Nailing it In

Nailing it In

ENTREPRENEURS by Mark Gordon | Managing Editor

The 200-year-old nail industry isn't exactly a high-tech magnet. That hasn't stopped a trio of Gulf Coast entrepreneurs determined to hammer the industry with innovation.

A cabinetmaker, an Internet entrepreneur and a civil litigator seemingly have little in common. And the idea that together, the trio would spend nearly a decade and $200,000 of their own, their friends' and their relatives' money so they could sling arrows at one of the most staid industries in American business is even more bizarre.

Still, here they are, the principles and founders of the Everhold Group, a Sarasota-based company that plans to turn the global nail business upside down by introducing a "new nail for the new century."

The nail will be lighter, using up to 40% less material to produce. It will be stronger by increasing the area that connects with the wood. And it will be better by reducing wood splitting through cutting wood fibers instead of pushing them out.

At least that's the gospel according to Jay Rotolo, president and CEO of Sarasota-based BreakFree Wireless, a high-speed and wireless Internet provider. BreakFree clients include the Observer Group Inc., publisher of the Review.

Rotolo, 51, makes up the business side of Everhold, while Barry Seace, who once ran a thriving, 18-employee cabinetry business that installed dozens of fixtures in Longboat Key condos, makes up the nuts and bolts side of the operation. It was Seace, 60, who finalized the concepts behind the now-patented Everhold StarNail in 2002 after having an inventors' eureka moment while sitting by his father's hospital bed after the elder Seace suffered a stroke.

Steve Wittmer, 44, completes the trio. He's a Sarasota-based lawyer, working out of a self-titled firm and focusing on litigation for personal injury, wrongful deaths and insurance claims. He handles the legal side of the Everhold operation.

Individually, the players behind Everhold have experienced their own ups and downs in business life, ranging from lean sales years to lost trials to creative burnouts. But despite their diverse backgrounds, they share a passion in two areas: Creating something new and then using it to help them take on the business establishment.

"One of my excitements in life," says Rotolo, "is to do the stuff that people haven't done and can't do, until it becomes more commonplace."

A breakthrough

Rotolo says he's done things like that before, as he was one of the first people to truly get the Internet's potential, almost 20 years ago. But that was in an emerging industry in a field already known for risk-takers and people coming up with "out there" ideas.

The global nail industry, though, is different. It's made up of about six large manufacturers who produce the nails and sell them by the millions to homebuilders and construction companies. Profit margins are traditionally thin, defined by the cost of metal and the other materials used to make the nails; leading companies in the industry include Stanley Bostitch, Paslode and the Hillman Group.

Everhold is entering the game late, as nails have been used in construction since the late 1700s. The original idea behind the Everhold StarNail stems from Frank Potucek, an engineer and inventor who lived in Sarasota and worked for Paslode for several years. But his idea was incomplete, and what's more, Potucek didn't have the business sense to take the product to one of the big players.

Potucek died in 2000. By then, the Everhold team was working on improving the concept, with Potucek's children involved in the company as minority shareholders. The breakthrough came in 2002, as Seace sat with his father in a Harrisburg, Pa., hospital, as he recovered from a stroke; Seace's father recovered and now lives in Sarasota.

Back then, though, Seace began drawing some multiple-sided shapes on scratch paper. And then it hit him: Using the shapes, he could change the process of how a nail is actually made, from a one stamp to a two stamp process. The innovation would create a system that could make a partition in the middle of the nail, while still allowing the product to have a circular shape.

By doing it that way, Seace says, the new shape of the shank for the nail would reduce the amount of raw material needed to make the nail. That's a big savings, as 85% of a nail is the material.

And just as crucial, the nail could still be manufactured with a standard industry nail-making machine, so a Stanley or a Paslode wouldn't have to spend millions of dollars upgrading equipment.

"It seemed almost too simple to pursue," says Seace. "I didn't think we could get a patent from something as simple as a shape."

Fighting Stanley

But the patent process turned out to be far from simple. It was costly, both in time and money spent on the legal side, yet it was also a valuable learning lesson in government bureaucracy. The four-year process, which ended late last summer when the patent for a "reduced material fastener" was issued, also led Everhold to realize its best plan of attack would be to license the technology to one of the top companies, in the hopes of getting a royalty of 10% per box of nails sold.

The entrepreneurs had already raised $100,000 to pursue the patent and the technology, with most of the money coming from friends and other investors who had previously backed Rotolo's BreakFree. The group would later raise another $100,000 in a second round of financing.

In 2003, the group met with Ed Sutt, an engineer with Stanley Bostitch, who was also working on improving the standard nail. Stanley didn't reach any agreements with Everhold; a spokesman says the company doesn't accept outside submissions. And Sutt ultimately created the HurriQuake nail, which is similar to the concepts behind the StarNail, but used primarily in roof construction.

Competition has only pushed the Everhold trio more. "We're not going to just roll over," Rotolo says. "We're going to apply for another patent and improve the product."

Meanwhile, Everhold is in marketing mode for its StarNail. They've produced a glossy package explaining the science and innovation behind the nail, as well as built an eight-foot replica of the nail they will use at trade shows, including one in Chicago later this year. The group is also working with a Largo machine shop to improve the concept and has hired a consultant with experience working in the nail industry to help with meeting contacts.

Still, the group isn't blind to the concept that total commercial success in the nail industry is a long shot, much like going from amateur singing to winning a Grammy.

"This is not an overnight get-rich concept," says Rotolo. "This takes a lot more time then we ever imagined."

REVIEW SUMMARY

Business. Everhold Group

Industry. Nails

Key. Three entrepreneurs are working on a creating a new nail, hoping to license the technology to one of the industry's top nail manufacturers.

Hammerheads

The trio behind the Everhold Group, intent on making a better nail, has a diverse background.

• Jay Rotolo: A Chicago native, Rotolo, the leads the business side. He's been at the forefront of two computer technology related companies. First, for 14 years, Rotolo, 51, served as CEO of CAD Center, a company that sold and monitored computer programs; he led the company's growth to the multi-million dollar range. He's currently the president and CEO of BreakFree Wireless, a Sarasota-based company he founded in 1998 to provide high-speed and wireless Internet services; BreakFree clients include the Observer Group Inc., owners of the Review.

• Barry Seace: He's the lead inventor of the group and handles the artistic and creative side. He earned a Master's of Fine Arts from the University of Tennessee and has taught art classes at several schools and institutions, including ten years at Mount Holyoke College in South Hadley, Mass. His work has appeared in galleries in New York City, Boston and Montreal, among other locations. He's also founded two Sarasota-area cabinetry businesses, including his current two-man shop, Heartwood Studios Inc., which he runs from his home. Seace, 60, was born in Harrisburg, Pa.

• Steve Wittmer: The legal side of the group, Wittmer's been a practicing lawyer for almost 20 years, the first 10 spent in law firms, mostly in the Miami area. At one point, Wittmer, 44, was the managing partner for a firm with offices in Miami and St. Petersburg. The Miami native moved to Sarasota in 1998 and opened his own firm, specializing in litigation for personal injury, wrongful deaths and insurance claims. He's a graduate of the Walter F. George School of Law at Mercer University.