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Chapter One

Jan Tudor

Business Valuation Research

Jan Tudor is an independent research librarian and the owner of JT Research, based in Portland, OR.

Tell me a bit about your background and how you wound up where you are today.

I've always been kind of a research nerd. I was one of those people in college who loved term papers. I worked in a law library before going on to grad school to get my M.L.I.S. at the University of California, Berkeley, and when I got out of library school, my first professional job was at Willamette University in Salem, Oregon. I was a basic reference librarian there for a few years, and then I branched out and became their business librarian. I became very frustrated in the academic environment, so I moved on to the corporate world and landed an awesome job at Willamette Management Associates.

After I was there for a couple of years, I became frustrated with the eight-to-five environment and with having so many ideas but not being able to carry them out. In particular, I wanted to be highly involved in the marketing of the company. Willamette Management is one of the leading business valuation firms in the country, and I saw how, in my position as director of the library, I could really branch out and help the analysts and owners with their marketing efforts. The problem was that I had to do so much research and couldn't hire more people, so I just couldn't grow. I wanted to do so much more and I couldn't. So in May 1997, I decided to move on and start my own business.

My time at Willamette Management was really useful for me. As the head of research for a firm that is so well known in the industry, I had other appraisers calling me all the time, asking me how to do research or how to find a certain piece of information. The more I learned about the industry, the more I realized there was this whole niche market out there of people who couldn't afford librarians and who didn't have time to do the research themselves. So while I was at Willamette, I started thinking, "Gee, I've identified this market. I'm just going to shoot for that." And I did. I started saving business cards, did a lot of public speaking to appraisers, saved every conference attendee list that I could, and that's how I started. And it's where I am today.

What kind of research do you do now, and what kinds of clients do you have?

I'd say ninety percent of my clients are business appraisers. A business appraiser will get hired by the owner of a privately held company for a couple of reasons. One reason would be that the owner wants to sell the company. Another reason would be that it's the end of the year, and the business owner wants to give some shares to a family member. Or maybe there's a divorce going on and the company needs to be valued for the property settlement, but because the company doesn't have stock on the public market, it's hard to come up with a value. So there's this whole set of rules that business appraisers use to come up with a company's value. They have to look at how the company compares to the rest of its industry. And oddly enough, there is an Internal Revenue Code ruling that mandates that you must do this research, which is great for me. That's only for gift tax valuations, but it sets the tone for the whole industry.

So when the appraisers go through their checklist of rules for valuing a company, they need to conduct research, and they don't know how to do it. Mind you, the research isn't a big part of the valuation it's more like due diligence for them--but there are times when my research carries a lot of weight, such as when it's for litigation.

What it comes down to is that I do a lot of industry research; everyday, I get a different industry. Yesterday I did swimming pool contractors; the day before, I did plastic injection molding. Every day, it's something new and, geek that I am, I love it. I also do a lot of company research using public company data, finding comparable mergers for a proposed acquisition for comparison purposes. And every once in a while I get a business broker who wants industry research.

I remember hearing you speak at the Online World conference, and you mentioned that research is like making a cocktail. Can you explain that?

It really does describe my standard research methodology. It's what enables me to manage my time and manage the tremendous number of data sources we have now. I really had to come up with this to save my soul, my mental health. So here's how it works. I get the call from a client: "All right, I'm going to value a plastic injection molding company," and I have the typical reference interview with the person. I'll ask, "Who are their customers, what geographic area does this company work in, do they export?" I try to get as much information as I can so that I can understand exactly what the client needs. That's what makes my job a bit easier. I even write up this discussion and include it in the final report.

Once I get ready to actually begin the research, I pull out the Encyclopedia of Business Information Sources [79, see Appendix A]. This is the ironic thing--I start my online research with a book! And I pull out Trip Wyckoff's SI: Special Issues [95], and I check Fulltext Sources Online [83], just to get a feel of where the industry is. The Encyclopedia of Business Information Sources is amazing--it saves me so much time. It helps me identify the trade associations, the major newsletters and the trade publications, and if there are any relevant research institutes. I find this technique really valuable because I'm outsourcing more, and I'm outsourcing to people who aren't librarians. They're learning how to search and I want to give them some guidelines. So I make this checklist as a starting point--these are the trade associations to call, and so on. When I worked at Willamette University, I taught a lot of library instruction classes, and I always said to the students, "It's so important to start with a reference book, because it gets you grounded; you can jump off from there." I'm finally practicing what I preach.

Once I get an idea of some of the major publications and the trade associations in the industry I'm researching, then I go online. For example, if I have identified an industry's trade association, I will go directly to the Internet, either to the ASAE [4] site or I'll do a phrase search with that association's name in one or two search engines to locate its Web site. I'll check out the association's site to see how much information they're providing. Sometimes, they'll just give you a little bit and sometimes they'll give you a ton of information. If the Web site doesn't have a lot of information, then I will go to the Industry Insider product on Investext [37] and see if the industry is covered there. And if the Web site mentions any association publications, I might look in Fulltext Sources Online to see if the publications are available online. Of course, not everything is online. I like Trip Wyckoff's Special Issues because he covers a lot of publications that aren't online, and there might be an amazing industry overview in a publication that has just never made it online. But I feel like I've covered all my bases with those three print sources.

So to get back to my analogy of my research `cocktail,' this is sort of like my liquor cabinet. My reference resources are my liquor cabinet, where I look to see what I want to do. So I decide to start with the rum--this is the trade association information and whatever I can find on Investext. And I might make some phone calls. For example, Special Issues might tell me that the December issue of a journal has a forecast of the industry I'm researching, so I might fax a note to the editor and ask that it be sent to me. The next thing I know, I have the whole issue sitting here in my fax machine. It's something I do as part of my routine, just to see if I can get a jump on things, before trying to find it online.

And then I'm going to add my Kahlua to my rum drink. That's when I go to Dialog [20]. I will go to the typical files--9, 15, 16, 148 and 636-- [Editor's note: Business & Industry, ABI/Inform, IAC PROMT, IAC Business & Industry Database, and IAC Newsletter Database] to find industry information. I know the indexing really well in those files, and I'll look for index terms such as "industry-wide conditions" or "forecasts." I will do some quick searching, print out the results in format 8, which shows index terms, or sometimes format 6 even though it frustrates me because the title doesn't necessarily indicate what the article's about. Then I'll look the results over and I'll think, "Okay, here are a couple of really good articles; I'd rather just buy them online than spend more time trying to find them cheaper anywhere else." And I read through the articles I've just downloaded.

Now we come to my next ingredient, which is Triple Sec, an orange liqueur. That's when I go back to the Internet, because I might read in one of the articles I downloaded that there's a trade association I've missed, or there's a consulting firm that covers the industry, or somebody's name shows up as an expert. I kind of play with it; I go back and forth between the for-fee online services and the Internet. That's where my creative bartending skills come into play.

Next I add the coffee--information that is on the Internet that is not available on a fee-based online service. Maybe I can find research that a student or a professor did. I will also go to what I consider my "known" sites like the Census Bureau [14] and consulting firms such as CIT [16], which publishes industry overviews on the Net that never appear in the traditional online services. I rely heavily on my bookmark files; it isn't until I'm really desperate that I will use a search engine.

I'm lucky that I have a formula that works for me and that I get to do the same type of research every day, because it's allowed me to create a rhythm in my searching--or my bartending. And finally, if I still need some more information, I'll add my final ingredient. This is the cream that goes on top of this drink--what I've described is called a Spanish Coffee. I will go to a market research database. Typically, I go to Dialog, because it's so time-consuming to go to each consulting firm's Web site and find the tables of contents. I'm kind of wishy-washy about that, though; it all depends on how much time and money I've spent already. With Dialog's DialUnit pricing, doing research on the market research files in Dialog is so expensive now. It just boggles my mind that I can come up with a $30 Dialog bill, and all I did was get tables of contents from market research reports.

When I pay that much for what was essentially just the catalog of reports, I realize that I need to make a bookmark file of all the market research sites on the Net, and just make that part of my routine. What I really like about some of those consulting firms' sites is that they put out press releases. Sometimes that will give me the one sentence that I need. Another fee-based service I'll use at the very end if I haven't found anything else is Investext's investment banking reports.

So that's my recipe for industry research and for a Spanish Coffee. When the drink is served, they light the rum on fire and it's quite spectacular. That's how I feel when I deliver the research project to the client--ta-da! I know I've done the best I can, given the budget that I have. The client wanted the current status of the industry and forecasts of where it is heading, and when I finally am done with my research and it leaves my office with my name on it, I know I'm delivering a good product.

It sounds like you have integrated the Net into your research; obviously, there's a lot that you can do now on the Net that you couldn't do a few years ago. How do you think your searching has changed because of the Net?

It goes back to this recipe I use for searching. My searching of the professional online services is pretty systematic, and I guess I'm a bit impatient when it comes to the Net. I don't have a lot of time and patience to sit back and marvel at the glory of the Internet and say, "Isn't all of this just incredibly wonderful? And I love these images! And look at that Java applet!" I don't care about all that. On the other hand, I don't feel that I've done a good search unless I've searched the Internet. It goes back to my offering due diligence research for my clients--I could miss something really important if I don't look on the Internet.

I don't know if the Net has changed my searching, but it's added a different component to it. There is definitely some juggling of time and budget that I had to figure out. Let me explain first how I price my services for my clients: I decided to make it sort of a package, you get an industry researched for X dollars. At first, I thought I could save my clients a lot of money by going to the library, because the public libraries here in Portland are amazing. But that required me to walk down to the library and I realized that, although I was saving my clients some money in online costs, it was taking me twice as long to do the work. So over a period of about a year I fine-tuned how much time I was willing to spend online and how much money I could justify charging the client, because the cost of my product is what the market will bear.

The other thing about search habits is that it's so important to know the search engines, yet it's hard to break my old habits and get proficient on the new Net search tools. I guess that goes back to my lack of patience and why I love Dialog--I know how to search it and it stays reasonably stable. With all the new search engines coming out, I feel like I'm starting from square one all the time. While at a conference, I heard people saying, "Hey, did you hear about Northern Light?" And I thought, "What?" I feel like I just keep getting farther behind. But that's why those conferences are important; they help me keep up on new developments that I might not discover on my own.

Do you get many clients saying, "Gosh, you used the Internet for this; why are you charging me so much money?"

Nope. If they did, I'd say, "OK, go do it yourself." A lot of my clients come to me because they've found out that research isn't all that easy on the Net, and they don't have the time to figure it out anyway. Sometimes I'll get a client who will tell me that they have someone in-house who's looked all over the Internet and that they realize they need to hire me, because what they needed wasn't on the Internet after all.

I pay for a table-top exhibit at about three trade shows a year. The Internet's always the hook, and I even give out a bibliography of my favorite Internet sites for business appraisers. I know that even if they used all of the links I provided, chances are they won't find enough to write an overview. And they'll say, "Gosh what a great job you have! You do all your work on the Internet." And I say, "No, I only do about thirty percent of my research on the Net."

There are so many databases available in a number of formats and on a number of online services. How do you decide which format and which source to use?

A lot depends on the interface. Take Investext as an example. I've looked at it on Dow Jones [21], I've looked at it on Dialog, I've looked at it on Investext's I/Plus Direct, and I truly like it best on Dialog.

It's the same with market research reports. I might pay a little more on Dialog, but I don't care because I don't have to learn a new search language or figure out a new interface. In general, I won't log on to the Internet just to save a dollar. I get dumped off the Net at least three times a day, and I'd rather pay a premium to know that's not going to happen during a search. As a matter of fact, that's what bothers me about Dow Jones moving to the Web, although I understand that they're still supporting dial-up access. I love dial-up, and I just think it's a much better connection. So whether or not I have to access a service through the Net is one of the biggest factors in deciding where I'm going to search a particular database.

The same goes for selecting one online service over another if it'll save me a dollar here or there. If I'm taking an extra half-hour to do a search on a service I'm not as familiar with, that's a big chunk of my profit. When I set the price for my average industry profile, I allot myself three hours for research. If I take an extra half-hour to find the information, I'm eating away at my profits.

It's especially tricky since I'm outsourcing more. I don't have the time to teach that person how to search Dialog. I know the new version of DialogWeb will alleviate some of my worries. But that just complicates the decision of which service to recommend. Which one do I tell her to use? Which one do I train her on?

How do you stay updated on all the new search engines and online services that are coming out?

I probably don't do it very well. For search engines, I rely on Greg Notess [91], and I always read his columns. And I read Searcher [94], Database [77] and Online [92] cover to cover. I love CyberSkeptic's Guide [76]; it looks more to the practical side of searching. I also read Yahoo! Internet Life [101], and any of the other Internet magazines when I see them. I'm out of control--I even read when I work out on the Stairmaster. Some people are reading People magazine, and I'm reading Internet Life .

Do you rely much on electronic discussion groups?

No, they bother me. It's just that I suffer from information overload. I've sometimes seen things that I've wanted to respond to, but I don't get around to it until it's way too late. I do like the SLA Business & Finance listserv [67], because when someone posts something there, I know it's a good question.

What do you do when you are in the middle of a search and just not finding what you want?

When I am flailing, I will usually pick up the phone and call people in a relevant trade association. I'll say "I have done all of this and this and this, and I'm still having trouble finding information." People are usually pretty kind; they'll say, "Well, when you find it, let me know." They don't know! And that's confirmation for me that I'm not really out to lunch. If this head person in an industry group says "Good luck!" maybe the information just isn't out there. Sometimes I'll call an expert researcher in the field and ask, "Am I missing something here, or is this just a really hard search?"

Have you noticed an impact of electronic mail on your business clients? Are they expecting reports to be delivered sooner or in electronic format?

A lot of people want things in email. And the issue of immediacy is a real problem. A lot of my clients call me because they've waited until the last minute, or they've tried to do the research themselves and now they're up against a wall. Unfortunately for me, they also need hard copies for their files. I have yet to have a client tell me to just put it on a diskette and mail it to him. For that matter, I'm still going to the library and photocopying material for clients. So I email what I can, but I always follow up with hard copy. I'm certainly not a paperless office.

How do you handle delivering information from Web sites? Do you print it off and send it to your clients, or do you give them the URL so they can go get it themselves?

My whole thing is service, so I'll print it out. My clients are hiring me to save them from all of that. But I should mention that the Internet poses special problems for me. I do a lot of historical research, because a business valuation means that the business is going to be valued at a specific point in time. The rule of thumb is that all the information you find must have been available before that specific point in time. Say the valuation date is December 31, 1998. I cannot use anything published after that date. This is where the Internet has posed some problems for me; I might find something outrageously great on the Internet but there's no date on it, so I have to email the Webmaster and ask when this page was published. If the valuation ever went to court and they found out that they were using data published after the valuation date, they could get in big trouble.

I treat what I am looking at on the Internet as if it were in a hardcopy magazine. I'm always looking for a publication date. I'm just afraid that it will say, "This was added to the Internet on XYZ date," which doesn't mean anything to me. I'm still not assured that the information was actually available on the valuation date. If it's not perfectly clear to me, I will write to the person managing the Web site and save their reply. It's just due diligence; I have to do it to cover myself. Some appraisers don't care, but as far as I'm concerned, it's pretty important.

I deal with a lot of issues involving reliability and retrievability of Net sites. In fact, I'm calling someone at a trade association today about a great chart that's on their site. It talks about yearly sales of swimming pools, but it doesn't indicate whether the figures are in millions or thousands, and there is no date on the Web site so I can't tell how current it is. Fortunately, I've had pretty good luck in getting people to respond to me. In fact, after I gave a presentation at the Online World conference, someone from the National Restaurant Association came up to me and said "I know you! You've called us several times, and I recognize your name."

Maybe if enough of us keep asking those questions, they'll do a better job of self-documenting the Web sites. Can you describe a project that was particularly interesting or fun?

It was when I was working with Kevin Kelly as he was writing his book, New Rules for the New Economy . What made this job interesting, fun and challenging was that he is such a thinker. I hate to use this cliché, but he really does push the envelope, and he made me do that too. Once I got started, I realized that if I was going to do the type of job he wanted me to do, I would have to extend my thinking. What was so fun was that it made me fall back on a lot of theory that I learned in library school--like the old question, "Who would publish this? Who would care?"

It took research to a whole different level for me. I was out calling people. I was physically out of my office doing primary research. I really had to span the disciplines, and that's what I remember most about library school--being challenged to think outside of your typical research patterns. Instead of just thinking, "What database do I use?" I was looking at historical material in the library, I was online, I was all over the place. It was a great project, because it did challenge my whole notion about how to find information. I did a lot of Internet research, but it was really tough work.

For example, he asked me a question about what the world is worth: What is it worth to replace all the infrastructure in the world? I worked on that for hours. I thought that maybe the insurance industry could help me because everything's insured, right? Maybe I could at least come up with a base that you could make a model on. I was really pushing it, and a lot of times I just came up with zero. It was both a dream project and a nightmare project, because it was so challenging and I really felt like I was being pushed to the maximum. I never met Kevin face to face, but he sent me a copy of the book when it finally came out with the nicest note in it. He said that this book couldn't have been what it was without my help, and that my research allowed him to go much deeper than he could have otherwise.

What do you enjoy most about this profession? What keeps you doing this instead of going out and being a gardener or something?

I think a lot of it is my personality; I like finding the answer, knowing it's out there. And I like being able to use my brain to figure out a question and to answer it. The more years I have in the profession and the better I get at it, the more satisfying it is. I'm rarely bored. Maybe the searching is routine, but I always learn something. And I find that extremely rewarding.

And what do you like least about it?

When my computer crashes or when I get bounced off the Web. The technology just gets in the way of finding the information. One thing that I really liked about Kevin Kelly's project was that I got to go to the library and sit there with stacks of books. My next career will be as a massage therapist or working with search and rescue dogs, I swear. Not that I'm a Luddite, but sometimes it seems that there's just too much of a focus on the technology.

What are your thoughts about the future of the information professional?

I don't know if our jobs will change that much in the next five years or so. I think there may be more demand for our services, because people only have so much time in the day to find information. I think that our role will always involve looking over information and synthesizing it for people, acting as a filter. That's where I think we're very important. Sure, you can get thirty articles on a subject, but does someone really want to read thirty articles? I think we will definitely need more subject expertise. There's so much information out there; we should be the ones who have the knowledge to say, "Don't look at that--that's not viable information; look here instead."

I really hope that we don't lose the ability to do command-language online searching. All these vendors trying to attract the end-user market makes me fear that the information product itself is going to suffer. At a conference, I heard a public records researcher say, "Don't forget about all the value-added features of a fee-based service." It's so easy to look at conference exhibits and think, "Wow! This is only going to cost me a dollar!" or, "You can get it on the Web so much cheaper." But you might lose a lot of the indexing, or you might lose a lot of other qualities of the databases that we like so much. The public records speaker said, "Don't get caught up in all of the fervor of `get it on the Web,'" and I completely agree with that. For all the glitz of the Net, there are still reasons to use the tried-and-true services. We can do more powerful searching, we have a lot more control over the searching, and we understand what the universe is that we're searching. All of that makes for a better information product at the end.

I remember Patrick Wilson, one of my professors in library school, who gave these crazy lectures. He'd stand on the edge of the platform, and he'd be preaching, practically. "Don't forget the big picture, and don't forget who would write about it. Who cares about this information?" I think about that all the time. If I walked away with one thing from library school, it was what he said. When I get really carried away on the Web, when I'm following links and I can't find something, I log off and I think back to that. And I realize that it might not even be online--what a concept! That became perfectly clear with Kevin Kelly's project.

Super Searcher Power Tips:

* I've developed a standard research methodology. It's what enables me to manage my time and manage the tremendous number of data sources we have now. I had to come up with a routine to save my mental health.

* This is the ironic thing--I start my online research with a book! Once I get an idea of some of the major publications and the trade associations in the industry I'm researching, then I go online.

* When I search Dialog, I'll look for index terms such as "industry-wide conditions" or "forecasts."

* I rely heavily on my bookmark files; it isn't until I'm really desperate that I will use a Web search engine.

* I think that our role will always involve looking over information and synthesizing it for people, acting as a filter. That's where I think we're very important.

Foreword	p. ix
Acknowledgments	p. xiii
Introduction	p. xv
Business Valuation Research	p. 1
One-Man Library	p. 17
Independent Info Pro and End User	p. 31
Competitive Intelligence Expert	p. 51
Wide-Spectrum Business Searcher	p. 69
Business Investigator	p. 83
Ad Industry Info Pro	p. 99
Author and Editor	p. 115
Information Professional Down Under	p. 133
Primary and Secondary Researcher	p. 153
Vendor Liaison and Instructor	p. 167
Referenced Sites and Sources	p. 185
Glossary	p. 197
Index	p. 199
About the Author and Editor	p. 207
Table of Contents provided by Syndetics. All Rights Reserved.

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