Boom in E-Commerce Answered by Echo Boom of Ben Franklin E-Assistance

June 9, 2000

University Park, Pa. --- Penn State's venerable Ben Franklin Technology Center (BFTC), which has been helping to develop traditional businesses in central and northern Pennsylvania since 1983, has jumped into assisting e-commerce prospects too - and is getting great results.

John Vidmar, director of Penn State's Transformation Business Services Network, which is funded by Ben Franklin, says that BFTC is currently working with more than 20 e-commerce companies out of its total portfolio of 48 companies.

"In helping e-commerce companies get started, you do things somewhat differently than if a company was in product development, for example," he says. "We try to determine if they need significant capital to get started; help them to begin to prove their concept and work with Ben Franklin to shop them to angel investors."

"The common thinking has been, that because of the speed with which Internet-based businesses develop, if you get there first, you do better. Really, you still need to have a viable business model and some proof of concept in order to gain and hold your share of the market," Vidmar notes.

The strategy has been working admirably and success stories abound. Take SalvageDirect.com, for example. This 20-month-old dotcom is an Internet business-to-business marketplace that provides insurance companies with a more profitable and efficient method of marketing specialty salvage vehicles, mostly wrecked cars and motorcycles, to licensed dealers, dismantlers, and rebuilders. This Titusville-based company is currently the number one totally on-line interactive Internet auction venue for specialty salvage vehicles, a $3 billion-a year industry.

Robert T. Joyce, SalvageDirect.com founder, owner and operator, says he met with Vidmar last August. "We needed both capital and business advice. John helped with strategic planning development and Ben Franklin introduced us to investors. They also put us in contact with local vendors to help with our outsourced needs."

The Penn State Ben Franklin program also provided SalvageDirect with $85,000 immediately and, more recently, with $250,000.

To date, since start-up, SalvageDirect has sold about 500 vehicles and is currently selling between 50 and 100 per month since developing their business plan with Ben Franklin help. Prices for the vehicles varies.

Joyce says, "We really want to target specialty vehicles, those that people want to travel for. Typically, a Chevy Cavalier is not a car people will travel for. But they will travel for a late model SUV or a BMW. For one of these specialty vehicles, the average selling price approaches $5,000."

The company currently has five employees but Joyce sees potential for expansion to 15 in the not too distant future. Other e-commerce companies dot the Ben Franklin 34 county service area.

--eCalibration.com (www.ecalibration.com) Jim Erickson, State College business to business vertical trade community for the measurement equipment calibration industry

--ePlans - Raymond Hedger, Jr., Harrisburg developer of PC and internet-based profit sharing and 401(k) deferred compensation plans for small businesses

--TruckWeb USA (www.truckwebUSA.com) Louise Bertothy, Phillipsburg developer of Internet portal for trucking industry

--Thornberry Ltd, www.thornberry.com Thomas Peth, Lancaster developer of an Internet version of a patient treatment and assessment tool.

Vidmar notes, "We're not going to abandon our manufacturing clients. We're still here to help identify, nurture and assist all early-stage businesses in our service area."?

However, "We've been approached by a significant number of entrepreneurs with e-commerce ideas or Internet enabling technologies - and the quality keeps getting better all the time," he adds. "It's an exciting time and the situation changes every few months. No one know the rules but we're keeping up with the changes every few months and can match projects with investors."

The Ben Franklin Technology Center of Central and Northern Pennsylvania Inc. is a subsidiary of the Corporation for Penn State. With support from the statewide Ben Franklin Partnership, the Center provides financial resources on a project basis to develop new or improved products or processes; create new jobs; retain existing jobs and attract investment capital to Pennsylvania-based companies. The Center funds the TBSN to assist early-stage companies.

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Contacts:

Barbara Hale (814) 865-9481 (o)/ (814) 238-0997 (h)

Vicki Fong (814) 865-9481 (o)/ (814) 238-1221 (h)

EDITORS: John Vidmar is at (814) 863-1299 or by email; Vic Russo, BFTC director, is at (814) 863-4881 or by email; Robert T. Joyce is at (814) 827-0300 or by email.