Business Unusual

Connecticut Art School Learns Business Lessons; Argus Systems Offers Ultimate Internet Security; Indian Entrepreneur Designs World- Class Cars

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RHONDA SCHAFFLER, HOST: Ahead on BUSINESS UNUSUAL: A Connecticut art school learns a tough lesson in business, and bounces back; a high-tech startup rewrites the rulebook on network protection; and an Indian entrepreneur revs up his auto design firm nearly 10,000 miles away from the Motor City.

Those stories and more all ahead on BUSINESS UNUSUAL.

Welcome to BUSINESS UNUSUAL; I'm Rhonda Schaffler. Sometimes even educational institutions have to learn tough lessons. The Brookfield Craft Center in Brookfield, Connecticut is a case-in-point. Like many non-profits, the center historically has been dependent on contributions to keep it going, but the economic downturn has caused donations to dry up, and as a result the craft school is giving itself a makeover.

Valerie Morris has the story.

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VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Brookfield Craft Center honors and cherishes the work of craft artists and the traditions of American crafts.

ANGELA WAGNER, STUDENT: I think it's important not to lose our -- really important, this is a very old art and if we don't teach it it will get lost.

JACK RUSSELL, EXECUTIVE DIRECTOR, BROOKFIELD CRAFT CENTER: The mission is always first, and to promote and preserve the skills and values of fine craftsmanship is at the heart of everything we do.

MORRIS: In the early '90s, the center took on an equally daunting preservation project, ensuring its own survival in the face of dwindling donations, mounting debt and a rundown campus.

RUSSELL: In the 1990s, most nonprofits underwent terrific turmoil. The good days of the 1980s were over, and the hard times and the corporate downsizing of the '90s was taking place. So many nonprofits lost their base of support. Any nonprofit that wanted to survive was going to have to reinvent itself and conform to the new realities of the '90s. BRUCE WALLACE, CHAIRMAN, BOARD OF TRUSTEES: We needed to restructure the board, we needed to handle the organization very much as though it was a small business, because essentially that's what it was. We had employees, we had a product.

RUSSELL: We restructures our board of trustees, looking for people with specific skills that we needed -- finance, marketing, physical plant development and information and communication abilities.

MORRIS: Brookfield's new trustees took a hard look at the center's activities and assets, analyzing every facility, every workshop, every program and policy. All were judged by how effectively the cost served the school's mission.

The board developed a new model for fund-raising and contributions, seeking donors who wanted to be partners in achieving the center's long-range strategic goals.

RUSSELL: Guy came on the scene with his family members like a gift from heaven.

GUY BIGNELL, PRESIDENT, LYNN TENDLER BIGNELL FOUNDATION: My wife and I had the opportunity to talk before she passed away.

MORRIS: Guy's wife, businesswoman Lynn Tendler Bignell had died, leaving funds for a philanthropic foundation.

BIGNELL: She wanted to give back to the community in some way. She had grown from a desk and a telephone the largest female-owned research firm in the world. American craft was also her passion. Therefore, an American craft center was the obvious choice.

MORRIS: The family wanted more than a plaque on a wall.

BIGNELL: We were also looking for an organization that we could invest our money, so that it would have some type of perpetuity.

MORRIS: The Bignell family looked at the management, guiding the activities in side the weathered buildings.

BIGNELL: Here you would be quite amazed at the two sides of the craft center. The Jekyll and Hyde, if you will. On the one hand, you've got the beautiful, babbling brook and the lovely surroundings and the arts and crafts, and then you've got the, how to we pay the bills?

MORRIS: Brookfield had the vision the family wanted and the business savvy it needed.

BIGNELL: What we did, was to form a partnership with the center, and we invested a six-figure sum.

RUSSELL: Guy and his family brought with them ideas and support mechanisms beyond the finances.

MORRIS: Bignell enthusiastically joined the projects the foundation funded.

RUSSELL: One of the first things we did with the LTB money was to repair a leaky roof on this 200-year-old building.

MORRIS: More money was used for master-level classes and an impressive gallery, bringing in more students and revenue, and enhancing the center's reputation.

KRISTIN MULLER, EDUCATION DIRECTOR, BROOKFIELD CRAFT CENTER: With the new gallery, we've been able to attract not only the media coverage, but also the interest from the artists who would like to be affiliated with the Brookfield Craft Center.

MORRIS: Gift certificates, instructional videos and craft sales add to the profit margin.

RUSSELL: Well, I'm happy to report that the craft center's been profitable for the last five years.

MORRIS: Enrollment and sales are up by about 50 percent, and the campus radiates vitality.

RUSSELL: Well, we learned that it certainly takes money to make money, but also, it takes a very careful balancing act, because when you're thinking about profitability in the nonprofit world, it may be easy to lose sight of the reason you're really here. And the reason you're really her is to carry out you mission to serve people.

WALLACE: We are now looking for further partners. We are not looking for hand-outs; we're looking for people who want to come and partner with us and enjoy the whole aspect of the crafts and the craft world. And if there's anybody out there with $1 million, please step up to the plate.

MORRIS: For BUSINESS UNUSUAL, I'm Valerie Morris.

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SCHAFFLER: Just ahead on BUSINESS UNUSUAL: a technological security blanket; why an Illinois company is taking a new approach to protecting e-businesses from hackers and cyber-terrorists. A look at Argus Systems when we return.

(COMMERCIAL BREAK)

SCHAFFLER: If there's one thing that has spooked the Internet industry more than the recent downturn in the economy, it's been the ease with which hackers have been invading the Web sites of some of the industry's top names. Better security is one of the most pressing priorities for e-business.

Bruce Francis has the story of one Illinois company planning to rewrite the rulebook on network protection.

(BEGIN VIDEOTAPE) BRUCE FRANCIS, CNN CORRESPONDENT (voice-over): The Y2K bug may have been a non-event, but the year 2000 still ended badly for the world's biggest name in computer software.

(BEGIN VIDEO CLIP, "MONEYLINE," OCTOBER 27, 2000)

WILLOW BAY, CNN ANCHOR: A case of high-tech espionage rocked the Microsoft campus today.

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FRANCIS: Hackers made away with portions of the company's crown jewel: the Windows source code.

RANDY SANDONE, ARGUS SYSTEMS: That's the message that says those systems need to have greater security.

FRANCIS: For Randy Sandone, the Microsoft case is final proof that, if the Internet wants to resist the hackers, it needs to reinvent its defenses.

SANDONE: I changed the whole architecture and the whole approach to providing security for e-business systems.

FRANCIS: His company, Argus Systems of Illinois, has spent eight years working on just such a new approach and, as of early 2001, he believes he's found it with Pitbull software. A name inspired by his pets.

SANDONE: Pitbulls, of course, have a reputation as being vicious and rather fierce guard dogs and defenders.

FRANCIS: To prove his confidence in this pet project, he backed it with cash: $50,000 to anyone who could successfully hack into a specially prepared Web site.

SANDONE: Bring it on!

FRANCIS: The competition was launched and monitored in early January by software industry magazine "e-Week."

ERIC LUNDQUIST, EDITOR, "E-WEEK": Our goal is to really try to look at different types of security methods and be able to advise what the best one is for people to use.

FRANCIS: The magazine's on-line video show laid down the gauntlet to the global hacker community.

ALEX URBELIS, HACKER: The first thing I would do would be to port-scan.

FRANCIS: Alex Urbelis discovered computers relatively late for a hacker.

URBELIS: I started, probably when I was about 14 years old. That was when I first got a computer. FRANCIS: But these days he has turned from the dark side and works as a security engineer for a software company. We asked him to test the Pitbull system.

URBELIS: As a person that's testing the security, you're in an antagonistic struggle with the server.

FRANCIS: In most networks, that server will be guarded by what's called a firewall, a virtual defense on the perimeter of the system. Anyone requesting access is screened at the gate.

Argus argues that this approach cannot cope with the rapidly expanding Internet.

SANDONE: You simply cannot define the perimeter of e-business systems anymore. You're connecting to consumers, you're connecting to partners, you're connecting to financial institutions.

FRANCIS: That means multiple entry points. And once past the front door, a hacker can destroy anything and everything. So instead of building an outside wall, the Argus system works in the heart of the computer, guarding from within the operating system itself.

SANDONE: If the controlling piece of software on the system is actually enforcing the security policy, then there is no way to violate the security policy; it's just simply impossible.

FRANCIS: And even if hackers do break past the virtual front door, they find the rest of the rooms in the house are also locked.

URBELIS: I do believe that their system is secure. I wouldn't be able to hack it.

FRANCIS: Nor could anybody else. At a trade show in New York, after 16 days and 5.4 million recorded attacks on their computer, Argus declared victory.

UNIDENTIFIED MALE: We had a hacker that gained route permission on the server, OK; route permission means that you own the server in a standard commercial operating system environment, and you can -- you know, you know, you can wipe the hard disk, you can change files, you can modify files, you can do everything you wish. It didn't happen on our system because of the nature of the system and the way that we have security on the last mile by design.

FRANCIS: But not everyone is willing to declare that the security war has been won.

UNIDENTIFIED MALE: I am still convinced that there's no absolute secure system, you know, in the world.

FRANCIS: All it would take would be a different approach.

URBELIS: I would go to Argus' Web site, I would get the names of some of their technical people and I would call up somebody that's using their software and say, yeah, hi, this is Jim Smith from Argus; there's been a security flaw with that. I'm going to need to go in, I'm going to need to make some changes, I'm going to need your route password to do that. And if you have an idiot on the other side, he's going to give it you.

FRANCIS: No software will guard against incautious staff, but for Argus, software is the first step in protection, and the company believes their approach will take a big slice out of a huge and growing pie.

SANDONE: The industry analysts suggest that there will be $7 billion spent on information -- on Internet security in year 2001.

FRANCIS: Many industry giants like IBM and Sun Microsystems are already working with Argus to secure their systems. One has yet to sign on: Microsoft.

For BUSINESS UNUSUAL, I'm Bruce Francis, CNN financial news, New York.

(END VIDEOTAPE)

SCHAFFLER: Coming up next: We'll introduce you to a New York city gallery director who is opening the public's eyes to some little- seen artists. His story when BUSINESS UNUSUAL returns.

(COMMERCIAL BREAK)

SCHAFFLER: When Ron Shipmon took up a career in art, he didn't think of it as just a job, he saw it as an opportunity -- an opportunity to introduce the public not just to new works, but to artists from a wide range of ethnic backgrounds. But it hasn't been so easy.

Amanda Lang visited Ron Shipmon at the American Gallery here in New York to find out just how he is making the art world more inclusive.

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AMANDA LANG, CNN CORRESPONDENT (voice-over): So tell me how a kid from Georgia becomes interested in art in the first place?

RON SHIPMON, GALLERY DIRECTOR, THE AMERICAN GALLERY: I guess my mother was the influence; she would read poetry to me and we'd draw together and I had a passion for it, but I was dreadful. I studied pottery, watercolors, oil -- I even tried print-making; it was dreadful. And I thought, if I couldn't do it, I'd want to be surrounded by it; and this kind of helps me fulfill my frustrations.

LANG: So you've worked in a London gallery, a mainstream London gallery?

SHIPMON: Yes; German expressionist and contemporary art. A kid from Georgia in England working for a German; that was interesting.

LANG: Very interesting. How and when did you realize that there was an issue, any issue of race at all or culture in mainstream art?

SHIPMON: When I moved back to New York from England I answered an ad in "The New York Times" for a gallery on the upper east side. The gallery director told me I sounded perfect, please come over. Sprinting, literally, across the park, I get to the gallery and extended my hand and my resume, and she didn't realize I was black. So I thought, after some soul-searching, that if I have just gone through this, what must the artists of different ethnic backgrounds go through in trying to get their work exhibited.

So I founded the Council for American Minority Artists, and the opening goal of that organization, which was founded in 1989, was to open the American Gallery so that the artists would have a permanent home for their work.

LANG: And you could be a gallery director, which is something you have wanted to do?

SHIPMON: Yes.

LANG: And how do you find you artists now? You have the American Gallery, I know you have frequent shows.

SHIPMON: They come from various areas. Some hear about us from word of mouth; we do some advertising. The art world is a small community, so they really come knocking. And we can't provide exposure for all of them, but we provide exposure for as many as we can.

LANG: Do you have a criteria? I mean, do you have a way to isolate which artists are perfect American Gallery artist?

SHIPMON: Primarily -- the primary issue is that the work has to have integrity. And if I see that, then throughout the exhibition schedule we can find placement for the artist.

LANG: Tell me what you mean by integrity.

SHIPMON: It has to have passion; it has to mean something. I was an artist, I was horrible -- I had no integrity; I had a whole lot of heart, but my execution wasn't good enough. And we can't all be artists; they have a special message and it's their particular form of communication -- writers write, singers sing -- this is how they communicate to the world.

LANG: Do you sell -- do your artists sell well?

SHIPMON: Yes they do, and they're all very happy. The gallery is not for profit, but it functions in the way that a commercial gallery does -- it's just that some of our dollars come from not-for- profit organizations...

LANG: Are you supported by corporate America? SHIPMON: Colgate-Palmolive is one of our sponsors; Austin Nickle (ph) & Company; we get money from city government. So there's money coming in from various areas to make the dream happen.

LANG: How do you define success? With one of your artists, what's a success for you?

SHIPMON: Success is a multicultural artist gaining some recognition in the mainstream. And I think we achieve that at the American Gallery; for example, the exhibition tonight for Myra Green (ph). She's 25 years old; her debut in New York. Of course, she had to go to Albuquerque, New Mexico to come back to New York, because she was born here..

LANG: That's the way it works. Where would she go from here? What's the typical path for...

SHIPMON: We will try to get exposure in magazines and also museum exhibitions.

LANG: Where will you go from here? Is this it for Ron Shipmon?

SHIPMON: No, it's not; I think, maybe I'll make a film at some point.

LANG: A film about art, or a...

SHIPMON: Of course.

LANG: And will it be fiction or will it be nonfiction?

SHIPMON: Oh, you'll have to wait and see, won't you?

LANG: Is the gallery a success financially?

SHIPMON: Yes it is, but we can always use support from every area possible.

LANG: And in terms of finding new artists, how do you reach out to them?

SHIPMON: Our Web site; again, word of mouth; publications that allow us to advertise per...

LANG: You Web site is AmericanGallery.com?

SHIPMON: AmericanGallery.org.

LANG: Dot-org.

SHIPMON: Five-0-1C3 Organization (ph).

LANG: OK. Ron Shipmon, director of the American Gallery, thank you very much.

SHIPMON: Thank you, Amanda. (END VIDEOTAPE)

SCHAFFLER: And just ahead on BUSINESS UNUSUAL: the drive to succeed; we'll introduce you to a car design firm hoping to, one day, give the big three automakers a run for their money from halfway around the world.

The story of India's DC Designs when we return.

(COMMERCIAL BREAK)

SCHAFFLER: Nearly 10,000 miles away from Detroit, an Indian business is hoping to change the look of the automobile industry. Anish Traveti introduces us to the mind behind DC Design and his drive to succeed.

(BEGIN VIDEOTAPE)

ANISH TRAVETI, CNN CORRESPONDENT (voice-over): Every young boy plays with cars; some even dream of racing them when they grow up.

Dilip Chhabria was just a little different: He wanted to build them. So while other kids he knew were becoming bankers and lawyers, DC, as he is known, learned how to design cars. Using the family plastics business as a springboard, he began designing and making car parts.

DILIP CHHABRIA, DC DESIGN: A large number of parts in the car are made of plastics; and therefore, with that background, it was far easier for me to do my first project.

TRAVETI: DC's timing was perfect; in the early '90s India began liberalizing its economy. This meant more cars to work on and more people with the money to customize them.

CHHABRIA: That business went on to become a very mature business. I made my own capital; I was independent. I didn't have to go to the bank or to my parents.

TRAVETI: With this success behind him, DC turned to designing cars.

CHHABRIA: There was a desire that was absolutely a burning desire, burning to make sure that I did the sum of the parts, that is a car, and not just the parts.

TRAVETI: He started DC Design in 1993. His first job: a converted Suzuki Gypsy 4x4 drew stares everywhere it went.

CHHABRIA: It would be parked outside a restaurant or a club; by the time I would emerge from having lunch I would find a couple of people staring around the car, asking me questions.

TRAVETI: Those stares translated into work for the fledgling company, and each new car they put on the streets became a salesperson for them. CHHABRIA: We have grown 100 percent every year. One good effort going out into the streets got you two or three jobs.

TRAVETI: Chhabria expects sales to increase from about $1 million last year to about $8 million three years from now. His confidence is backed by investment bank Jardine Fleming, which recently acquired 10 percent of DC Design.

But for Chhabria, validation of his business comes from the fact that he works closely with industry giants, including Ford and Daimler-Benz in designing the next generation of cars.

CHHABRIA: We are positioning ourselves to cater to the global design and double up in business.

TRAVETI: Dilip Chhabria doesn't care where a car is manufactured, as long as it says visibly, created by DC Design, India.

Anish Traveti for CNN financial news, Mumbai.

(END VIDEOTAPE)

SCHAFFLER: And that is BUSINESS UNUSUAL. If you missed any of today's program, you can catch it on the Web; just go to the "on TV" section of CNNFN.com and click on BUSINESS UNUSUAL.

I'm Rhonda Schaffler; thanks for joining us, good-bye from New York.

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