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February 18, 1994 - Image 81

Resource type:
Text
Publication:
The Detroit Jewish News, 1994-02-18

Disclaimer: Computer generated plain text may have errors. Read more about this.

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FEBRU A RY

giant GTE spends annually on
paper clips.
"If you had asked me before
this what the odds were of a $20
billion old-line company doing
business with a small manu-
facturing company in what is
— excuse me — not the most
politically stable region in the
world, I would have said they
were slim to none," Mr. Marks
says.
Today, thanks to the deal
with GTE, sales are climbing.
Gilat registered $7 million in
sales of satellite units in 1992,
and projects sales of $15 million
for 1993. On the basis of this
strength, the 6-year-old com-
pany went public eight months
ago in the stock market.
Gilat set its sights on GTE
as a potential customer for their
VSATs almost as soon as Mr.
Gat and his co-founders start-
ed their company in 1987. Near-
ly all of the group of eight who
started the company served to-
gether in Israel Defense Force
research and development units
until that year.
Mr. Gat remembers ap-
proaching former BIRD exec-
utive director Dr. A.I. (Ed)
Mlaysky in 1988 and telling
him that they had targeted
GTE as a strategic partner.
"Ed looked at me and said:
`You guys must be crazy,' " Mr.
Gat recalls.
But quickly, Gilat convinced
both Mlaysky and GTE execu-
tives they were dead serious.
Thanks to BIRD's willingness
to shoulder some of the risk,
GTE agreed in 1989 to work
with Gilat on development of
VSATs for the Skystar project.
A crucial factor in the deci-
sion, says GTE Spacenet Pres-
ident Howard Svigals, was
BIRD's offer to shoulder 50 per-
cent of the the expenses of the
development of the project for
both companies. BIRD does so
with the understanding that if
the partnership blossoms into
a profitable enterprise, it will
be paid up to 150 percent of its
original grant.
But moving from develop-
ment of the VSATs to closing
a sales deal that would make
Gilat the supplier of the termi-
nals was a long, involved and
sometimes painful process.
"If you want to learn how to
do business with a big compa-
ny like us," says Mr. Marks, "it's
all politics. It's about building
relationships and building cred-
ibility."
Gilat's U.S. representative,
Joshua Levinberg, spent much
of his time at GTE Spacenet of-
fices convincing them that Gi-
lat could reliably produce such
an important product. Inside
such a large company, such an
undertaking means more than
convincing one or two key fig-
ures — it's important to forge
relationships.

How To Get
5,000 More Patients & Clients
Into 50% Less Space

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