Lorica International
In mid-2007, a small group of investors made a breakthrough discovery: a new way to spin a non-flammable yarn and knit it into a fabric that felt as soft and luxurious as cashmere. This discovery would result in a dramatic texture change for non-flammables, as all previous fabrications were bulky and needed to be reinforced in order to work.
These investors knew they needed someone to drive the effort of commercialization as quickly and efficiently as possible. Given Fabrizio Balestri's documented experiences with successful start up companies, he was chosen for the job. By September, he was on board to lead the effort as Lorica International's COO.
After investigating the technical yarn market and working closely with their partners, Fabrizio and his team knew they needed to take three critical steps to successfully bring this product to market.
- First, they needed a U.S. based technical yard spinner that could employ the investors' technology effectively. This was a bit of a challenge, because many of the domestic textile companies had either gone out of business or moved their operations overseas. But a U.S. company was important, as Fabrizio's team was targeting both military and commercial buyers.
- Second, they needed a source for raw material. Once again, they found that the U.S. was not a viable source, but in this case an overseas solution was possible. Their search ended in China, with an outstanding supplier who was ready for the challenge.
- Third, they needed a strong marketing partner who could help them conduct "proof of concept" studies in a commercial environment outside a laboratory.
To address the need for a technical yarn spinner, they performed due diligence on available spinners throughout the U.S. Pharr Yarns of North Carolina proved to be the strongest choice. Not only are Pharr Yarns the best technical Spinner in the country—and possibly in the world—but they agreed to help Fabrizio and his team with the proof of concept and commercialization phases of their venture. When you consider the fact that Pharr works with major multi-national companies, and at the outset of this venture the investors had little to offer aside from a great idea and a piece of fabric, this was a huge win. To gain Pharr Yarns' trust, Fabrizio had to convince them that his team was serious and would be a formidable player in the fire safety industry segment of the textile market.
That still left the need for a raw materials source. Relying on the experiences of utilizing partnerships that he had garnered from previous ventures, Fabrizio traveled to China in September of 2007 to locate a manufacturer of the raw material required to spin the yarn. After meeting with four different factories, he found the one that "felt right" and returned in November to begin negotiations in earnest. This was new territory for him—literally and figuratively—but he found his way as he went. His Chinese contacts put a lot of emphasis on trust when doing business with foreigners, and Fabrizio had a challenging communication barrier to surmount. After the deal they'd discussed verbally changed dramatically when he received it in written form, Fabrizio knew they needed to retrench. He returned to China in early 2008, to once again try and bridge differences.
Negotiations were long and intense—everything is observed and discussed, including mannerisms, reactions and how you comport yourself during social meals. Fabrizio found his Italian heritage served him well throughout this process, and asked about the families and hobbies of his Chinese counterparts, sharing his past successes and helping them to feel more comfortable with him. A deal was nearly complete—including delivery schedules—and then another roadblock surfaced that looked to cause unacceptable delays and costs. Through tight negotiations, and being willing to walk away from a deal that was not right for him and his team, Fabrizio secured a new schedule that accommodated the investors' needs.
Fabrizio's most recent visit to the supplier in China points to a solid, successful launch for the product. However, these successes wouldn't have been possible without approaching both his U.S. and Chinese partners with a profound respect for their business and culture.
He found in both situations that TRUST was the key factor that enabled Fabrizio and his team to successfully complete a deal within the necessary timeframe, particularly with their Chinese contacts. Speed was not important to the Chinese, and neither were a U.S. company's marketing needs. What was most important to them was that they would be treated fairly and respectfully, that their processes would be honored and that integrity would be maintained throughout the negotiation. Fabrizio and his team look forward to a long and productive working relationship with both of their partners as they move to launch this innovative product worldwide.
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