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New products are being nurtured locally

| Thursday, Sept. 25, 2003

Upon leaving Fore Systems in 1999, the five founders of Laurel Networks Inc. had in mind a new networking device to enable phone companies to better generate revenue from the emergence of high-speed telecommunications.

A continual process of translating customer feedback into engineering refinements led to the introduction of its flagship router two years ago.

Today, Laurel is generating revenue at an increasing rate and has recently landed a fourth round of venture capital financing of $20 million, a remarkable feat in an industry that has been decimated since the bubble burst on that industry in 2000.

Laurel's story of successful new product strategy is one worthy of repeating. Now, there is a group dedicated to providing a forum for area professionals whose job it is to develop and market the products around which the region's economy can grow.

Dubbed the Pittsburgh Product Strategy Network, the group has gained a large and loyal following in its first months of existence.

The network sponsors forums where product managers and marketers share their experiences in bringing new products to market.

Ideas from the group's forums are put into writing and cataloged on its Web site.

It also produces a newsletter with articles on subjects related to product strategy, and has implemented a mentoring program whereby product executives new to the area are linked with an established executive who helps the newcomer make appropriate contacts in the community.

Chris Gormley, vice president of product management at FreeMarkets Inc., said the value of the network is in the ideas that are shared.

FreeMarkets over the past few years has been evolving from a single offering company to a provider of a full range of software and service solutions for global supply management.

"There's not a lot of places to go to learn to be a good product manager," he said. "The expertise is out there, but it's dispersed. Before now, nobody had marshaled the effort to bring it together locally."

The network's founders are Jim Berardone and John Zappa. Berardone, the group's president, has been involved in bringing new products to market in the region's tech sector from its beginnings at companies like Industry Net, as well as local subsidiaries of tech giants like Perot Systems and Fujitsu.

Zappa, the group's vice president of operations and products, has been managing technology products for 11 years at Pittsburgh companies like Management Science Associates, Legent and ServiceWare. He is now managing director of business consulting outfit Beechwood Consulting.

"There isn't one word that describe us well. 'Technology product commercialization' is a phrase we use," Berardone said. "Our group is really comprised of the people that take products to market and are responsible for product success in the marketplace, not just the development side."

It's a common lament among local economic development officials when citing the region's shortcomings: the Pittsburgh-area is chock full of research at its acclaimed universities and institutes, but has fallen short when it comes to new product development.

The latter is what creates new jobs and wealth and is what is needed for Pittsburgh to return to the position of prominence it once held when its mines and mills helped build and power the nation.

"If I can share best practices with a start-up to help them produce a better product more focused on their target market, that's what the group is all about," said Shane McCleland, director of product marketing for the Broadband Routing and Switching division of Fore's successor, Marconi, based in Marshall Township.

McCleland isn't alone in praising the network.

"The sessions provided by PSN have been consistently informative and enjoyable, which is not always the case with events held by other groups," said Gary Rosensteel, chief operating officer of start-up Vevolution, a Pittsburgh-based maker of marketing software.

Paul Adam, manager of product development productivity at medical device manufacturer Medrad, said the need has long existed for a group like the product strategy network.

He said it should have a positive impact on product innovation in the region.

"Established companies tend to get comfortable with minor product enhancements and continuous improvement," he said. "While this may lead to decent business growth in the short term, it provides competitors the opportunity to innovate highly differentiated products and take significant business away in the long term."

Eventually, Berardone said, the group will begin charging for memberships. He would also like to put on an annual trade show.

Additional Information:

Product pioneers

Product development and marketing executives from Pittsbugh's hottest start-up companies, including two, Renal Solutions and Laurel Networks, that have recently landed a combined $38 million in venture capital, will share their thoughts on how they are pioneering entire new product categories. The event is tonight from 6-9 p.m. at the Renaissance Pittsburgh Hotel.

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