Moreover, even in towns more predisposed to change, the local government rarely has the ability to turn on a dime. "Our board's not divided. We move quicker than most towns," says Doylestown, Pa., borough manager John Davis, Yost's point of entry in the town where his meters are manufactured. "But there's a need to move slowly, if only to gain consensus among the 8,500 borough residents." Two weeks before demonstrating his meter in Bier's Camden office, Yost called on Davis. It had been six months since he first demonstrated his meter in Doylestown, and the borough now wanted to take him up on his offer of a free test of the meters on its streets.
Here's what Yost is looking at, under a best-case scenario: Having talked Doylestown down from a one-year test of 75 meters to a three-month test of 25, he will deliver the units in the spring of 1997, after the winter snows have melted. If the meters perform as advertised, Doylestown will keep them, paying Yost a rental fee, into and beyond the approval of the next budget in October. "We could order the meters, probably 100 or so, in December," says Davis. Yost would get paid early in 1998, nearly two years after his first demo in Doylestown.
"We find that two years is the minimum," says David L. McNeff, vice-president of sales for Printrak International Inc., of Anaheim, Calif., which sells automated fingerprint-ID systems to government agencies, including cities. "You miss an annual budget, you lose a whole year, and it's not unusual for that to happen two or three times."
Even when money is budgeted, entrepreneurs face one more speed bump--the democratic safeguard known as the request for proposal (RFP). Even in a situation like Yost's, where he's currently the sole source of a particular product, a municipality must advertise in search of the lowest responsible bidder, stating its specific needs-- x number of units capable of doing y. At least a month--often three months--goes by before a contract can be awarded.
"I kid you not, this is not an easy place for an entrepreneur," says Frances Burke, a professor of management at Suffolk University's Sawyer School of Management, in Boston, and a consultant specializing in business-to-government relations. "Remember, you're dealing with things that are positive in a democracy. Every step of the way, you have to have openness, so the citizens who are paying for this $400 meter, as opposed to a $150 meter, know there's no hanky-panky, that the taxpayers' money is being spent efficiently." She's equally certain of something else: selling to cities, versus selling to business, "really is apples to oranges."
There is one bright spot in this rather gloomy parallel universe: cities are sheep. Persuade one or two key municipalities to sign on, and more will follow. Bigger orders spell manufacturing efficiencies, which enable price cuts, which help facilitate future orders. Yost can see the light off in the near distance. His plan is this: manufacture 200 of his new and improved meters and seed the market with them in 1997. (Why not build 500 meters and thereby increase his odds of success? "That," he insists, "pushes considerably forward the time I run out of cash and puts tremendous stress on me to get things done." He's acting on a real fear rather than on as yet unheard competitive footsteps.) Yost believes that if he can limit a city's test to three months, the same meter might realistically be used in trial runs in three cities. And if he can restrain the requests of big cities and hold small cities to 10 meters a test, Yost thinks he can arrange as many as 15 on-street trials.
Most important will be his return to New York City, home to 70,000 meters and a decentralized Bureau of Parking with an annual budget of $100 million--and even its own research-and-development facility. "We're more like a Fortune 500 company," says the bureau's executive director, Larry Berman. He adds, "The city lets us manage our own resources. They don't micromanage." Bingo: a portal back to a more businesslike sales universe. Berman has both the funds available for a Big Applesize "small order," say 3,000 to 5,000 meters, and the inclination to place one. "The first version produced some interesting data for us," he says. "We need creative solutions to replace people we can no longer afford." He cautions, however, "We're very thorough in New York. We need to prove everything every step of the way."
Will Yost's 200 new, improved seed meters bear fruit? Can he--will he--be firm? Beverly Hills has told him it would like 20 of the new meters for at least six months. New York City wants 75 for six months. "How can he push it forward?" says Printrak's Dave McNeff. "I wish I knew. The fact is, most of these agencies move at the speed they do. As a larger, established company we can survive that better than the guy who is trying to get off the ground."
Yost knows that only too well; it's one sharp horn of his dilemma. On the drive home from Camden he breaks a reflective silence: "So, one more day the sun will set and I will think, 'I've got to crack this nut."
John Grossmann is editor and publisher of NewsReach, a monthly small-business newsletter based in Jamison, Pa.
Executive Summary
COMPANY: Intelligent Devices Inc., in Harleysville, Pa., founded in December 1994
CONCEPT: Make an intelligent parking meter that senses the arrival and departure of cars
PROJECTIONS: 1997 sales of 2,000 to 5,000 meters, with $800,000 to $2 million in revenues; double that in 1998
