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Company:
Caliber Design, Inc.
231 West 18th Street
Suite 3
New York, NY 10011
Telephone: 212-823-1000
Contact:
Paul Willingham, President
Telephone: 212-823-1000 x34
pwillingham@caliberdesign.com
Type of Business
Caliber Design is an Application Service Provider (ASP) that
provides mail order telephone order (MOTO) companies with
the technology to unite their call center’s order taking and
customer service functions with a web storefront. Our clients
benefit from our knowledge and expertise of web and MOTO integration
and are able to control more precisely the total cost of technology
ownership through scheduled payments. We are seeking expansionary
venture capital to so that we can roll-out, improve, and support
our web/MOTO technology.
Company Summary
Caliber Design was incorporated in April of 1995 and is a
Delaware S corporation registered in the State of New York.
We have developed an ecommerce application that unifies a
company’s call center, web storefront, distribution center,
and inventory databases.
The web storefront and MOTO operations are fully integrated,
meaning the inventory data, customer data, and transaction
data are all available through a simple web interface. To
access this interface requires only a standard web browser
and an Internet connection. The result is increased speed
of order processing, elimination of redundant data entry,
real-time reporting, and just-in-time inventory management.
Our product exists and is currently deployed on two sites:
lang.com and massquantities.com. Lang.com is a high volume
site processing 1000+ transactions per day during peak periods.
Mass Quantities processes 30 transactions per day.
The Market
Strong Demand in the Direct
Marketing Labor Force and the Tight Labor Market
The direct marketing industry’s labor requirements are expected
to grow by about 4.2% per year over the next five years. With
the existing shortage of semi-skilled workers in the labor
market, most companies will have a difficult time staying
on top of staffing requirements. Caliber Design’s technology
can help companies do more with a smaller work force. Our
MOTO ecommerce application allows companies to shift revenue
streams from labor intensive non-automated telephone order
taking to less labor intensive web-based and online order-taking.
Caliber Design’s MOTO ecommerce application helps the direct
marketer’s sales force increase profits and work more efficiently
in two ways. First, we have the skills in-house to create,
manage, and run a high-volume ecommerce web site. An online
sale requires less effort at the order-taking phase than the
same order taken over the phone. Second, Caliber helps businesses
reach new customers, reduce call time, and improve service
at the direct marketer’s call center.
In 1999, more than 14.0 million workers were employed throughout
the US economy as a result of direct marketing activities
– 7.8 million in consumer direct marketing and 6.2 million
in business to business. This includes only advertising and
selling jobs and does not include for example jobs associated
with direct marketing secondary suppliers (i.e. suppliers
to suppliers).
From 1994 to 1999, employment in direct marketing increased
by 5.6% per year, over the next five years, forecast for growth
are 4.2% per year. In contrast, total US employment grew by
2.2% from 1994 to 1999 and is expected to grow by only 1%
per year from 1999 to 2004.
In 1999, U.S. unemployment hit a 29 year low of 4.2%. The
difference in available labor versus the market need is driving
the trend for direct marketers to substitute technology for
labor. This substitution takes the form of databases, marketing
automation, interactive marketing, etc.
Caliber Design’s Position
Recent market research by the Direct Marketers Association
indicates that a full 78% of catalog shoppers have never purchased
through the Internet (2). In 1999 there was about $11 billion
in “interactive sales” (i.e. sales over the Internet). By
2004, this number is expected to increase 50.2 percent per
year reaching $84.4 billion in five years. The anticipated
convergence between MOTO customers and ecommerce customers
indicates the enormous market demand for a unified solution.
And, of course, we are looking only at the domestic market
– the international market is just as impressive if not more
so.
Presently, potential clients for our software include: small-
to medium-sized mail order/phone order businesses that want
a web presence, sites already running Intershop without MOTO
integration, and existing ecommerce sites without MOTO integration.
In phase two of our product’s development, we plan to offer
a MOTO ecommerce solution to large companies. In phase three,
we plan to offer a MOTO ecommerce solution to very small companies,
solo professionals, and entrepreneurs.
Currently, there are three market segments of potential
clients for Caliber Design’s service.
The first class is small- to medium-sized mail order/phone
order businesses that want a web presence. Our client The
Lang Companies is a medium sized company with a successful
mail order business in the gift and collectibles industry.
They turned to us for automation of their call center and
development of their web presence – lang.com. Our technology
currently powers all of their business-to-consumer transactions.
We are studying a solution that will allow our MOTO ecommerce
technology to power The Lang Companies’ business-to-business
transactions. Our technology already powers Mass Quantities
business-to-business transactions for supplements sold to
gyms, spas, and health food stores.
The second class of prospective clients is sites already
running Intershop but need MOTO integration. Intershop currently
has an installed base of 20,000 according to their sales figures
making this a fairly large market segment. This is the situation
my company Mass Quantities found itself in several years ago.
We had a successful web site running Intershop, but no means
to profit from the non-web customer. Our technology allowed
Mass Quantities to sell to the phone customer as well as the
web customer and provide unparalleled customer support.
Finally, there are those businesses that already have a
web presence but are not currently taking phone or mail orders
and are not running Intershop. The advantage to these clients
from migrating to our technology is our ability to offer more
features, specifically , MOTO integration, than those that
are currently available in entry-level ecommerce packages.
In phase two of our product’s development, we plan to advance
the product’s feature set and further develop our technology
to make our solution applicable to large companies. In phase
two we will focus on expanding the scalability of the product
and abstracting the database dependence away from the core
logic so that enterprise-level customers can take advantage
of their unlimited Sybase or Oracle licenses. In phase three
of our product’s development, we plan to make our technology
available to the small entrepreneurs who are looking for the
least expensive selling solution with a complete turnkey MOTO
ecommerce product. The model we are pursuing with phase three
is the model that Yahoo has created with their Yahoo Store.
We will offer low cost, low support ecommerce solutions with
the added enhancement of MOTO integration.
Summary
In looking at direct marketing growth in the areas of employment,
revenue, and advertising spending, all three areas outpaced
total US economic growth. The strong demand for direct sales
labor combined with a shortage of workers will make for optimal
business conditions for large investments in productivity
enhancing technology like the Caliber Design MOTO ecommerce
application.
This is what we experienced with The Lang Companies. In
1998, before using our technology, The Lang Companies had
a holiday season in which demand so outpaced their ability
to handle the calls that, according to President Bob Lang,
15,000 customer order phone calls went unanswered by their
order center during the three-day weekend after Thanksgiving.
For the holiday season of 1999, according to Cliff Haggenjos,
The Lang Companies director of fulfillment, they experienced
a 300% increase in efficiency. During the 1998 holiday season,
The Lang Companies processed 300 to 400 orders per day; in
the 1999 holiday season, The Lang Companies processed 900
to 1000 orders per day. Of key importance here is that this
astounding increase in productivity was accomplished with
the same number of workers.
(1) Economic Impact: U.S. Direct Marketing Today, 5th ed.
Study commissioned by the Direct Marketing Association and
conducted by The WEFA Group. 1999 http://www.wefa.com/
(2) Interactive Marketing Buying Practices Study. Study
included a random sampling of 1,018. Phone interviews were
held between May and June of 1999. http://www.the-dma.org/services1/exsum/buyingpractices.shtml
(3) Study done by AMR Research in Boston, MA.
Management:
Paul Willingham
President, began Caliber Design in 1995 back when the Internet
was still young. He soon partnered with Andrew Bunner from
Netscape to create Mass Quantities -- a separate web-based
company that sells nutritional supplements online and became
a real world testing ground for our technology. Prior to
starting Caliber Design, Paul was the IT Director for US Concepts
-- one of the nation's top PR firms with clients including:
The Scheffeline and Somerset brands (Dewers, Johnny Walker,
and Tanqueray), Kimberly Clarke, Proctor and Gambel, and,
TNT. Prior to working as IT Director at US Concepts, he consulted
for three years at Goldman Sachs in software application support.
He has a degree in Economics from The University of North
Carolina at Chapel Hill.
Paul Dlug
Director of Information Technology, is a software engineer
with extensive experience in building large-scale web applications.
Paul directs programming and system administration for Caliber
Design. Prior to joining Caliber Design, Paul was the Director
of Engineering at Rampage Technology Group where he was responsible
for the creation of their web enabled payment systems. And
before Rampage, Paul was the senior developer for Star Media’s
homepage hosting service. He has also worked as the senior
software engineer at the Apocyber Foundation, a consulting
firm providing development services to a variety of web based
businesses.
Service and Competition
We know of no off-the-shelf web store solutions or ASPs that
provide MOTO ecommerce integration with a web storefront.
Our product is the most pure case of a market-driven technology.
When we set about integrating the MOTO and web sales for our
nutritional supplement company, we soon realized that we would
have to develop a solution ourselves. If another solution
had been available, we would have bought it.
Strategic Partnerships
Our goal is to solidify our relationships with our partners
so that we can engage in new cross-promotional opportunities
and nurture relationships with potential buyers for our company.
Of equal importance to cross promotional opportunities will
be building a system of rebates that encourage fidelity between
our partners and us. For example, if a lead from Intershop
produces a paying customer, we would like to be able to compensate
Intershop. The reciprocal is also true. If we bring more hosting
business to Verio, we would like a rebate as well. Mass Quantities
currently has a relationship of this sort with Cybersource
and we have found that it certainly encourages fidelity. This
contract between Mass Quantities and Cybersource more appropriately
belongs with Caliber Design. Mass Quantities will assign this
contract to Caliber Design.
The larger strategic partners (Sun, Sybase, Oracle, Cybersource,
Verio) whose technology we use or will use all have promotional
partnership programs that are already established. Membership
is free and partners are featured on the sites of these companies.
As these sites are highly trafficked, we believe they will
be an excellent source of prospects for our application. Our
strategic partnerships, that we intend to leverage, include
or will include:
Intershop
We have recently become an Integrated Intershop
Technology Partner. Intershop has given us their blessing
to use as much table space as required for further development
of our CRM application. This will obviate the need to use
MySQL in addition to SyBase making our application much more
scalable.
With our technology, Intershop becomes a
more valuable ecommerce platform. With their support, they
will be an excellent source for additional clients. Although
there are some Intershop hosting partners, there are few,
if any, turnkey Intershop ASP’s. There are no Intershop ASP’s
with MOTO integration. Intershop might be a logical acquirer
of Caliber Design.
Intershop powers over 100,000 stores and
are the leader in ecommerce software for small to medium sized
ecommerce sites. They are also gaining ground at the enterprise
level. A few of the companies running Intershop are:
Compaq, HP, SyBase, Bosch, Sony, Blaupunkt,
Canon, Ingram, Warner Brothers home Video, Nortel, Deutsche
Telekom, PSI Net, MOMA, Izod, Moterola, Mindspring, Mercedes
Benz, Concentric Network
Cybersource
Caliber Design is a Cybersource solutions reseller. Our MOTO
ecommerce software will run with Cybercash or any other payment
gateway. We prefer running our software with Cybersource because
they are cost effective, they are a preferred VISA partner,
have elaborate fraud screen technology, have a very well documented
API, and excellent developer support and post-sale customer
support. Cybersource recently asked us to develop the cartridge
that links their payment processing gateway with Intershop.
Quantum Art
We have recently partnered with Quantum
Art (www.artq.com). Quantum
Art is a development accelerator that uses overseas programmers
to cut development times and speed bringing technology to
market. Presently, Quantum Art is taking our MOTO Ecommerce
technology and turning it into an Intershop cartridge. This
will allow for it to be easily installed and easily sold.
In the second phase of our partnership, Quantum Art will enable
our technology to run independently of the Intershop platform.
Board of Advisors
Andrew Bunner is an ecommerce engineer with extensive
web-programming experience. Andrew’s specialty is in online
order systems and back-office integration. If you use Netscape
Navigator, chances are, you are already running code that
he wrote. Andrew left Netscape to partner with Paul Willingham
at Mass Quantities and later at Caliber Design where he is
currently a consultant. Andrew is presently the lead application
developer for Woosh.com – a wireless data solutions company.
He has a degree in Computer Science from The University of
Illinois at Urbana-Champaign.
Jevgenij Nikiforov is the president of Quantum Art
a technology accelerator in New York. Quantum Art maintains
relationships with a stable of programmers in Russia that
are used for enabling a technology to rapidly come to market.
We are currently in discussion with him about joining our
board.
David Silverman is the Manager of Business Development
and ISV Programs for Intershop. David has been a long-time
advocate of our technology and business model. We are working
with David to build customer relationships for our company
with the major Intershop ASP’s. We are currently in discussion
with him about joining our board.
LeBoeuf, Lamb, Greene & MacRae , L.L.P. is one
of the world's largest law firms with more than 750 lawyers
practicing in 14 U.S. offices and in nine countries overseas.
Founded in 1929, and headquartered in New York City, LeBoeuf
represents a diverse range of clients including e-commerce,
information technology, and interactive media.
LeBoeuf's private placement practice was established in the
1950's. Since the late 1970's, LeBoeuf lawyers have practiced
extensively in the private equity and mezzanine finance field.
The practice continued to flourish and has evolved in recent
years into a prominent practice with extensive experience
in the placement of private debt and equity in the U.S., in
European markets and in the emerging markets of Russia and
Latin America. The Firm also represents emerging growth companies
in raising capital and in planning corporate affairs to facilitate
financing, executive retention and growth.
David M. Grimes , Partner, Leboeuf Lamb
David regularly represents Internet and high tech start up
companies as a general corporate advisor on a variety of issues
ranging from employment agreements to stock option plans to
venture capital raises. The activities of these clients include
the operation of a generation Y portal, a facilitator of intrabank
transfers such as the sale of Brady Bonds and foreign exchange
trades, and the first internet marketing firm in China, among
others.
In the international arena, Mr. Grimes was one of the principal
attorneys representing Global TeleSystems Group, Inc., a NASDAQ
company, in its purchase of Omnicom, one of France's leading
telecommunications companies, and Oberthur Card Systems, a
French company in its £200 million acquisition of the U.S.
smart card operations of De La Rue plc. In addition, Mr.
Grimes represents buyers and sellers of distressed securities
and secured and unsecured sub-prime debt, including FirstCity
Financial Corporation (in acquisitions of French and Japanese
mortgage notes), Insignia Financial Group and Schroder, Wertheim
& Co. He regularly represents banks (such as Natexis
Banque and Crédit Agricole Indosuez) in workouts, secured
financings and letter of credit disputes.
Vivian Polak , Partner, LeBoeuf Lamb Greene &
McRae LLP
Vivian Polak is a partner with LeBoeuf Lamb. She is head
of the firm's Internet practice group, which has over 40 attorneys
with legal and business experience in Internet corporate finance
and venture capital, e commerce, content and intellectual
property issues, privacy, online marketing issues and information
technology.
Ms Polak has been involved with Internet industry and information
technology pioneers since 1985. Along with other LeBouef lawyers,
Ms Polak has worked on both the legal and business sides with
Internet, software and other high tech companies, from start
up phases through initial public offerings and into maturity.
Ms Polak has been involved in virtually every aspect of
Internet, technology and intellectual property law, providing
advice to Internet start ups as well as established non Internet
companies in the legal questions arising out of ecommerce
and presence on the Internet, counseling on the development
and use of software and on-line technologies, and the acquisition,
licensing and protection of intellectual property.
Ms Polak has expertise in counseling and litigation relating
to liability of website operators and ISPs; domain name disputes
and transfers; online sales and marketing, 'click wrap' agreements,
digital signatures, hypertext links, and employee use of interactive
media.
Morgan & Finnegan
Morgan & Finnegan is one of the largest and most experienced
law firms specializing in securing, protecting and litigating
intellectual property rights.
The firm has represented a wide variety of clients in all
aspects of intellectual property law including patents, trademarks,
copyrights, trade secrets, unfair competition and antitrust
matters.
Morgan & Finnegan has compiled a distinguished record
in patent and other complex intellectual property litigation.
Several of the patent cases litigated by the firm have achieved
landmark status.
Walter G. Hanchuk Partner, Morgan & Finnegan, L.L.P.
since 1992, specializing in patent infringement litigation
and in prosecuting patent applications in the U.S. Patent
and Trademark Office.
Walter's initial experience in intellectual property matters
included service as a Patent Examiner in the U.S. Patent &
Trademark Office. Walter has since been involved in the preparation
and prosecution of US and foreign patent applications in a
wide range of technologies, including computer hardware and
software.
Walter has been particularly active in successfully obtaining
patent protection for clients engaged in electronic commerce
and financial services. His prosecution and transactional
practice has involved the representation of clients such as
priceline.com, Walker Digital, NewSub Services, CyberSettle.com,
screamingmedia.com, Huntleigh Mutual Funds, and a host of
yet-to-be launched young Internet companies. Walter is a frequent
lecturer on the topics of the patentability of inventions
in computer software, e-commerce and financial services.
As a Morgan & Finnegan attorney, Walter has also been
involved in all aspects of patent litigation in federal courts,
including appeals to the Court Of Appeals for the Federal
Circuit. Walter is a member of the New York State Bar Association,
the New York Intellectual Property Law Association and the
American Intellectual Property Law Association.
Rami Wiluzanski is a licensed CPA since 1989 and
has been the Caliber Design accountant since its inception.
Rami was an auditor for Fred Meltzer CPA from 1989-92. Rami
has an MBA in finance from New York University.
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