Jim Fruchterman - Part 1
(This is the first part of a two-part story)
What is it that drives someone to make such an extraordinary career change: from 'rocket scientist' with ambitions like most others in Silicon Valley to an entrepreneur with a strong desire to take his knowledge and skills along on a path directed toward the betterment of society? Jim Fruchterman is the founder of Benetech which has been an Associate Member of the DAISY Consortium for more than a decade. In January 2010, Benetech became a Full Member of the Consortium. This is Part 1 of Jim's story.
My story as a social entrepreneur began in 1978 in my Modern Optics class at Caltech, learning how to design lenses and build telescopes, cameras, and more advanced optical systems. I was fascinated with optics because you could literally see the results of your work in the lab. One day, our subject was Fourier transformations in optical processing—highly technical stuff—and the instructor's example was designing a pattern recognition system for smart missiles. In those days, military applications were the best job opportunities in the tech field. The missile in question would have a camera in its nose, and the software would incorporate the representation of a specific bridge, say. When the live image matched the pre-loaded image, the missile would lock on, swoop down, and blow up the bridge.
As pure technology, cool. But I wondered whether there might be a more socially beneficial application of this new optical processing technology. And then it hit me. Instead of recognizing targets to blow up, a machine could recognize words and letters, and then read those words aloud to the blind. I didn't know a single blind person, but why not design the world's first affordable reading machine for the blind anyway?!
It was an electrifying moment, and I was in love with the design I came up with over the following days. Even though it was pretty crude (involving a spinning film disk and a single phototransistor), this dream stayed with me, even as I took a couple of degrees from Caltech and moved to Stanford to work on a Ph.D. I'd decided to become a professor or an astronaut. That career path was derailed when I started a series of talks about entrepreneurship, and the second speaker was the president of a rocket company competing with NASA. At the ripe age of twenty-one, I was suddenly a "rocket scientist", the main electrical engineer of this company. I got the job mainly because Poul Anderson was the president's and my own favorite science fiction author (seriously, that was their primary interview question).
Less than a year later, our first rocket blew up on the launch pad, but the accident wasn't my fault and strangely enough the flames of that explosion actually ignited my entrepreneurial instincts. Together with my former boss and one of his friends, we soon started Calera Recognition Systems, raised $25 million in venture capital, and invented the first "omnifont character recognition technology", that is, a machine that could read just about any machine-printed font without requiring human training. To raise all that money though, we had to come up with real markets for a scanning machine, such as the insurance and legal markets. We built a product and launched it successfully into these markets. Our biggest competitor was Xerox, which had bought Ray Kurzweil's first company and were making both commercial scanners and reading machines for the blind.
Five years later, our engineers had taken our basic product, and repurposed it as the reading machine for the blind, which was closest to my heart. At a big board meeting, I fed a sheet of paper into the machine and pushed the scan button. The motors whirred and our "special sauce", the core technology, figured out the letters and words on the page and created a word processor file of the text. After a minute or so, a disturbingly mechanical voice intoned from deep within the circuitry of the PC, "Theese arrre the times-uh that try mens soulzz…"
The words were right on the screen, but the voice synthesizer wasn't going to win any acting awards.
The board members smiled. Not bad for a machine. Then the largest investor literally shot the first question at me, "Jim, as the VP of Marketing, how big is the market for reading machines for the blind?" I was prepared and quickly answered, "We think Xerox is selling about one million dollars annually".
Dead silence filled the room.
Finally, another investor asked, "What's the connection to the twenty-five million dollars we have invested in this firm?"
I made my case, and then they made theirs: we had to put the reading machine on hold.
I was profoundly discouraged, but, looking back, I should kiss those investors. They had crystallized for me all the issues that I've been thinking about ever since. They were sophisticated investors who appreciated the value of a reading machine for the blind but didn't think that the high-risk/high-return world of high-tech companies and venture capital investing was the right home for such a project. I had bought into the Silicon Valley mystique, 'hook, line and sinker'. Starting a company and achieving financial success were the dreams all of us in that room (and the dreams of millions beyond that room). But here was a dream that didn't fit in with that plan.
That's when I had the vision of starting a movement to see that good technology doesn't get put on the shelf by the forces of "business as usual".
With the blessing of Calera Recognition Systems (and the rights to use their OCR technology), I set out to form a deliberately nonprofit technology company to build reading machines for the blind, and that was how Arkenstone was born.
We turned a standard IBM personal computer into a reading system by adding a Hewlett Packard page scanner and one of Calera's new TrueScan optical character recognition plug-in cards. Many blind people already had PCs with a voice synthesizer, and with our add-ins you still could do all the things you could do with a PC, like using the word processor or going on-line.
As we went around to the small conferences and meetings in the disability field, we got an enthusiastic reception. With a price tag of just under $5,000 for the new Arkenstone Reader (compared to over $10,000 for the Xerox product), the excitement was contagious. We quickly sold our initial set of units and had demand for many more! It was clear that there was both a market and demand for our product. My dream was on its way to becoming a reality.
Within three years, Arkenstone hit $5 million in annual revenues as the price of the product dropped from $5,000 to $4,000, to $3,000 and eventually down to $1,200, and the numbers of people annually getting reading machines went from a couple of hundred to five thousand. It is the only high-tech venture I've been associated with, for-profit or nonprofit, that has ever exceeded its original business plan.
We received immense credit for expanding the number of people getting reading machines, but I felt that we were simply piggybacking on the computer industry's relentless progress. I had dreams of doing much more with social applications of technology, but we didn't have enough money to develop major new projects.
The folks who founded Freedom Scientific provided us with an opportunity that would solve that problem. In late 1999, they offered to buy Arkenstone (and its brand name) from our nonprofit, allowing me and the engineers to stay inside the nonprofit organization and do new things with the money from the purchase. In early 2000, I sold Arkenstone, we changed our name to Benetech, and got ready to do new things.
Jim Fruchterman's story will continue with Part 2: Benetech and Bookshare in the February issue of the DAISY Planet.