Deal-making: Part 2

The first time I used a model to swing a deal is blogged below. The next time this sneaky technique was employed was in my first patent license deal based on our shaped-crystal growth process: but first a bit of background.

 

I forget how it came about, but the New York Times picked up on our activities, the fruits of which were some amazingly long and intricate constant cross-section sapphire crystals, grown with great dexterity from molten alumina at over 2040 °C  (white heat!)  by my young colleague and protégé, Harold LaBelle. The NY Times reporter was intrigued, but also savvy enough to ask what applications there might be for such crystals. Not suffering from excess bashfulness, I reeled off, extemporaneously, of course, a list of ‘applications’ that somehow managed to include an everlasting razor blade. No surprise that the following Sunday, we featured prominently in the Times, the razor blade idea being accorded pride of place. (Actually, since sapphire has a low coefficient of friction, exceptional hardness and extraordinary wear resistance, maybe, just maybe….)

 

The article generated lots of interest, but not a whisper from Gillette. OK, so who, we asked ourselves, is an Avis to Gillette’s Hertz? (Remember when Avis used to try harder?) We decided to target Gem, a razor blade manufacturing subsidiary of Philip Morris (yes, the tobacco giant, but before smokers knew the severe hazards of their addiction) although we were, to any objective observer – not including ourselves, of course – far, far too early in the technology development to merit being taken seriously.

 

Off we traipsed to Richmond, Virginia, armed with hastily grown sapphire ribbon-like crystals roughly in the form of long single-edged razor blades, and a (grossly inaccurate) estimate of the time and cost to perfect the technique and to bring the price per blade down to what we imagined would be an acceptable level. (Ah, the refreshing naïveté of youth and inexperience: so much more stimulating than the somber face of jaded professionalism.)

 

Because the tech-stuff we described to the Gem engineers was leagues more exciting than their usual diet, we encountered not the NIH (not-invented-here) Syndrome of a Gillette, say, but rather an enthusiasm that transcended their habitual engineering torpor.In fact, everything seemed to be progressing smoothly, and uncharacteristically swiftly, until: enter the sharp-faced eyeshade wearers to discuss the financial details of a possible deal, most notably the matter of license royalties.

 

The concept that had emerged from the discussions with the techies and the marketeers was a one-piece razor comprising a fancy plastic handle bonded to a sapphire single-edge blade. It would be advertised as ‘everlasting’ – as older versions, at least, of the wedding ceremony also proclaimed.

 

OK then, we needed to agree on a royalty rate (1%? 3%? 5 %?), but as a percentage of what? We, of course, sought to make the royalty base the net selling price of the fancy ready-to-use razor; they, no surprise to learn, insisted that the royalty base be the cost of the sapphire part only. Reasonable? In a pig’s eye! Since they would be manufacturing the blades, even if we made the pre-sharpened ribbons, they could assign an arbitrary ‘cost’ to the blade, making it a very small fraction of the selling price of the sexy razor. Our royalty would then be a very small percentage of a very small percentage: phooey!.

 

My youthful chutzpah not having been seriously eroded, I insisted on talking to THE boss-man, a very senior Philip Morris executive, maybe even the President. This was neither a request for which they were prepared, nor one with which they could quickly comply – luckily for us, it turned out, since we needed some extra time.

 

For this crucial meeting, probably to be scheduled for no more than 15 minutes, a show-and-tell deal-unbreaker would be needed: no trenchant arguments, no how-can-a-giant-like-you-beat-up-on-a-small-company-like-us sort of thing, no verbal foreplay, just one swift knockout punch. Call in the model-maker!

 

The prop I decided on was a sapphire-bladed model of an old-fashioned ‘cut-throat’ razor with a teak handle, to nestle, of course, in a red velvet-lined teak box. (From the previous blog you now know what razors and thermoelectric generators can have in common.)

 

Wonderfully ingenious Harry LaBelle figured out how to grow a long sapphire crystal with the same cross-sectional geometry and dimensions as the blade of a classic ‘cut-throat’ razor, but with a rounded rather than a sharp ‘cutting edge’. (We couldn’t afford the risk of a slashed Philip Morris exec, and anyway, we were far from being able to put a seriously sharp edge on our crystals.) Notwithstanding its tenuous relationship to the goal of the actual project – but that was for said exec to fathom – the result was a thing of beauty.

 

Back, then, to Richmond with the precious prop, and to a room full of weasel-faced nay-sayers  arranged in an arc around the massive desk and presence of  ‘His Nibs’ the unmentionably senior Philip Morrisite. “OK gentlemen” he said, but in a tone that made ‘gentlemen’ sound more like an insult than an approbation, “what’s the issue?” He was addressing his cohorts, but focusing on the box that I was slowly unwrapping. The senior eye-shaded cohort ranted on about the unreasonableness, illegality even, of our demand that the royalty base on the to-be-developed ‘everlasting sapphire-bladed razor’ be the net selling price of the whole fancy razor, and not just the novel blade. But by then, the exec had the box in his hand, had opened it, had carefully taken out the ‘razor’, had run his manicured fingers along the shiny sapphire ‘blade’, had held it up admiringly to the light, and had acquired that visionary demeanor to which only the most overpaid execs are allowed to aspire. “Give them what they’re asking”, he proclaimed: exeunt the corporate plebes, spluttering and muttering, but to no avail.

 

Said I: “May I be allowed, sir, to request that you keep, as token of our appreciation, the …, the….”(What should I call it? Not ‘model’ surely.) No need to worry: his piercing stare defied me to request the return of whatever it was to be called.

 

At the negotiated royalty rate of 4%, we would have attained wealth beyond the dreams of avarice – if only the damn project had been successful. But then, us research types are, well let’s hear it from the thrice-married but still virginal Ms. Smith: “Married for the third time?” expostulated the incredulous gynecologist. “Well”, said demure Ms. Smith, “my first husband was killed in a car accident on the way to our honeymoon; my second husband may have had a stiff you-know-what, but his wrists were big-time limp; and my present husband is an R&D Director who keeps telling me how good it’s going to be when it happens.”

 

OK, a flippant account, this, but of actual events – and with a powerful message. Maybe professional intellectuals, philosophers and the like, can ‘buy’ an idea from words alone, but most men/boys (women are less likely to still be girls) often need a tangible something to open the clogged passage through their cynical ‘yea, tell me another’ attitude, the metaphorical Kevlar vest to protect them from idea salesmen. That ‘something’ will best be a physical model that can be played with, e.g. disassembled and reassembled, or at least a ‘toy’ that can be handled and admired. What it really is, in context, is a metaphorical drill to burrow through the veneer of adulthood into the spontaneous receptivity of the youthful mind.  (Wow! Did I say that?)

 

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Comments

[Guy]

Couldn't agree more. We just sent one of our companies overseas to talk with the gaming industry. When we made initial calls, I finally realized why they call them 'cold'... But once they got past the doorstep with a shiny working prototype, they had a hard time getting the device back. Guess what? They are now ready to talk business.

[Colin Wright]

I may be thick (especially as I don't know how this system works). This is intended to be a reply to the item on everlating razor blades. I was confused by the final paragraphs of the piece, not being sure what was being said. I thought that this contributor was going to conclude that Gem, or Philip Morris, was going to give the developers anything they asked for because they had no intention of marketing an everlasting blade. One thing the razor comanies NEVER do is advertise on the basis of longevity of blade. If they wanted to, they could undoubtedly make blades that would last far longer than they do, by using well known hardening tequniques. There is evidently a gentlemens' agreement in place that they will leave blade life out of the advertising equation. So if presented by such technology, they would buy it and then suppress it.

[AHH]

A very nicely told anecdote on the value of model making. A pleasure to read.

[Daniel Nerezov]

Brilliant story telling!

[Bryan Fickett]

Greetings from a fellow crystal grower... I began my career at Saphikon in the 80s. Over the years, I have heard the legend of the everlasting razor blade many times. I'm glad I stumbled upon your website and got to hear this wonderful anecdote firsthand. Did you produce any functional blades?

[jordan 1 flight low]

But if the while I think on thee, dear friend, all losses are restored, and sorrows end.Do you like it?