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Tuesday, October 26, 2004

SmartData Goes Public
SmartData is Region’s 2nd Public Tech Firm
SmartData has gone public after completing a lengthy reverse merger process -- becoming just the second public technology firm in Northeast Ohio, I wrote in today's Plain Dealer. You can find Smart Data under its ticker symbol SDAI at Ottcbb.com, where over-the-counter bulletin board stocks are listed.

SmartData recorded just $300,000 in sales in the past 12 months, but it is hoping for revenue of around $2 million during this fiscal year, which ends in September. John Herda, SmartData's chief financial officer, said the $2 million the company hopes to raise would bring it credibility and money for new employees.


"The primary business reason for this is that we felt it would help us dealing with our customers," Herda said. "When you're a small shop, you occasionally run into that problem [of companies not knowing you]. It gives us a means to get information out to the public."

Herda also said the company will grow "several times" beyond its current 10-member staff in 2005. It will primarily add software developers and marketing employees.
Want to Know SmartData? Know Steve Belovich
Although I didn’t quote him in my story, SmartData founder Steve Belovich is the fuel behind almost every move his company makes. He’s an electric personality who is always doing something beyond the norm. SmartData has its own US Postal Service stamps (pdf), and Belovich is regularly handing out CDs of his band, The Rackhouse Ramblers.

Colleague Michael Heaton listed Belovich among a group of potential leaders back in 2002. Here’s an excerpt from Heaton's story:


"It's not fair to compare Cleveland to Silicon Valley or MIT in terms of high-tech industry," says Steve Belovich, the [then] 42-year-old founder, CEO and chief technical officer for SmartData, which has 11 employees. "But it is fair to compare us to Pittsburgh, and we're way behind them.

"The high-tech industry is a total mystery to the financial community here. And it changes so fast. When I was teaching computer engineering at Cleveland State, I would give the same test each year. And each year all the right answers changed."

In the early Eighties, Belovich was an assistant professor of electrical and computer engineering at CSU's Fenn College of Engineering. Eight years later, he co-founded BV Technologies, a profitable, self-financed corporation that twice won Weatherhead 100 awards for the 100 best growth companies.

"Stories about high-tech success here are like teenage sex. Wildly exaggerated," Belovich says. "What Cleveland needs is a $100 million-dollar information technology success story. It needs a business to serve as the model so that others can look and see it can be done. I feel like we have a shot at doing that. We're walking point, which we'd rather not do because that's where all the land mines are. But if we have to do it, we'll do it.

"I want SmartData to be the beacon of hope to this area," say Belovich. "I want people to look at us and say, 'See, it can be done.' "

Belovich says Cleveland doesn't compare to the West Coast when it comes to venture capital.

"When I call six venture capital firms in California with a business proposal, I hear back from all of them the same day. And some will apologize if they call back late in the day. If my proposal isn't their thing, they'll often refer me to another VC firm they think might be interested. There's an atmosphere of cooperation. They understand synergy," says Belovich, who lives in Richfield with his wife, Joanne, the assistant dean of CSU's Fenn School of Engineering.

"Try the same thing in Cleveland. It's like falling into a black hole. The attitude is startling," Belovich says. "First of all, the 10-page proposal I send to the West Coast becomes a 40-page proposal in Cleveland because people just don't understand the product. Second, if I call six venture capital companies here, only two will call me back, and they'll call two weeks later and then act like they're doing me a big favor by saying no. Third, instead of an attitude of cooperation there's one of competition, as if they're all vying for the same business."

Belovich says Cleveland is stuck in a wealth-preservation mode instead of a wealth-creation mode.

"Instead of trying to save 3,200 jobs in a dying industry we should bulldoze LTV and create 300,000 IT and Biotech jobs," he says. "The real challenge is how to transition to a new industry less painfully.

"Calling the situation here a brain drain is putting the cart before the horse. If we have the jobs, people will stay."

http://www.cleveland.com/weblogs/chatroomlive/index.ssf?/mtlogs/cleve_chatroom/archives/2004_10.html