We present part one of a two part interview with printCafe Co-CEO Marc Olin. Part one will focus on operational and financial areas surrounding printCafe. Part two covers the sales, marketing and adoption rates of printCafe’s solution.

Marc Olin is Co-CEO of printCafe. Marc served eight years as President of Prograph Management Systems, a software company he cofounded. Prograph developed the first publisher-to-printer job specification system and co-developed all of the major buyer-to-printer transaction standards. He is currently a director of the Graphic Arts Technical Foundation and the Graphic Communications Association. Marc received his B.S. degree from Carnegie Mellon University.

printCafe, Inc. was created last year through the combined initiatives of Prograph and CreoScitex, a division of Creo Products, Inc., a world leader in solutions for the graphic arts industry. printCafe solutions are installed in or hosted for over 7500 print buyers and printing facilities worldwide, including 19 of the 25 largest printers in the United States, and 48 Fortune 1000 companies.

Marc, you rolled up many top companies last year into the printCafe brand. Many of the CEO/Founders of the acquired companies were to serve as advisory management. Are those executives still involved?

While some of the executives have left the company from a day-to-day management standpoint, they are all still involved in advisory roles. We recognize their expertise and leadership roles in the industry as a real asset to printCafe.

Did printCafe purchase the companies outright, or is there a trigger that effectively completes the process if printCafe goes public?

printCafe completed each of the acquisitions and owns each company outright. All of the previous company owners have stock in printCafe and are dedicated to the success of our company.

In terms of growth, how are the companies performing since joining printCafe?

The organizations no longer exist as unique companies, but as a comprehensive suite of printCafe print management products. For example, Logic is now printCafe Logic. Our customers are seeing real value in printCafe as a one-stop-shop for a complete end-to-end integration of print management system. We have been quite pleased with the growth of management systems sales over the last year. While 1999 was clearly a banner year for all management systems companies because of the changeovers for Y2K, we have still seen a steady stream of systems sold.

The different printCafe businesses - are they operated in their original locations or has there been a transition to locate certain operations in Pittsburgh?

Operations including marketing, product management, finance and administration have been, for the most part, consolidated in our Pittsburgh headquarters. printCafe continues to maintain product development and support at each of our product locations including Chandler, AZ; Norwalk, CT; Chicago, IL; Lebanon, NH; and Minneapolis, MN. We also have a sales office in London, England to serve the European market. Our intent is to continue to have product support and development take place at each of the remote locations but to link them up worldwide through the use of our new Siebel eCRM solution. We also recently invested in video-conferencing equipment for all of the locations, allowing us to interact much more closely across the enterprise.

What is total current employment?

We have approximately 450 employees, of which approximately 200 are located in Pittsburgh.

Creo joined a group in funding printCafe for an additional $62 million late last year. Other established companies have been pressured to divest of e-investments. Are you concerned that Creo and other major investors need to see hard results too soon?

Because printCafe is currently in an SEC-imposed quiet period in conjunction with our S-1 registration, I am unable to address our financial outlook. As far as CreoScitex’s relationship with printCafe, however, it’s important to note that the companies are strategic partners. We have a very deep relationship that goes well beyond a financial investment and spans joint sales channels and product development. printCafe and CreoScitex are committed to a long-term relationship that is mutually beneficial for both companies. Unlike many of our dot.com competitors, our investors are in the printing industry for the long run and are committed to its success.

Last year, money was everywhere and e-companies promoted their product at every turn. This year, capital is hard to find and many e-businesses are merging or closing their doors. How does this affect printCafe?

The current tightening of the capital markets is actually of benefit to our company as it is removing the competitors with speculative, unstable business models and paved the way for us to demonstrate the difference in our approach and our tangible value proposition.

Some companies have expanded their print management solution into an enterprise wide effort. Do you think this is just a natural progression in these business models, or a necessary survival tactic?

printCafe’s strategy is to provide a solution of great depth in one area, prove our value, and then and only then look towards other opportunities. I think that as the market evolves, each of the companies in this space will find their own niche. Many are looking for that niche now. Some are better suited to add value to smaller buyers where supply chain integration is less critical and where the ability to cover a broader spectrum of products, with less depth is of value.

Would printCafe consider expanding to an enterprise wide solution?

Again, we’d consider this only if we felt there was something unique about our solution that other technology did not provide, and then only if we had already completed our primary work in the printing industry.

What is your opinion of the slowing U.S. economy?

The uncertain nature of the economy affects the printing industry because of its reliance on marketing spending which is often the first to be scaled back in a slowing economy. However a slowing economy forces buyers to reevaluate the way they purchase. Because we help both buyers and suppliers to be more efficient and to reduce waste, we are uniquely positioned to thrive in a slowing economy.

So a slow economy would force corporate cultures out of entrenched ways of conducting business.

We believe that the increased focus on corporate profits in a slowing economy will cause major corporations to look much more closely at how they spend money on their indirect purchases. In order to do this they will need tools such as printCafe to help them better manage their internal operations as well as better manage their interaction with vendors. These corporations will then start to realize that significant economies can only be gained when they start acting in a unified manner, across the entire company, in streamlining the way they approach this spending.

Many companies have announced structured layoffs and reorganizations. Has printCafe done the same with less publicity?

Last year, printCafe experienced minor consolidation in several locations as a natural result of the five rapid acquisitions. The restructuring was intended to reduce duplication of marketing and finance and administrative efforts, and to streamline productivity. Since that time, we have, in fact, been hiring in the areas of sales and software development primarily.

We know there are many variables, but can you explain the overall revenue model of printCafe?

There are many variables – most importantly, it’s flexible and designed to meet the unique size and requirements of each individual customer. We offer licensing as well as subscription options and our private-label Web site solutions are designed with a low-cost of entry price point of $25,000.

Besides education and overall adoption challenges experienced industry wide - what are your major challenges for 2001?

To work through what will be a thinning of the companies in our space and still continue the positive movement that has been started this year towards e-production processes. We’re confident that printers are seeing that not all technology companies in this space are the same and some, especially printCafe, will be around for a very long time.
Examine PART TWO. Thank you Marc.