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 faxed the agreement to Perot. An hour later he called: “Good, good. I like it. Come on down on Monday.”
Monday, March 7
I arrived in Dallas Sunday evening and stayed with my brother. I had given Perot my brother’s office number, and I went to his office at seven-thirty to await Perot’s midmorning call. Just as I was walking in the door, the secretary was answering the phone. A look of incredulity washed over her face as she pressed the hold button: “Are you Steve McElroy? Ross Perot is on the phone for you.” Perot told me he had finished early—“What time did he start?” I wondered—and gave me directions to his North Dallas office.
Nervously swigging from the cup of coffee that I was counting on to spur me on to peak performance, I pulled into the parking lot of the impressive silver-glass office tower. Outside the car, I hastily balanced the components of my Total Top demo set on my briefcase to free a hand to lock the car door—and jostled the coffee cup, spilling its contents all over my shirt and tie. Within seconds of the most important meeting of my life, I stood drenched in coffee. Oh, well. Emerging from the elevator on the seventeenth floor, I identified myself before one-way mirrored doors. A male attendant allowed me to pass through the doors, by his small wooden cubicle, and into the simply decorated lobby. I passed an eagle-shaped wall hanging captioned “Eagles Don’t Flock” and a collection of carved wooden birds and wild animals arranged along a wall recess. There were a few wing-back chairs arranged around side tables, a large bronze bust of Abraham Lincoln, a few paintings, and a framed Early American flag. Beyond the lobby, through another set of glass doors, I could see a long corridor lined with Norman Rockwell paintings, a few bronze busts, and framed awards and memorabilia.
After a few minutes, Perot’s secretary escorted me down the long, imposing corridor, through yet another set of glass doors, into Perot’s suite of offices. As we entered, I could hear him talking on the phone. As I waited, a very attractive blond woman who I guessed to be in her mid-twenties walked past me and into Perot’s office. A few minutes later, she emerged and introduced herself. She was Nancy Perot Mulford, one of Perot’s four daughters. She worked with her father on his venture capital projects. She was kind and polite, and I immediately felt at ease with