What is it like to do a deal with H. Ross Perot? in early 1988 a 29-year-old inventor from Austin named Steve McElroy had a patent pending on a one-size-fits-all lid for cups, cans, and other food containers. But to get his invention to market, he needed a savvy partner. He decided that he wanted Perot. Three days after McElroy mailed a letter to Perot, he received a call from Perot himself. For the next three and a half years, McElroy kept letters and notes of his dealings with Perot, as their partnership flourished and foundered and Perot put McElroy to test after test. Here is McElroy’s story.
February 22, 1988
Dear Mr. Perot:
Rubbermaid, Mitsubishi International, Continental Bondware and other large companies in the packaging industry have approached me regarding the exclusive rights to my patent pending for a biodegradable, one-size-fits-all lid for all soft drink cups as well as household containers for food storage.…
My problem is, Mr. Perot, I’m green behind the ears and could use some guidance from a negotiating standpoint. I’m 29 years old and I realize these negotiations go beyond my business experiences. I want to make sure my concept is in every store and in every household, instead of nondegradable plastic products. Do you ever take on partners for this type of transaction? … The cause is a good one and offers the opportunity to solve many problems for business, the customer and the environment while making an honest profit in the huge disposable packaging industry. I think that’s good business, Mr. Perot. Thank you.
ON AGAIN, OFF AGAIN
Thursday, February 25
“Steve, this is Ross Perot,” boomed the voice that I had heard so many times on television, in the salutation that would begin every phone conversation. “I got your letter and loved your idea,” he said and immediately began to fire questions at me. I reached for a chair to steady my shaking free hand.
Within seconds, he had fleshed out my background. “Well,” he said, apparently satisfied with my responses, “I can see this in every refrigerator in America. Can you Federal Express me a few so that I can play with them over the weekend? No, wait. I’ll be out of town next week. Can you come up here and see me midmorning on Monday, March 7?”
Six months earlier, I had invented the stretchable lid I call Total Top. When I filed for a patent, I sent a short press release to a few industry trade publications to see what kind of response I would get. Three hundred letters from soft-drink and fast-food businesses told me what I had hoped to hear. Now I had an appointment to see Ross Perot, the ultimate businessman, who represented honesty and integrity, as well as success. I’d be there.
Monday, February 29
Perot called again: “Steve, I have an assignment for you. Here’s my fax number. Would you briefly write down how you envision the two of us working together?”
I spent that day and the next hammering out a two-page agreement with my attorney, Mike Cook. The stock of our corporation would be owned fifty-fifty by Perot and myself, I would own the patent and license it to the company, and I would manage the company until such time as the patent was granted, the lid’s development completed, and a market for it established. Perot would supply marketing and management expertise and his name recognition.
On Wednesday, we