Gino Picasso (WG, í85) Brings New Technologies to Market
Wharton Club of DC Alum of the Month, July 2005
By A. J. Schuler, Psy. D. (W, í88)
We talked with Tom Faulders of LCC International about the wireless industry back in February, and this monthís dynamic interviewee, Gino Picasso, has even more to say about what is perhaps the fastest moving and most fascinating industry segment around today.
How do you create and find new market niches to exploit new technologies? Find out from Gino below.
We met over breakfast in a local cafť in Bethesda, and Gino was so excited talking about technology, his motivations and his passion for his work, he barely had time to eat.
My apologies, Gino: we owe you a breakfast!
AJ: What is your current company?
GINO: I actually have two: I started Global Telecom Ventures about a year ago and just recently joined forces with Chesapeake Partners.
I founded GTV after coming out of the satellite industry, because I saw an opportunity to do consolidation of certain elements of the industry. Working with a private equity firm in New York, we targeted our particular platform company to act as the first of a series of acquisitions. We should complete the first acquisition within the next month or two.
Weíve taken on some other projects through GTV. Once we got started, people began bringing me business plans. Now, I love technology. I love anything to do with technology and any stage of technology. The business just fascinates me. So in a couple situations, I have joined advisory boards. We actually just closed this week on the investment in a startup, where Iíve known the entrepreneur for about ten years.
AJ: What about Chesapeake Partners?
GINO: Iíd been working with GTV for about eight or nine months. A mutual friend then introduced us to Mark Fuller and Jack Crowley of Chesapeake.
Mark and Jack had gotten together a couple of years ago to establish Chesapeake Partners, and as it turned out, our business models were very similar. However, they had a particular model that I really liked: using consulting as a to get closer to opportunities for investment. Relative to our GTV model, they had a model that was more self-sustaining, in the sense that consulting work generates more opportunities. I really liked their model, and joined them three months ago. But through both vehicles, we maintain the same ultimate mission.
AJ: Just two different platforms.
GINO: Yes, slightly different platforms. But in effect, weíve all joined forces. All of us have a tremendous amount of operating experience: we have run companies, large, small, everything in between, and have done very large placements, small placements, and so have a lot of M&A experience. We share complimentary backgrounds.
AJ: Before taking on these projects, you had been in the satellite industry, and had been CEO of Iridium. What can you say about the experiences that have led you to this point?
GINO: For me, Iridium helped round out my experience in the satellite business. I had spent the early part of my satellite experience in whatís called fixed satellite services.
With fixed satellites, the recipient of information is stationary: itís in a fixed location. Fixed satellite services are used most widely for video transmission. About 85 percent of everything transmitted over fixed satellite is video; data comprises the other 15 percent. I spent a lot of time in that world. I ran a company called GE Spacenet, which was dedicated to the data side of fixed satellite services.
Four years ago, I had the opportunity to run Iridium, which was just emerging out of Chapter 7 bankruptcy. I was initially very skeptical about it because of how bad things had been. I was also skeptical because the business required a huge infrastructure, which would require a lot of continuous investment to sustain. But as I examined the business, I found we had a very, very specific niche, and it had phenomenal potential.
I took over and really focused the business on niche markets that we could uniquely serve. The results turned out to be fantastic. We brought the company to positive cash flow. On a run-rate basis,the company was also set to be income-positive.
AJ: What was the key to turning that around?
GINO: Recognizing what the market niche was. Technologies have natural fits, if theyíre going to fit at all. Thereís nothing magical about it. Most technology businesses are run by technologists who have a great vision for a grand technology, but they often forget what their market is. They misunderstand who is going to buy and why. To build a successful technology business, you really have to focus on that.
I love technology, but my real love is seeing technology actually used by people. And wow: thatís a good formula for making money. If people want it, theyíll pay for it. And if they pay for it, youíll make money out of it if you know how to run it. Once I understand how technology can be used, and once I can I see the match, I really just take off on it.
Thatís what we did at Iridium, and once we identified our niche, we spoke directly to our buyers. Whenever I was asked to speak, I would bring my cell phone and an Iridium phone. Of our phone, I said, everybody thinks itís a brick. And holding it up next to a cell phone, it was. And then Iíd point to the cell phone and say, if you have this and it satisfies your needs, you will never use Iridium. Case closed. But then I would bring out the other laptop-sized terminal our customers were currently using to meet their needs. Then I said, would you rather have your Iridium phone for a buck-fifty, or would you rather have this other platform for three dollars a minute?? That effectively dramatized our value proposition.
So, identifying our niche was one key. The other key involved actually reaching our target customers. For us, this was a huge challenge, because we did not have one easy access point; there was no single, very large market. Our customers were all different sets of people with different ways of using the technology.
AJ: Uh oh. . .
GINO: We could not do mass marketing. So early on we worked to identify who distributes to these markets, and then we used and leveraged those distribution channels. Once we did that, it worked beautifully. Once we started growing, the challenge became one of gaining further penetration. Technologies always have uses that people donít exploit, so you have to become an evangelist for your technology.
AJ: I know I underutilize my Treo: I only use a small fraction of the applications available to me.
GINO: Hey, Palm is still happy: you bought it--your Treo! Iím talking about when you donít even know that you want a Treo. Thatís really when you have to become an evangelist for a technology, and thatís the absolute toughest job in the world. If I see a technology that doesnít have a natural fit, and the job ahead of you is one of pure evangelism, I generally do not go for it--thatís really tough to do successfully.
However, if you already have a technology that has a natural fit, it has a natural market then capturing the new markets is gravy. Ninety percent of the time there are opportunities to be able to do evangelism of the technology in new areas. Thatís a very tough job, but itís also an interesting job. When we got to that point with Iridium, thatís when I saw some new opportunities to do consolidation in other parts of the industry, which led to the formation of GTV.
AJ: So now, as you create new markets for technologies, youíve got to get past the innovator level to hit the early adopters, find out who they are, so you can put the whole diffusion curve to work for you.
GINO: Youíve got it, exactly. The missionary work is to get the early adopters, but one of the big dangers is that you will do all the evangelism and somebody else will take over the market youíve just evangelized. You spent all the money and effort creating awareness and creating a fit for a technology, but there are real dangers: how do you do that evangelism and subsequently win the market? Once youíve done the evangelism, you have to mold yourself fast enough to be the right guy to buy from, because the second guy around will have learned from watching you.
AJ: Someone else will have 2.0.
GINO: Yes, you will have 2.0 at your back. So if youíre not already thinking about how youíre going to learn very quickly during the evangelism phase to make it mainstream, youíre going to get killed. All your work and all your hard effort and dollars will have gone to the benefit of the guy who invented 2.0. It happens all the time. But I love the challenge of doing it right.
AJ: Is there anything youíd like to say about your family life, for those who may have known you back in the day at Wharton?
GINO: Iíve been married now to my wife, Linda, for almost 25 years. We have three kids, and Iím a true Penn alum: the two who are college age are at PennÖ by their own choice.
AJ: No prompting from Dad?
GINO: (laughing) Of course there was some work that went on throughout their lives to tell them how great Penn was, but they did choose it. My oldest son is at Wharton now, double majoring. My daughter is going to be a sophomore in the College, studying psychology. My youngest is still in high school.
AJ: Do you have any hobbies or special interests?
GINO: I love cycling. I do century cycling: that means I do hundred-mile ride races.
AJ: Whom do you admire?
GINO: It will sound off the wall to most of the audience: Jesus Christ.
To me, my faith is extremely important. That is probably the core of me and who I am. And what the Lord was able to do in three short years by really pouring himself out for people, it gives me as an executive the perfect model for how I believe a business leader should be. Now a lot of CEOís think of their position solely in terms of personal power. But the most successful executives, in my view, are those who really pour themselves into the people that work for them, because the employees donít work for the CEO. In fact, the reverse is true.
One of the great privileges of my career is that work that Iíve led has had a huge impact on peopleís lives. At Iridium, one of the finest moments of my career was getting a call from the head of DISA (Defense Information Systems Agency). DISA is the procurement agent for all things telecom for the Pentagon. I got a call from two weeks after September 11 to tell me how valuable our services had been on September 11th and thank the people at Iridium for the incredible work we had done. Knowing that we can make a huge difference in peopleís lives is the greatest satisfaction.
AJ: Is there any particular lesson learned or ďa-haĒ youíve come to in the last year or so?
GINO: Iíve thought a lot about the next level of understanding my role as a leader. Iíve always been very focused on helping people develop themselves in a career and in organizations. But now Iím thinking about applying the same practices and principles outside of the business context, outside of matters that relate to my own goals.
The ďa-haĒ out of that is that, as much as I talk about technology and my passion for it, what Iíve really discovered is my greatest passion is seeing people grow. When you see a person turn around or a person suddenly walk with a skip in their step, and youíve been a part of it, thereís no greater satisfaction. And so now Iím spending more time thinking about ways I can use the skills that I have to do philanthropic work.
AJ: Are you involved with any volunteer organizations, charities, or foundations that youíd like to mention?
GINO: Iím very heavily involved with an organization called Opportunity International.
Opportunity International is a microfinance institution (www.opportunityinternational.org). They provide very small loans to underprivileged people all around the world. For example, a loan of $100 might go to buying a sewing machine and setting up a shop for an entrepreneur in a village in Ghana. I got involved with them about three years ago because they had some technology problems, and now weíre working on a project that I hope will provide new technical infrastructure to support micro-lending in developing nations.
Theyíre helping people become businesspeople. Itís a non-profit because we get donations, but the loans are for-profit; theyíre self-sustaining. I would encourage people to get educated about what theyíre doing because itís a way of being able to make a huge difference in peopleís lives. If you give, your money will continue to work for years on end, because the loans cycle for four months and then a new loan is given out. As a result, whatever you give is constantly turning and constantly helping a lot more people.
AJ: Is there anything else youíd like to say to your fellow alumni?
GINO: Oh, I appreciate the time youíve taken for the interview. I would like to make one little plug for the Wharton School. The Wharton School transformed me. It was not so much the education, though of course it was a wonderful education, no doubt about it. But the real difference involves Wharton alumni, and the caliber of people that I met through Wharton. Thatís something I think a lot of us overlook.
I fear that a lot of folks leave Wharton and do not take full advantage of the alumni network, which I believe is the most powerful thing that we have at Wharton. Wharton provides an extraordinary business education, but other schools do that as well. But I really think we have the edge when it comes to the alumni experience, the caliber of people we have at our collective disposal. I find that incredible.
AJ: Thanks again for making time for us at the Wharton Club of DC.
GINO: My thanks to you.
A. J. Schuler, Psy. D. is an organizational development consultant and executive coach. He is the author of the forthcoming book, "Revolution: How to Transform Your Company from Within."