty drinks, from frozen vodka-based drinks and those with fresh fruits marinating in them, to an entire bar area for martinis, another for single-malt scotches, a variety of micro-brewed beers, and port wine as well as grappa. He also wanted a cigar lounge complete with an old commercial wooden icebox that he had converted into a humidor.
"The environment has to be achieved-the abiotic personality must be reflective of the cuisine," Blandi philosophizes with an insistent air of confidence. "You have to take that look and feel and add the tables, the chairs, the bar, add some marble to really achieve that. Then you take into consideration the trends in the industry."
In the end, though, all of that took much more time and at least $250,000 more than he had planned. The delays and extra capital eventually got to him, Blandi concedes.
"I was right in the thick of it when I found out it was going to cost me a quarter of a million dollars more than I planned on," Blandi says. "I lost a lot of faith. I wanted to dump it. But my wife Catherine got me to pull my head out of my ass and forge ahead."
And forge ahead, he did, finally opening the restaurant in November with a large invitation-only charity fundraiser.
But even after the opening, he faced some serious personal crises which, he admits, take their toll on one who lives and breathes business. Among them was what he describes as a life-changing experience with his Corvette. One morning, tired from the long work hours he put in the previous day, he lost control of his Vette and flipped it. He obviously survived, but not without some excruciating injuries to his legs and a long gash across his scalp which took more than 270 stitches to hold together.
Then last month, after a long illness, Blandi's father and lifelong mentor died, leaving him alone to run the show.
Viaggio at a glance
Blandi located his new restaurant on the 2300 block of East Carson Street, in the former Cafe Giovanni restaurant as well as the adjacent former Duke's Bar. Long before the restaurant was opened, he hired a general manager, an executive chef (Paul Bates) and wait staff, whom he trained largely at LeMont. All told, he employs 20 full-time people and another 12 part-timers.
The restaurant seats 250 and, like LeMont, offers valet parking for dinner guests.
The problems actually began even before the closing on the properties, which reportedly took seven hours to complete and involved the creation of three separate corporations. But most of them had to do with the building renovations, which Blandi oversaw as general contractor. That is one area, he says, where he may have done things differently-and worked with different people-in hindsight.
His real problems started when he began to uncover the old brick walls inside the buildings. That's when he says he found that one of the buildings had no supporting walls in the back. That, of course, had to be resolved.
"The cost overruns came when I got behind the walls," Blandi says. "Knowing now what I know, I could have saved $100,000 in the process."
Among the many details Blandi concentrated on were the tin ceilings, art, table arrangements and furniture.
Blandi will not discuss his finances, other than to say he spent more than $250,000 over what he expected. But he also chose to purchase his two buildings rather than lease space on the South Side. While the money proved a setback, it didn't keep him from opening last November.
Others in such a situation, however, often aren't as lucky. "People think they can go in with enough capital to get started, but they have unrealistic plans, or they don't plan far enough in advance," says Terry Sokoloff, the North Hills-based restaurant broker who also provided some public relations for Blandi during the course of the Viaggio launch. "I think there also are so many unforeseen issues that can arise, and they aren't prepared to deal with it."
Sales to date
Again, Blandi won't discuss specifics, but he does note that he is "overly pleased because I am exceeding my expectations by 25 percent in sales." He claims he is filling 950 to 1,000 seats a week in his restaurant.
Sales and marketing
Rather than focus largely on heavy advertising and other traditional marketing strategies, Blandi points back to his attention to detail-a factor that he says plays a m ajor role in the failure of other restaurants in the region.
"The mere fact that I created a concept with all of the inclusions is probably one of the strongest marketing approaches," Blandi says. "We're hitting so many people in so many ways."
He puts considerable weight also on word of mouth from his early customers.
That, of course, doesn't discourage him from aggressively seeking public relations. He claims his and Sokoloff's efforts have landed 28 articles about him and Viaggio before the restaurant even opened.
If business continues to grow the way it has been, Blandi says, he expects to break even in three to four years. The trick, he says, is to continue to "do the things they look for-this concept feeds their needs."
And then there's the general trend in Italian food, he says. "Italian food has been No. 1 over the last 20 years, and I predict it will last for at least another 40 years."
Blandi sees two challenges ahead. First, he says it's always difficult to keep good employees in the restaurant business. "People are people, and good people are hard to keep because they always go where the dollar is," he says. "Then it's a matter of keeping them going and keeping them motivated."
The other challenge is just getting conservative Pittsburghers to accept such new concepts in the region. "Pittsburgh is chronically five years behind the times," Blandi says. "I had people calling me saying 'Why are you doing this? You're just going to fail.'"
Given Blandi's drive, however, such sentiments simply motivated him to dig in his heels and press forward. Says Blandi: "I will never conform to the traditional Pittsburgh restaurant. I would go down with a sinking ship before I do that."
If you think life∇and death∇in the country is simple, consider the story Harry, my barber, told me recently as he trimmed away at my hair.
Some time back, Harry's now-deceased brother had given him a pie-shaped piece of property adjacent to my neighbor's. It was a useless piece of property. Most of it sat in woods between other properties and offered poor drainage for a septic system. Nonetheless, he had kept the deed and property survey in a drawer at his time-frozen barbershop.
Being the good neighbor, I put Harry and my neighbor together to work out a deal because my neighbor was interested in the property. But then an odd thing happened on the way to what was supposed to be a simple sale agreement.
As they worked out a deal, Harry discovered an unsettling reality: He didn't truly own the property. It seems his long-deceased father had owned it, at least in part, and had never officially turned over his ownership to his son (Harry's brother). So Harry, with an attorney's help, had to get permission from his father's estate, or Harry's surviving siblings, to transfer ownership. He did that. Now he was ready to deal. Or so he thought.
When Harry and my neighbor tried to close the deal, Harry then found out that the ownership had not, in fact, been transferred to him, but rather to the brother who gave him the property. And now he was deceased. Confused yet? So was Harry, who then had to talk to those who controlled his brother's estate.
All that confusion over a useless piece of property which, as the now-deceased brother used to say, was more hassle than it was worth. Then again, that's what usually happens when you introduce death into the wheeling and dealing of your assets, commercial or personal∇and you're not really prepared for it.
If you think such bewilderment can happen only out in the country, where land means more to some than real teeth, then you haven't met entrepreneur Phil Young, this month's cover subject.
Young grew up in his father's Greensburg-based restaurant-equipment business, Morris Young Co. For years, he and his siblings understood that he would inherit the business when his father died, while his two sisters would get their father's real-estate holdings. Everything seemed in order, right up until their father died unexpectedly.
Like many business owners, Phil's father wasn't prepared for the inevitable. He hadn't taken into consideration such basics as estate taxes and the fact that his business and real-estate holdings were so intertwined. He used the properties as collateral for business loans.
As a result, Phil inherited an enterprise that almost had to be shut down to pay the taxes∇as well as the estate. Phil persevered and has managed to turn things around∇lessons he discusses in this month's cover story. But it cost him much time and aggravation, not to mention hundreds of thousands of dollars more than it would have if his father had planned properly.
Certainly, no one likes to think about the fact that, someday, they will die. But if you're hoping to pass your business on to your children, think about this: Do you really want to put your children through an expensive, time-consuming, bureaucratic hell just because you don't want to think about the inevitable? Why not pass on an unfettered legacy?
My barber's father and brother evidently didn't think about it, either. That's why he's still talking about it∇and why the property still sits there, unsold.
If you think it doesn't matter how much your business is worth, Bill Richardson and Bob Overbaugh of accounting firm D.G. Sisterson & Co. LLP advise you to think again.
"The problem," they say, "is that too many business owners don't take the concept of business valuation seriously. You can't just look at the company's balance sheet, earnings, assets, liabilities and what's showing on the books and say that's the value of the business."
They cite five "very important" reasons to consider a business valuation:
- Completion of a business valuation is mandatory to complete your estate planning properly if you own a business individually or as part of a partnership.
- You need one if you have any plans to use stock in your company for gift purposes.
- If there are multiple owners, it's needed in the event of a death or if one of the partners wants out.
- It may be needed to settle divorce proceedings because the valuation could affect alimony, possible control of the company and the impact on any buy-sell agreement among partners.
- Obviously, if you're in the process of buying or selling the business, it's needed for the lenders.
Then I take a nap.
It's just a half-hour, I assure my wife before sinking into my living-room sofa. Three hours later I awake, just in time for dinner. Maybe tomorrow, I figure. Maybe tomorrow.
As I learned while spending part of a day with frenetic entrepreneur Joedda Sampson recently, she didn't put off anything until tomorrow. There's no napping for Sampson, whose entrepreneurial interests run from bed-and-breakfast, advertising, and retail clothing, to construction, restoration ... and plenty of Victorian-style entertainment. As I learned, she may be as scattered as anyone I've met, but her passion-and focused discipline-kept her off the sofa and able to fulfill a life's work that proves anything but boring.
I joined her at 8:30 one sunny morning in late August at her yellow mansion at the corner of Fifth Avenue and Amberson in Shadyside to see if she was everything others had told me about her. But instead of finding a serious businesswoman dressed in an expensive suit and ready to take on the corporate world, I found a tall, long-haired redhead dressed in short jean shorts and cowboy boots pointing here and there as she consulted with two landscapers outside. She offered very specific instructions about various shrubs and trees while she oohed and aahed about the beauty of that greenery. Only when she was satisfied did we board her Range Rover.
We stopped for a quick cup of coffee, then proceeded to a local tile shop to pick ceramic tile for one of her loft customers. We then rode to East Liberty and her Victoria Hall, where I listened to her discuss stainless-steel appliances and sundry details. Then it was on to the Strip Lofts, where she commanded an army of subcontractors laying tile, hanging drywall and painting completed condominiums.
But then she absolutely had to stop and share with me the view of the city from the top floor. "Isn't it beautiful?" she almost declared.
We paused, and then she was off again to another project, another of her many business interests, conducting business all along the way over the phone in her vehicle. She apologized for the interruptions and for not dressing appropriately. Still, that didn't stop her from attending a lunch meeting-in downtown Pittsburgh-with a male business associate.
Certainly, her mind works like those of most high-energy entrepreneurs. She has the ideas, all right. But that's not what seems to matter.
If there's one thing that this month's cover story should convey, it's that she loves what she does-exuding an infectious passion not seen in most businesspeople. If it's not fun, she says, then don't do it.
But she also seems to know how to control that passion with a focus and discipline that serve mainly to channel that passion into ongoing success and allows her to feed it with so many diverse business opportunities. And she gets things done.
As for me, spending time with Joedda left a profound impact on my sometimes-less-than-enthusiastic attitude and demeanor. But it also left me exhausted. Indeed, it was time for a nap.
Without question, you've all done it, at least once. You've hired the absolutely right person for a position after only a gut feeling interview and reference check. Two months later, you realize you hired the absolutely wrong person for the job, and you've wasted a lot of time and money in the process, only to have to start over. Again.
The scenario plays itself out all the more as employers fret over a seemingly declining pool of qualified workers and accept high levels of turnover as simply a cost of doing business. But as Kevin Klinvex, director of North American operations at North Hills-based selection, hiring and compensation firm Select International, says, companies in this age of efficiency and increased work expectations "cannot afford even one bad hire."
Klinvex says it doesn't have to be that way-if you avoid what he describes as "the seven deadly staffing sins of startups and expansions. Making these mistakes, he says, "almost always" leads to disaster.
1. Not identifying the competencies/skills needed-Often, Klinvex says, employers fail to take the time to break down the position into the multiple skills necessary to do the job and then rate candidates equally on those specific qualities (such as interpersonal skills, problem solving, technical skills and job motivation). Those skillsets, he adds, must serve as a means to predict success on the job.
"This is probably the most prevalent hiring mistake that startups and all businesses make," he says.
2. Not knowing how to recruit for the best people-Companies often direct their attention to newspaper classifieds which, Klinvex suggests, tend to attract mostly unemployed people. Rather, they should find ways to reach the employed as well, therefore increasing the odds of recruiting to their fullest potential.
"Today's startups must build a positive community image and find creative ways to reach the masses, such as the Internet, broadcast news media and press releases," Klinvex says.
3. Poor planning-You've already waited too long to start recruiting if you're "feeling the pain" of needing more people, Klinvex contends. Selection should begin months before the need arises by identifying key competencies early and beginning to search for the right prospects at that time.
4. Using ineffective evaluation techniques-Companies using off-the-shelf hiring tests and interviews alone may as well use a coin toss to determine the right candidate, Klinvex says. Companies should invest in tools that have been tested for their particular work environments-environments with specific cultures, skillsets and temperaments.
5. Underestimating the importance of compensation and benefits-The same companies that complain of worker shortages and high turnover often are the ones that want to pay less and offer fewer benefits. Says Klinvex: "A lower-than-average compensation and benefits package automatically skews the pool of available applicants and eventually contributes to higher-than-normal turnover. Ironically, a company that wouldn't hesitate to invest millions in equipment will look for ways to cut spending on people."
Instead, he says, companies should pay close attention to compensation and benefits packages offered by comparable operations before making their own decisions.
6. Lack of understanding of legal consequences-Make sure your hiring system takes into full consideration all of the various employment laws in existence today (such as the Americans With Disabilities Act, Age Discrimination in Employment Act, the Equal Pay Act, and the Vocational Rehabilitation Act of 1973). Noncompliance, inadvertently or otherwise, will leave your hiring process vulnerable to legal penalties, Klinvex says.
7. Operating with little or no hiring budget-The adage "You get what you pay for" certainly applies here. By investing little in a hiring process-or simply sticking with a traditional interviewing process-likely will lead to bad hires in the long run, says Klinvex. He stresses that companies need to invest the time and money in identifying competencies, recruiting, collecting and screening applications and resumes, scheduling tests, conducting interviews, health screens and background checks, and sending out rejection letters. And they should maintain an ongoing candidate database for future needs.
For more information about Select International, contact (412) 358-8595.
Pitt Ohio Express Inc. truck driver Dana Scarff isn't unlike most of his tough professional breed. He drinks lots of coffee, loves to tell stories and laughs with the understated, rough-edged candor and cynicism of a veteran midnight hauler. Typical truck driver.
That is, until he starts talking about his circadian rhythms.
You may not hear him talk to his trucking buddies on the CB at night about this scientific phenomenon, but Pitt Ohio has made sure Scarff and his driver colleagues not only understand the terminology, but also use the knowledge to make them safer drivers. In fact, the Strip District-based trucking firm is so determined to stay at the leading edge of circadian-based study and safety that, for the past two years, it has allowed its drivers to become guinea pigs for a massive breakthrough study by research scientists from Carnegie Mellon University and the University of Pennsylvania.
The outcome, all participating parties hope, will be a new technology designed to both alert commercial drivers when their fatigue leads to drowsiness and, ultimately, force them to pull off the road and rest.
"Just being associated with this study carries us a long way," says Ronald Uriah, vice president of safety at Pitt Ohio. "This could be one of the most prominent technology advancements in many years, and we're on the cutting edge of this research. We hope to apply it to ourselves to enhance our operation. We never want to rest on our laurels."
So what, exactly, is a circadian rhythm? The scientific theory says our bodies function naturally according to cycles of energy driven by light and darkness. We're most energetic, the theory holds, during periods of daylight, when the sun feeds us with its energy. Our bodies naturally slow down within a certain cycle of time at night, a period known as a circadian trough. Understanding those peaks and troughs, trucking officials and scientists contend, is half the battle when it comes to improved safety.
Scientists have been studying circadian rhythms for years, particularly as they affect shift workers and others-including Pitt Ohio drivers-who have to work the night shift and seemingly face the greatest burdens of fatigue. In the trucking industry in particular, the American Trucking Associations (in partnership with the Federal Highway Administration and U.S. Department of Transportation) has published its own extensive guide for understanding fatigue in conjunction with training workshops on the subject.
To put the problem into perspective, a 1990 study by the National Transportation Safety Board found that 31 percent of crashes involving large trucks which were fatal to the truck driver involved fatigued truck drivers.
For Scarff, who regularly drives during the night (much of the driving at Pitt Ohio is done at night), it's an ongoing concern.
"There's no truck driver who can say they're not afraid of fatigue," he says. "It's been scary to me since the first time I stepped into a truck."
Uriah is quick to note that Pitt Ohio has always maintained a strict policy that requires drivers to rest at least eight hours between overnight runs and to call off work if overly fatigued or ill. He also says each run is timed to allow for breaks, tire checks and other things that indicate the company doesn't sacrifice safety for speed of service.
But as Damian Bierman, a research scientist at Carnegie Mellon Research Institute, says, "Even if someone gets adequate rest during the day, the opportunity to slip into a circadian trough at night is serious."
Until now, the trucking industry has preached awareness and education to drivers, teaching them about everything from effective on-road stimulants and how to detect drowsiness, to the advantages of strategic napping and how to get the best sleep at home. But when fatigue can't be avoided, what is a commercial driver to do? Especially when, as Bierman says, "the only thing that can effectively combat drowsiness is sleep itself?"
That's where the major scientific study comes in.
Several years ago, the National Highway Transportation Safety Administration contracted with Carnegie Mellon and the University of Pennsylvania to develop a noninvasive-but reliable-indicator of fatigue and drowsiness in drivers. Pitt Ohio joined the study two years ago, when it donated the use of seven of its drivers who volunteered.
Carnegie Mellon, overseeing this part of the study, studied the drivers initially in truck simulators and then set up a video camera and other recording devices inside the drivers' truck cabs. The initial goal, according to Bierman, is to develop an effective tool that accurately tracks the percentage of eye closure and detects driver drowsiness.
Scarff says it took him roughly two days to get used to the video monitor and resort to his normal driving patterns. "We smoked cigarettes, drank coffee and did whatever else we normally do," he says. "It didn't really bother us."
That phase of the study, which recently ended, netted Bierman and the other scientists an automated video system which, he says, can detect fatigue and drowsiness via measurements including eye closure, pupil movement, facial expressions and body movement. The video is protected by law from being used for accident reports, lawsuits and driver performance by Pitt Ohio, so drivers don't have to worry about repercussions from their driving habits.
The next step, Bierman says, is to develop an alarm triggered when the in-cab system detects drowsiness. He says researchers are contemplating a system that would release a strong peppermint scent or one with an audible alarm. Pitt Ohio's Uriah would like to see a system that would force drivers to pull off the road for a break when the alarm goes off.
The important thing, Bierman says, is that the system will be designed to detect drowsiness and warn the driver-but not stimulate the driver into ignoring his or her fatigue.
If the study goes as planned, Bierman says, the trucking industry will have a new, reasonably priced, high-tech system to protect drivers-and others on the road-from fatigue that could lead to accidents.
Uriah hopes it is adopted as an industry standard, so that economics don't rule out its use.
"It's good research that everybody can use and understand," Uriah says of the fatigue study. "I can't say enough about how great this study has been."
William Strickland Jr. doesnt look for attention. He doesnt want attention. But its hard to ignore the fact that, while other nonprofit organizations study the regions economic development efforts and overanalyze, Strickland just does it, one underprivileged person at a time.
Strickland is founder and president of the nonprofit Bidwell Training Center and the Manchester Craftsmans Guild, programs designed to develop self esteem and work skills in kids and unemployed adults. Through his entrepreneurial nature and creativity, his programs are solving the regions economic woes quietly but profoundlywithout a bunch of studies.
We dont have a task force or study group, Strickland says with the understated, no-nonsense candor that makes him the doer that he is. We just go out and work with companies and people. This is a center that helps people. We dont need any more damned studies.
Sticklands passion grew out of his desire to restore the blighted Manchester section of Pittsburghs North Sidethe neighborhood he grew up into its former glory. To do that, he says, you need to make people feel better about themselves and train them to lead productive and profitable lives.
Strickland created the Manchester Craftsmans Guild more than 30 years ago to use the arts to teach self esteem and responsibility to at-risk teen-agers. That stems from his own childhood, when he faced the uncertainties of growing up in Manchester. An art teacher at Oliver High School took the time to teach Strickland the art of potterya skill which gave him new hope for the future.
Today, Strickland says, the Guild offers a wide range of arts, including its nationally recognized jazz program, which produces concerts for some of the nations jazz greats and has its own music label. Between 75 and 80 percent of the students who pass through the Guilds doors go on to post graduate schooling, he says.
The Bidwell Training Center, meanwhile, works with a handful of local companies, including Bayer, Calgon Carbon Corp., Aristech, BASF, Mellon Bank and IBM, to create practical training courses in subjects that meet the needs of the companies. Of the many unemployed and homeless adults who take the courses, close to 80 percent consistently get jobs in those fieldsmany of them working for Bidwells corporate partners, Strickland says.
Perhaps the most impressive aspect of Stricklands economic development effort is that much of it is self funded. Strickland has long maintained an entrepreneurial spirit, which he says has been necessary to make up for dwindling government money available for such programs. His food service programs provide on-the-job training for a number of contracts that generate revenue for the programs. The Guild, through its live recordings of jazz artists who perform at the Guild auditorium, has produced a number of CDs under its label, with proceeds pumped back into the program.
This year, Strickland is in the process of building a 60,000-square-foot medical technology training facility. But he isnt stopping there.
He is leading an effort to transform a rundown 2.99-acre former shopping center along Chateau Street in Manchester into a large greenhouse complex and program that would train students in greenhouse horticulturespecifically, cultivating orchids and hydroponic gardening. Strickland says students would grow tomatoes and lettuce, to be sold to restaurants and other food service providers, with proceeds invested back into the program. The Urban Redevelopment Authority of Pittsburgh, which owned the site, has approved more than $1.5 million in grants and loans. The total cost is expected to climb to at least $8.3 million.
Strickland, who prefers the role of low profile doer, gained more national exposure than he ever expected when Fast Company magazine, in its September 1998 edition, featured him and the organizations he runs in an unusually long, 12-page spread with lots of photos and several sidebars.
With all of this, youd think Strickland was positioning himself for political office or another higher profile job ahead. But he says hes not budging from his lifes work.
Im from this neighborhood, and I want to improve it and bring it back to its former glory, he says. Im committed to here, and I plan to spend the rest of my life here.
When Aerial Communications decided to go retail with its wireless phone services, it didnt simply open its own stores or launch a franchise. Instead, it turned to a 24-year-old Upper St. Clair native with a telecommunications dream.
Matt Curti, wanting to launch a wireless phone business, researched his options and eventually approached Aerial. Together, they worked to launch the first-ever branded Aerial store. The pilot program, called Clear Choice, recently opened for business on Washington Road in Mt. Lebanon.
Unlike a franchise operation, many of Curtis start-up costs were funded by Aerial, giving Curti fewer up-front costs and risks. Aerial shoulders fewer risks in the long term because Curti hires his own employees, rents the space and owns the business. Still, Aerial provides training, signage, store displays, fixtures and advertising support.
If the branded store concept works, Aerial reportedly plans to roll it out in other markets across the country.
Clear Choice, open Monday to Friday, 9 a.m. to 5 p.m. and Saturdays, 10 a.m. to 3 p.m., carries Arch pagers.
Mark Juliano was one of the earlier executives to leave local high-tech star FORE Systems Inc. when it went public several years ago. But he wasnt about to simply put his share of the companys success in his bank account.
After bouncing around only a little, this high-tech marketing executive teamed up with a few computer software developers and acquired the rights to technology from Carnegie Mellon University that allows you to automatically analyze a videos full audio and image content. The resulting commercial product allows users to create video libraries that are digitized and catalogued for easy and effective searching.
While still a start-up, Julianos ISLIP Media Inc. (ISLIP stands for Integrated Speech, Language, and Image Processed) today caters to the likes of television network NBC, Turner Broadcasting, and even the Army, Navy and Air Force, among other early customers. Last year alone, it generated roughly $2.5 million in new orders, according to Juliano. And he expects to more than double that in 1999.
Perhaps his biggest success last year was raising $1.6 million in a private-placement equity offering to fund the years growth in employees and product development.
It definitely happened much faster than I thought it would, Juliano says of the financing. At least $1 million of that came from Pittsburgh, including money from Birchmere Investments, the early-stage-focused Adventure Fund, and Critical Path, a venture capital fund set up by the Esther Dormer family (of Computerm success).
On top of the funding, Juliano says the fledgling firm last August landed a $330,000 contract from the U.S. Air Force to develop a custom system for the archiving and retrieval of aircraft video footage for training and intelligence use. The National Institute of Science and Technology awarded ISLIP a $1.7 million contract to create technology that ultimately will lead to searchable television. Both are multi-year contracts and should lead to new commercial technologies for ISLIP, Juliano notes.
Employee growth likewise has been dramatic. The company has grown from roughly eight employees a year ago to 22 nowall have ownership in the company (a pet peeve of Julianos, he says, because he believes all employees should have ownership to motivate them effectively). And Juliano says he expects that number to double in 1999.
This year should prove no less challenging than 1998, he says. At the top of the agenda is another round of fund-raising, this time to the tune of $5 million over the next six months.
If we dont have cash, we cant do much, he says.
In addition to moving from cramped quarters on Craig Street in Oakland to about 6,600 square feet at the corner of Ninth and Liberty, downtown Pittsburgh, the company plans to launch another new service. Using its video archiving and retrieval technology, ISLIP plans to launch an Internet-based service that provides stock video footage to commercial customers such as ad agencies, television stations and other production houses, in addition to training video information. The footage will belong to customers who produce it. ISLIP will serve as distributor.
Juliano likens the service to book distributor Amazon.com, except ISLIP will distribute video instead.
Were really excited, Juliano says of the companys prospects ahead. But that doesnt mean hes satisfied. As he says, I think youre never really happyyou always want more.
But it looks like hell get it.