CAKI Awards 2000: NineSigma

The company, which started in February, went online in October with an array of specialized software to broker global talent and information, an aggressive move that garnered the Beachwood company the most promising new company award in the Northeast Ohio Software Association's 2000 Cleveland Area Knowledge Industry Awards.

The company's plan is to match an organization's research and development needs with appropriate suppliers in real time over its web site. NineSigma users can obtain a full complement of services or can decide which offerings best suit their needs at www.ninesigma.com.

Mehran Mehregany, an expert in tiny electric motor drives called microelectromechanical systems, is NineSigma's chairman and chief executive officer. He also is the George S. Dively professor of engineering at Case Western Reserve University and hopes to use his academic background in the business world.

"Corporate America has a limited ability to find the Nest researchers today," Dr. Mehregany said. "NineSigma will put corporate research and development in touch with researchers who can accelerate product development with rapid deployment research."

The idea grew from discussions Dr. Mehregany had with his academic colleagues. In recent years, they pondered why business-to-business research was not as free flowing, or as successful, as government research, he said.

For example, the Department of Health and Human Services, the Defense Department and the National Science Foundation share their research and development knowledge. Scientists in those organizations post their need for research data and trust the government with the information, knowing it will not commercialize their ideas.

The situation is different in general industry. Businesses do not trust each other with research. If word gets out about research a company wants to perform, competitors can jump in and take away the advantage. There's no infrastructure for industry to share research information and no channel to define leading-edge, highquality research and development.

Glenn Brown, who until August was science adviser to Governors Taft and Voinovich, has viewed research from industry, academia and government. He previously held posts at CWRU and BP Oil Co.

"How it has worked until now is that when a corporate officer needed information on a development, he or she would call two or three friends," Mr. Brown said. "It's a hit or miss operation there is so much (research data) out there. Now, a visit to a web site connects to an astounding amount of information."

NineSigma promises to keep such transactions confidential, an important issue for companies and researchers.

"We want to be the trusted intermediary," Dr. Mehregany said.

When substantial research is to be carried out, program managers at the company will, for a fee, put together four or five top researchers to examine a particular research project.

In the 10 months since the company's founding, Dr. Mehregany has organized a management team with knowledge of how the researchand- development community operates.

The team includes: Jim Calvert, the company's chief operating officer, who has experience at IBM, America Online and Genuity; Geoff Baker, vice president of marketing and business development, who held sales and marketing posts at Republic Steel and BP and most recently was CWRU director of corporate development; and Carol Clark, NineSigma's chief financial officer and a former senior executive with BancBoston.

In addition, Dr. Mehregany has assembled a senior strategic advisory board that plays an active part in company operations. Several members helped to create the research-and-development acquisition infrastructure for the government.

Among them is Mary L. Good, former undersecretary of technology for the U.S. Department of Commerce and president-elect of the American Association for the Advancement of Science. Other members are two former undersecretaries of defense in charge of research and engineering, a science adviser to former President Bush, and several Carnegie Mellon University and CWRU professors. Such an impressive assembly no doubt has helped attract investors to NineSigma. The company is 50% oversubscribed in its initial investment goals of $3 million. After NineSigma management made a product pitch to senior executives of University Hospitals of Cleveland, the hospital invested $2 million in the company.

Farah Walters, University Hospitals' chief executive officer, has "high hopes" for the hospital's investment.

"I don't think one could have chosen a better company for this (CAKI) award," Ms. Walters said. "It's one of the most promising and innovative companies I have learned about. We decided to invest early. The idea is clever and the market potential is enormous. This is a dot-com that is head and shoulders above others."

Hospital officials especially liked the idea of using NineSigma software to keep their researchers informed about what each is doing and more easily trade information.

One of the company's databases publishes reports of the world's technology tailored for each user. People who register on the web site can get a customized list of patents issued, research contracts they can bid for, articles from professional journals and even news releases and other materials on the day of a breakthrough announcement.

"It's an enormous time saving to a research engineer who will not have to go to the library but instead will have all the latest data pop-up on his or her screen," said Ms. Clark, the CFO. "Such support can significantly shorten time to market."

A native Iranian, Dr. Mehregany, 38, came to the United States at age 17 because he was a member of the Bahai, a religious minority persecuted after the revolution there. Last year, he sold a business he started, Advanced MicroMachines Inc., to its largest customer, B.F. Goodrich Co. He has taken a year off from Case Western Reserve to work at NineSigma full time.

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