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An Atlas Deal That's Putting Steve Peskaitis on the Map Lexon's wunderkind beat out the likes of Microsoft for a chance to develop digital products from vast U.S. government data. Can he stay the course? Steven Peskaitis showed a knack for making money early -- very early. Back in 1989, as a sophomore at Lamont High School in suburban Chicago, Peskaitis learned of a California company selling CD-ROMs packed full of shareware such as games, graphic images, and screensavers. The company's offer: Buy 100 CD-ROM programs for $500. Immediately, dollar signs flashed in the grown-up head of this 15-year-old kid. Guessing that a package like that could be sold for more than $60, he persuaded his dad to float him a loan and proceeded to make a bundle. In his first sales effort, a computer fair at a nearby college, he sold 12 copies for $69 a pop. By placing ads in newspapers and computer magazines, he eventually sold all 500, making more than $30,000. "While you're in high school, that's pretty good money," deadpans Peskaitis, now 24. The young boy has grown up to become CEO of Lexon Technologies, a tiny company that seems poised to break free of its modest Midwestern roots. Last April, Lexon beat out heavy hitters such as Microsoft Corp. and Rand McNally for the right to make digital products based on terabytes of demographic and geographic data stored on 44 federal government CDs and paper stacked a foot high. The products could range from interactive 3-D disks to Internet applications. Called the National Atlas Project, the effort is part of Vice-President Al Gore's "Digital Earth" initiative to educate the public about geography and the environment via technology. Lexon will pay royalties to the government. The deal gives Peskaitis' little Chicago company a chance to develop products for sale to schools, libraries, and corporations nationwide. "This is huge," he says, thinking of the 135,000 U.S. schools and libraries that will be the initial target market. A set price hasn't been determined, but subscriptions could range from $1,000 a year for small high schools to $50,000 for a giant like the University of Michigan. Combined with licensing opportunities, "that's a lot of money," Peskaitis beams.
In July, his money sense still sharp, Peskaitis worked a deal to merge with nonoperational but publicly traded Rexford Inc. in Scottsdale, Ariz., so he could sell shares and expand the business faster. He renamed his company Lexon Technologies. Lexon, which had just $1.2 million in revenues last year and only a tiny profit, now has about 25 employees and sells software to thousands of customers -- from consumers who might buy one CD to companies, such as software publisher Cosmi Corp., which buys and resells 40,000 over a three-month span. It was Peskaitis' sense of all the great things that can be done with maps that won Lexon the government job. Federal officials wanted more than a massive digital atlas made from their data. They were looking for a company that could customize the information and shape it for myriad markets. More than 20 companies (including Rand McNally and Microsoft) expressed interest, but Peskaitis presented the most compelling proposition, says Jay Donnelly, managing editor of the U.S. Geological Survey, the lead agency for the project. MONOPOLY WITH GROWN-UPS. During the presentation, Peskaitis pulled out samples of products that his company had created under the Chicago Map name. He suggested that he could create a brand name, say "National Atlas," for the federal data and make different products to fit niche markets. One possibility: neighborhood maps that retailers could use to see if a region's demographics were right for launching a store. Another was property maps to allow commercial real estate agents to check for records of toxic waste or floods. Demographic databases loaded with colorful graphics could be sold to schools. "I told them, 'We may be a small company, but we know how to customize this atlas to meet different people's needs,'" he recalls. "They loved it." Confirms Donnelly: "He shared our vision. That got us excited." Peskaitis began honing his vision for business ventures well before adolescence. At 8, he would spend time at the local golf course making a few bucks selling apples. He enjoyed playing Monopoly with adults more than tossing a ball with other kids. "That's how he learned how to bargain, to wheel and deal," says his father, a former engineer, who claims the knack didn't come from him. Adds Steve: "Actually, I played Monopoly before I could read -- at 4 years old. Selling things was kind of in me." Of course, Peskaitis' penchant for making a buck has left some big holes in his life. Having skipped college because he wanted to focus on running his business, he has no dorm camaraderie or exam-cramming to look back on. On the other hand, despite his CEO status, he has felt the embarrassment of being legally too young to lease a car.
It's a massive challenge for a young entrepreneur. Still, Peskaitis is undaunted. After all, making a buck is in this kid's blood. Crockett covers technology companies in Business Week's Chicago bureau. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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Lexon CEO Steve Peskaitis WEB POINTERS Click here to visit sites mentioned in the story: Lexon Technologies National Atlas White Paper Gore's "Digital Earth" Chicago Map National Atlas Project U.S. Geological Survey Trius Green Grass Software Cosmi InfoTech Rand McNally Microsoft | ||||||||||||
