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The FreeMarkets Story: Founders Meakem and Kinney saw an opportunity

Sunday, December 12, 1999

By Joyce Gannon, Post-Gazette Staff Writer

On a sweltering night last June, about 80 high-tech business leaders and their spouses showed up at the Shadyside home of retired Mellon Bank executive Jeff Morby for a fund-raising pitch.

  Glen Meakem, co-founder, chairman and chief executive of FreeMarkets Inc. (Lake Fong, Post-Gazette)

Despite the intense heat and humidity and the fact that Morby's home wasn't air-conditioned, the group was captivated by the evening's featured speaker: 35-year-old Glen Meakem, co-founder, chairman and chief executive of FreeMarkets Inc.

It fell to Meakem that evening to persuade the crowd of mostly young entrepreneurs and their wives to donate big bucks to the construction of the Pittsburgh Public Theater's new Downtown facility, the O'Reilly Theater.

"It was oppressively hot and humid," recalled Sean Sebastian, managing principal for Birchmere Investments, who was at the dinner event and whose venture capital fund was an early investor in FreeMarkets. "But Glen made the case with these early-stage tech companies, that are mostly cash-starved, that there's got to be a civic contribution on their part."

Friends and acquaintances of Meakem aren't at all surprised he was tapped for a leading role in raising money for the Public Theater.

Though his Internet auction business is four years old, his enthusiasm for the city and his charismatic speeches are a natural to inspire other high-tech entrepreneurs to give generously to civic causes, they say.

Observers point to Meakem's incredible energy, coupled with co-founder Sam Kinney's quiet, but equally intense devotion to their company's technology, as the winning combination that has brought FreeMarkets great success so quickly.

"It's a great partnership," said Leslie Wild, senior development officer for the Public Theater, who recruited Meakem to the New Economy Challenge, an effort to generate 25 percent of the theater's $12.8 million capital campaign from young, successful companies such as FreeMarkets.

    The FreeMarkets Story

What the future holds is always an unknown, but today, FreeMarkets Inc. is the toast of Pittsburgh. With its initial public offering of stock Friday, this Internet juggernaut saw its market value rise to number six among Pittsburgh-based companies, behind only Alcoa, Mellon, Heinz, PNC and PPG. Related reports:

Company's culture reflects a broader change in the way Pittsburgh is doing business

New economy winners taking off with a boost from the old

Landing the big one

Birchmere's first home run


"Glen is the outside guy, and Sam is much more laid back," said Wild, who has gotten to know both executives well over the last two years. "If you had to distinguish, Sam is probably the technical genius and Glen is the marketing genius. That's why they are a perfect match."

Take the company's support for the Public Theater.

Meakem took the out-front role in trying to encourage other high-tech companies to support the cause, said Wild, "But there's no way Glen could have accessed this kind of support without his friend and partner Sam's blessing. He just wouldn't do it."

FreeMarkets made a corporate donation of $100,000 and Meakem threw in $110,000 of his own money on top of that, according to a recent report in the Chronicle of Philanthropy.

It probably didn't hurt the Public that Meakem, known for being quick on his feet in both social and business settings, acted in some plays during his days at Harvard University and has a brother who's an actor in New York City, said Wild.

"This is a guy with a lot of energy and commitment, not only to making his business a success but to the success of the continued vitality of Pittsburgh," said Bill Cogger, chief executive of RedZone Robotics, who became acquainted with Meakem through the Public's New Economy Challenge.

Meakem, who's become an outspoken booster of Pittsburgh and its quality of life, never set foot in the city until he arrived in early 1995 to launch FreeMarkets with Kinney, who was a consultant in McKinsey & Co.'s Pittsburgh office.

They declined to be interviewed for this article because of a "quiet period" imposed on FreeMarkets by the Securities and Exchange Commission prior to its initial public stock offering.

Meakem, however, spoke at length about Pittsburgh in a PG Benchmarks Roundtable Discussion published in March:

"It's a low-cost, low-crime, high-quality-of-life place. It's got great universities, a hub airport that's terrific ... It is a huge strategic asset to have this, with this great little Downtown, with the rivers and this natural setting we have. If you could connect that airport to this Downtown, and have a reasonable tax situation ... you would suck corporations in here like there was no tomorrow."

Before starting the company, Meakem and Kinney had known each other three years, having met in 1992 when they both joined McKinsey, a national consulting firm.

"They went through McKinsey's boot camp together," according to Sebastian, who knew Kinney socially before he started FreeMarkets.

  Sam Kinney, co-founder of FreeMarkets Inc. (John Beale, Post-Gazette)

Though they were assigned to different McKinsey offices, Meakem and Kinney, who's also 35, kept in touch and were both ready to take the plunge into a new business when Meakem proposed the idea of creating an Internet auction site where companies could purchase supplies more cheaply.

A native of Armonk, N.Y., Meakem holds a bachelor's degree in government from Harvard University and a master's in business administration from Harvard Business School. From 1987 to 1989 he worked for Kraft-General Foods Corp. in product marketing. As an officer in the U.S. Army Reserve, he served two tours of active duty including a stint as combat engineer platoon leader in Operation Desert Storm, a job he volunteered for, he told Business Week, because Saddam Hussein "kind of pissed me off."

Acquaintances say Meakem came up with the fundamental idea for an Internet auction site when he was a manager in General Electric Corp.'s corporate business development group in 1994 and early 1995.

Kinney suggested they launch the company here and Meakem agreed, he has said in interviews, because FreeMarkets needed proximity to its mostly Midwestern, industrial customer base but also needed a talented supply of technology workers that it figured it could recruit from the city's universities.

During the company's first years in business, Meakem and his wife, Diane, a full-time homemaker, lived in a cramped rental apartment in Moon, said Sebastian. "They sacrificed some standard of living in order to put everything they could into the new business." About two years ago, the couple bought a house in Sewickley, where they live with their three daughters, all under age 10.

"He was on the fast track in corporate America," said Sebastian. "And he saw this opportunity when he was at GE. It could have been a small division of GE, but they didn't move fast enough, so he moved here to Pittsburgh to do it on his own."

Kinney, who also resides in Sewickley and is married to Trish Kinney, has three sons under age 10. He grew up in the Cleveland suburb of Shaker Heights and earned a bachelor's degree in economics and his MBA from Dartmouth.

Kinney has also worked for management consulting firm Booz-Allen & Hamilton and Lucas Aerospace Power Equipment Corp.

"Sam is probably the most intelligent person I've ever met," said Sebastian. While "Glen is the motivator and face of the company, Sam is very much the heart of the company. He's not nearly as visible to the outside world. But he's at least as important in making this thing fly internally. He is not one to draw the attention of everyone in the room like Glen would. But in a smaller circle, he's incredibly engaging and very funny."

At FreeMarkets' headquarters in One Oliver Plaza, Meakem and Kinney both put in long hours and work at the same frenetic pace as their 300-plus employees, say those who know them.

"I've been there any hour of the day or night and they're generally in the mix of it," Sebastian said of the founding partners.

"My impression is that Glen's a Bill Cowher kind of coach," said Andy Hannah, chief financial officer of Storm LLC, referring to the Pittsburgh Steelers boss. Hannah has gotten to know Meakem over the past year through an ad hoc business group, Entrepreneurs for Pittsburgh, that tries to collectively work on issues that affect small, emerging companies. "He's somebody who's in there working hard with his people and leading by example," said Hannah. "He's doing things with the team, not just directing it."

Meakem apparently carries that management style to other endeavors.

For instance, after he committed to head up the Public Theater's New Economy Challenge, he declined to assume the title of chairman of the effort, said Wild. "He was the first one on board, but he didn't want to disempower the other executives involved," she said. "That was a strategic move on his part."

At FreeMarkets headquarters, Meakem's office is not particularly plush and is filled with photos of his wife and daughters, according to Wild. He maintains an open door for all employees.

"They make decisions quickly there and there's no bureaucracy."

When they're not working, Meakem, a self-described conservative Republican, likes to golf and go to the theater; and Kinney is an avid fisherman and hunter.

They also like to socialize with their staff in casual settings, according to Sebastian, who said Meakem was an early sponsor of "Cool Tech" outings, which are happy hour mixers at various Strip District bars for employees of FreeMarkets and other high-tech companies.

At a FreeMarkets holiday party a year ago, Meakem took center stage to give an annual assessment of the company's growth and its contribution to Pittsburgh.

But he didn't talk revenues or contracts.

Instead, according to Sebastian, Meakem counted the number of houses FreeMarkets employees had purchased over the past year, the number of babies that were born to employees and how many romances were sparked in town because the company is based here.

"That's just indicative of his way of getting inside of people and inspiring them."

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