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Even Winners Struggle

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                   SoHo NEWS & TIPS
Helping You Make the Most of Your Small Office/Home Office


If you are struggling with starting up your own business, 
don't get discouraged. Today's article provides stories that 
serve as an example that even winners struggle.


P.S. You can discuss this issue or any other topic in the 
new SoHo News & Tips forum. Check it out here...

SoHo News & Tips Forum



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- Qwest announces it will layoff 360 employees...

- Energy giant BP PLC said it is in the "final 
planning stage" of a $3 billion project to retro-
fit its Whiting, Ind., refinery to process heavy 
Canadian crude oil...

- Suntron announces it will close its Olathe, KS 
plant and layoff 182 employees...

- Disney has sold 125,000 online film downloads 
less than a week after agreeing to make its titles 
available on Apple's iTunes store...

- Rumor has it Zultys has filed for Chapter 11 and 
that all employees have been given notice...

- Yahoo teamed up with former Vice President Al 
Gore's cable TV channel, Current TV, to create the 
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- Chrysler Group said it would slash current-
quarter production by 24 percent...

- Russian flag carrier Aeroflot said it would buy 
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Where Are They Now? Even Winners Struggle 
Staff Reporter of The Wall Street Journal. 

Getting a company off the ground is no easy feat, 
even if you've got a great idea.

That's what Witten Technologies Inc. has found out 
since it won a Wall Street Journal Innovation 
Award two years ago. It developed radar tomography, 
which is essentially a CAT scan of what lies 
beneath the ground down to 10 feet. Right now the 
company is focusing on helping construction 
companies avoid the missteps they often make when 
they don't have maps of underground infrastructure.

"The main thing has been trying to get some invest-
ment now that we've finished our trials," says 
Robert E. Green, president and chief executive of 
the Boston-based company. "I've had a problem with 
venture capitalists. The world they come from is 
so alien to the bricks-and-mortar world of 
construction. When you tell them you can see under-
ground, a lot of them don't see the importance of 

The company has just one licensee so far, but it 
has been demonstrating radar tomography's potential 
to the Florida Department of Transportation, which 
in late August added the technology to its planning 
manual, effectively adopting it for road construct-
ion. Mr. Green says he hopes the move will kick-
start the growth of his company's business. Using 
Witten's system can save Florida 12% on its annual 
construction budget of $7 billion, he says, by 
mapping underground infrastructure and matching it 
up with surveyed maps of the land.

Treading Water

Poseidon Technologies of Paris won an Innovation 
Award in 2001 for its drowning-detection techno-
logy. The company combines underwater cameras with 
analytical software to detect when swimmers fall 
to the bottom of a body of water motionless for 
more than 10 seconds.

So far Poseidon says it has installed 150 systems 
at costs between $125,000 and $150,000, up from 
half a dozen that were in place in 2001. Joshua L. 
Brenen, the U.S. representative of the company, 
says the systems have helped save six lives.

The company recently landed its biggest contract 
so far -- to outfit 20 Atlanta-area YMCA pools 
with the system, Mr. Brenen says. Poseidon is 
hoping France passes a law that would require 
drowning-detection systems in all public pools,
something French legislators are considering.

The high price of the system has kept Poseidon 
from expanding more rapidly, but the company -- 
which spent a bundle on its development -- feels 
it needs to keep the price high to recoup its 
costs. "The big factor is it cost somewhere between 
$30 million and $35 million to develop the soft-
ware," Mr. Brenen says. "We have a group of invest-
ors who are saying, 'Guys, let's get some money 
back on our investment.' "

Evolving Business

The Wall Street Journal's top award last year went 
to 454 Life Sciences Corp. for its method to 
sequence genetic codes quickly and cheaply. The 
Branford, Conn., subsidiary of CuraGen Corp. 
recently made headlines with news that it will help 
decode the genes of a Neanderthal for the first 

And business is rolling along, says Chris McLeod, 
454's president and chief executive. The company's 
system, which speeds up the genetic-sequencing 
process by a factor of 100, launched in October at 
a cost of $500,000 apiece, far less than the $20 
million to $30 million of investment it took
previously to be able to decode a genome, he says. 
So far sales have gone primarily to big genetic 
research institutions and biotechnology companies. 
In the past year, 454 increased its work force by
about 50% to 150 and brought in revenue of about 
$30 million.

The Neanderthal project will take two years and is 
the first of its kind. Scientists will study the 
small amount of similar genes that Neanderthals 
and chimpanzees shared that humans do not, in order 
to better understand how humans evolved.

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Mr. McLeod says 454's ultimate goal is making its 
gene-sequencing system cheap enough that it 
becomes a common health-care feature, much like 
other diagnostic tests like MRIs and CAT scans. 
"We can potentially usher in an age of personal-
ized medicine," he says.

Eye on the Prize

While 454's business has taken off quickly, Opti-
myst Systems Inc., a 2005 winner in the medical-
devices category, is still seeking regulatory 
approval for its invention.

In July an "angel investor" provided the company 
its first round of venture capital. The $500,000 
paid for Optimyst's third-generation design of 
its eye-medicine nebulizer, which it hopes will 
replace eye drops. Optimyst, based in West Islip,
N.Y., uses ultrasound to turn eye drops into a 
superfine mist. Founder James F. Collins calls 
misting a much more efficient way to deliver 
medicine to the eyes than eye drops, which often 
get as much on the cheeks as in the eyes.

Early clinical results are promising, and the 
company submitted an article to the American 
Journal of Ophthalmology last month.

Now the company is seeking another round of invest-
ment. Ultimately, Mr. Collins says, he wants 
Optimyst to be an original-equipment manufacturer, 
which would require tens of millions of dollars in 
venture capital, he says.

"We're making great progress on all fronts," Mr. 
Collins says. "This resonates with people. They 
can relate to the eye-drop problem."

A Fresh Coat

Sally Ramsey, chief chemist at Ecology Coatings of 
Akron, Ohio, says the Silver award her company won 
last year from the Journal spurred much investor 
interest, which will result in a reverse merger 
this fall.

"Things have really blossomed into a lot of areas, 
such as waterproof wallboard and specialized 
electronics," Ms. Ramsey says. The company has 
developed coatings that can block water, for 
instance, while allowing in air. "That's of great 
interest to many, many industries," she says. The 
company has licensed some of its technology to 
DuPont Co.

Ecology Coatings' innovation is using nanotechno-
logy to make coatings like paint or powder finish-
ing that cure rapidly by exposure to ultraviolet 
light, without using solvents that are often bad 
for the environment. The ultraviolet-light curing 
process also uses about 80% less energy than 
typical curing processes, which often involve huge 
ovens, Ms. Ramsey says.

Soaring energy costs have brought more customers 
to Ecology Coatings, along with many who wonder if 
the company can develop products that would help 

"There are a lot of people wanting to get into 
some new areas with us," Ms. Ramsey says. "They've 
thought of things I'd never thought of. It's very 


Understanding your profit numbers and creating a break-even 
analysis is the first step in making a business plan. For 
most small companies, the key portions of a business plan 
are the break-even analysis, a profit-and-loss forecast, and 
a cash flow projection. (Projecting your cash flow is key 
and will make or break your company: Even if your business 
is getting plenty of work or selling its products, if you're 
not getting paid for 90-180 days, you're not going to survive 
unless you've planned for it.) 

So what did you think about this issue? Drop me a line and let 
me know at mailto:mandi@gophercentral.com 

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