1st October 2003

The number one company on the 2003 Inc. 500 list hit the top slot by developing a killer solution for backyard pest control.
By: Lora Kolodny

In the late '90s, American Biophysics attached the tag line "Fatal attraction for mosquitoes" to its flagship product. But when the company was just getting started, the four engineers who founded it had a very different objective--trying to keep the fragile mosquitoes alive.

Back in 1991, the U.S. Army had issued bids for technology to survey the spread and impact of insect-borne diseases such as malaria, lyme, and the then little-known West Nile virus. To see a virus in action, researchers needed carrier specimens alive and kicking. Thus American Biophysics rolled out the ABC Pro. Using standard mosquito bait, pure CO2, it drew the biters to a container where an artificial breeze pinned them down safely. At the time, the only commercial application foreseen for the ABC Pro was entomological surveillance--mostly by government, medical, or educational institutions. But scientists found the ABC Pro inefficient because they had to attend to it constantly, providing their own supply of dry ice (which "melts" into CO2 vapor) or cylinders of the gas in compressed form to attract bugs. By 1997, the company was essentially bankrupt.

Searching for cash and guidance, its investors called on Ray Ianetta, who had launched and sold three successful high-tech companies with longtime business partner Emma Durand. "When they approached me with the business plan," remembers Ianetta, now CEO of the company, "I said, 'It's bugs? I'm not biting.' And I threw it in the basket." But Ianetta's personal CPA, an early investor named Jeff Adam, made a plea for him and Durand to take another look.

An engineer and intellectual property expert, Durand saw a challenge: "Could we convert a niche surveillance tool to something that was commercially viable?" The potential to target problem insect populations without environmentally toxic pesticides and without harming benign species gave her hope. In July 1998, she and Ianetta joined the company as chief of engineering and CEO, respectively. In 2001, they appointed Jeff Adam CFO.

The eureka moment came in early 1999. In Durand's words: "We discovered a way to catalytically convert propane to yield CO2 and enhance this attractant with additional chemicals expelled through a patented mechanism." In laymen's terms: They made a machine that could lure and kill biting insects 24-7 on autopilot. Together, Ianetta and Durand invested a million dollars of capital and 24 months of labor.

"When they approached me with the business plan, I said, 'It's bugs? I'm not biting.' And I threw it in the basket."

Ray Ianetta, American Biophysics CEO

Today, the Mosquito Magnet looks like the robotic love child of a propane grill and a vacuum cleaner. It works with patented "counterflow" technology, a two-fan system that generates both an updraft, to carry the smell of dinner to the insects, and a downdraft, to force them into a mesh net at the center of the machine. Unable to fight the breeze, the mosquitoes die of dehydration. American Biophysics says the Mosquito Magnet can snag up to 1,500 biters a night. It also boasts that in the summer of 2000, the U.S. Army Medical Command and the CDC found that the Mosquito Magnet captured three times more biting insects than any of seven other products using the same attractants.

Even so, it wasn't easy for the company to get a foot in the door with retailers. That was accomplished, says Richard Valentine, a major shareholder in American Biophysics and CEO of F1 entertainment, by dint of Ray Ianetta's personality: "He's the kind of guy where if you tell him 'no' he hears it as 'know'--meaning you are telling him that you need to know more."

In 1999, Ianetta cold-called Rick Salek, a VP of merchandising for Frontgate, the high-end catalog retailer regularly featured in Skymall , to tell him the pest products he was selling didn't work. "Maybe I was naive, not coming from the consumer market," Ianetta chuckles today, "but ours is based on real scientific principle--knowing what the female mosquito, the one that bites, is attracted to, how it flies.This other thing they were selling was just another gadget." After sampling, Frontgate agreed to carry the Pro. Even at $1,295, it sold well.

To meet the nascent demand, American Biophysics began outsourcing manufacturing, finding more space for assembly and inventory in Rhode Island, increasing its marketing efforts, and hiring aggressively. Then Ianetta set his sights on Home Depot. Once again, he got in the door with a cold call--although the growing reputation of his product helped. The VP of merchandising at Home Depot knew someone who loved the Pro, and the buyer in charge of the garden category had seen it in pest-control trade publications.

Ianetta packed his samples and boarded a plane for a product review in Nevada--only to miss his connection. Stranded in Chicago with no other flight to board, due to meet "the Depot" at 5 in Reno, he chartered a private Cessna, racking up $16,000 on his personal credit card. On arrival, he realized crucial pieces of the samples were missing, stuck in the belly of a commercial airplane. But Home Depot was already convinced the product worked. What it didn't know was, could a small company like American Biophysics offer something in the right price range? Ianetta promised the Liberty model with a $495 price tag. The chain's buyers also asked if American Biophysics would refrain from selling to its competitors in the U.S.; Ianetta quickly agreed.

For its part, Home Depot designated American Biophysics as its sole supplier of mosquito-attractive traps in 2002 and 2003. The chain also provides promotional support. "This new technology isn't like a $4 bug spray, but more like a lawnmower," says John Fuller, global product merchant for Home Depot. "You have to know how to use it right, how to position it so that you don't get between the mosquitoes and the trap and end up as their food source. We're committed to solving our customers' bug-bite problems, so we do a lot of in-store demonstrations, and often highlight the Mosquito Magnet in the sidebars of our catalog."

By the end of the 2001 fiscal year, American Biophysics had achieved profitability with revenue surpassing $23 million. The following year, revenue more than doubled. Today, the company sells three models: The Defender ($295, half-acre coverage) and the Liberty ($495, one-acre coverage) both come with 50-foot extension cords and require electrical power; the Pro ($1,295, one-acre coverage) contains a mechanical power pack (not a chemical battery) and is freestanding. Each model requires the occasional replacement net and refills of propane and attractants, costing about $15 monthly for the average U.S. consumer (while creating repeat sales opportunities for accessory retailers).

CFO Jeff Adam reports there are some 400,000 Mosquito Magnets in circulation. This past summer, 30-second commercials aired during CNN Headline News , Trading Spaces , and on the Weather Channel. The devices popped up at high-profile venues from Jones Beach to Pebble Beach. And through relationships with at least 50 dealers, American Biophysics now sells Magnets on every continent but Antarctica, where temperatures are too low for mosquitoes to survive.

*****

Harry Potter and the Midge Massacre of Glencoe

Yet again the pioneering midge catcher developed by American Biophysics Corporation has proved that it is a formidable opponent against the dreaded Scottish midge. Midge Master Ltd. the UK importer of the Mosquito Magnet supplied four machines to Warner Brothers when they started filming the latest Harry Potter movie 'The Prisoner of Azkbahan' in Glencoe and a second massacre has been taking place. This follows the huge success during the filming of 'Monarch of the Glen' last year.

Extensive testing of the Mosquito Magnet in the Highlands proved that the machine, which was designed for mosquitoes and 'no-see-ums' (the American name for midges) is a real winner. One machine on the Scardroy Estate in Inverness-shire caught 25 million of the wee beasties in just 5 weeks. For the first time ever, midge screens were removed from the windows of the shooting lodge and guests were able to enjoy drinks and meals outdoors.

American Biophysics Corporation has supplied Mosquito Magnets to 25 scientists around the world to assist them with their research into biting insects. Dr. Alison Blackwell of Edinburgh University is part of this international team and she was featured with the Mosquito Magnet on BBC's Tomorrow's World last Autumn.

*****

3rd February 2003

'Midge-Free-Zone' ready to do battle with Scottish midges

A revolutionary American machine, which gained publicity during field trials in Scotland last year, is now available in the UK. It is being launched at Stand 515 at the 'Outdoors Show' at the SECC, Glasgow on Wednesday 5th February and can been seen throughout the five-day show.

Developed and manufactured in Rhode Island, USA, and coined 'Midge-Free-Zone' in UK version of the highly successful Mosquito Magnet is now available.

Justimagi.net Limited, based in Helensburgh, Argyll is co-ordinating direct sales and anticipates huge demand for the machine, which has already proved its effectiveness in clearing mosquitoes and 'no-see-ums' across large areas of the USA, South America and the Caribbean.

Research has shown that it is the CO2 exhaled by humans and animals, which attracts biting insects. The mimics this by producing a plume of CO2 by catalytic conversion of propane gas. Midges are attracted towards the machine and, as they get closer, they are vacuumed into a fine mesh net inside the unit. There, they desiccate and die.

The 'Midge-Free-Zone' is environmentally friendly, as it kills only small biting insects & does not affect beneficial insects such as butterflies, ladybirds and so forth. The machine uses no pesticides or other dangerous chemicals. At field tests in Inverness-shire last year, the machine trapped over 3.7 million midges in 1 day.

The 'Midge-Free-Zone' is available in two sizes. The stand alone PRO model can clear an area of approximately one acre. The Liberty model is powered by a low voltage mains supply and can clear up to 1 acre. Both models use bottled propane gas.

Justimagi.net Limited is owned by Roy & Penny Lewis, who established Hebridean Whisky Liqueur Company in 1995 and have already developed five liqueur brands, which are marketed extensively throughout the UK. While the is obviously a very different product from whisky liqueurs, Roy and Penny Lewis will be drawing on their extensive experience of marketing directly to consumers at shows, through mail order and via the Internet. They are both graduate scientists and therefore have a good technical understanding of the product itself.

Roy Lewis said:

"The American manufacturers have spent years researching biting insects and developing the Mosquito Magnet and to date over 150,000 units have been sold. Here in Scotland, midges have a devastating effect on tourism and the quality of life of Scottish residents, particularly on the west side of the country. At last, we have the chance to fight back. The 'Midge-Free-Zone' will enable people to enjoy more time in their gardens and playing outdoor sports without being plagued by the dreaded wee beasties!"