Designed for Even Mediocre Secretaries : Typewriter With Screen Displays a Demand
Testing a product on the kind of people who eventually will use it is hardly a new idea. But at Protype, a Sun Valley company that makes an office machine that is a cross between an electronic typewriter and a word processor, testing is done with a twist.
The company tries out its equipment on what Stephen Kurtin, Protype president, diplomatically calls the “most ordinary” secretaries. To find them, Kurtin every so often asks a temporary help agency to send over a group of bad secretaries. The theory is that, if they can figure out how to work Protype’s machine, it will be a breeze for the others.
Protype’s strategy of keeping its product simple and easy to use appears to be working. The 2-year-old company has emerged as a leading manufacturer of display typewriters, which are electronic typewriters with small, attached display screens shaped somewhat like the head of the extraterrestrial movie character “E.T.”
Kurtin predicts that Protype’s sales, only about $6 million last year, will exceed $20 million and could reach $40 million this year. He said he expects annual sales to reach $100 million within three years. The privately held firm is breaking even now and should be profitable this year, Kurtin said.
Protype’s growth has been fueled by $17 million from a group of prominent investors, including San Francisco-based Montgomery Securities, Brentwood Associates in Los Angeles and Banque National de Paris in France.
Success Attracts Competition
But Protype’s success in the display typewriter market has attracted competition from major office-equipment manufacturers. They include Atlanta-based Harris-Lanier, which two months ago introduced a similar product, and Italy’s Olivetti, which last summer brought out its version. The leading competitor, however, is Xerox, the giant Stamford, Conn.-based company. It sells a machine more elaborate and expensive than Protype’s, but which nonetheless competes for the same space on a secretary’s desk.
That desk space accounts for most of the $3 billion-a-year business known as the text preparation market. Until recently, the market was dominated by electric typewriters. They have been replaced widely over the last few years, however, by so-called electronic typewriters--which have electronic memories that store text--and more elaborate word-processing systems that allow users to write and edit on a computer.
Half of Chores Inapplicable
Kurtin and other industry experts believe that secretaries always will need typewriters for simple chores, despite the advances in word processors and personal computers. Some industry studies show that nearly half of a secretary’s job involves such chores as typing letters, forms, vouchers, small reports, labels and index cards--jobs some experts say are too difficult to perform on word processors and personal computers.
“A lot of people thought the typewriter was going to disappear,” said Clifford M. Lindsey, vice president with Dataquest, a San Jose research firm. “But that didn’t happen. It’s our belief that a good portion of the electronic typewriter companies will survive the onslaught of the personal computers, but a lot of them will have to add screens.”
The display typewriter that Protype and its competitors make looks something like a desk-top computer. Like a computer, it has a video display screen and the capacity to store pages of text.
Elaborate Gear Unneeded
The words a secretary types are displayed on the video screen, appearing exactly the way they would look printed out on paper. The typist can move paragraphs and make other changes before printing the final version. Makers of display typewriters say that the machines give users many of the editing advantages of word processors without having to buy elaborate computer equipment.
“People who buy computers just to use as typewriters are really paying for a lot of capacity they really don’t need,” said Randy Courtney, a vice president with Harris-Lanier.
Protype’s display typewriter has a suggested retail price of $2,495. To keep costs down, the company does its manufacturing in Japan, Taiwan, Hong Kong and Singapore. About 55 of Protype’s 100 employees, however, work at the company’s headquarters and distribution center in Sun Valley.
Kurtin didn’t always believe in the typewriter’s future. He founded a company named Lexitron in 1972 that introduced the first video display word processor, and soon afterward he proclaimed the typewriter dead. Now, Kurtin says, he’s convinced typewriters will coexist with sophisticated equipment in the office of the future.
Industry consultants call Kurtin, 41, a visionary in the office-equipment field. A gregarious, restless man, Kurtin received a patent at the age of 14 for a three-dimensional television system. He later studied at the Massachusetts Institute of Technology, where he earned his bachelor’s and master’s degrees in physics in four years.
Doctorate at Caltech
Kurtin then went to Caltech and earned his doctorate in applied physics at age 26. At Caltech, Kurtin started developing the Lexitron word-processing system.
He started Lexitron with $3,000. Situated for most of its life in Chatsworth and later in Newbury Park, the company quickly became a leader in the word-processing business, but was chronically short of cash.
Many customers balked at the $20,000 price tag on Lexitron’s product, so they leased the equipment instead of buying it. That, in turn, put financial strains on the company that forced it to look for a merger partner.
Raytheon, the giant defense contractor, bought Lexitron in 1977 for $14.7 million in what became a highly publicized flop. It later sold Lexitron and the rest of its data systems division in 1984 to Tulsa-based Telex.
Kurtin spent much of the year after the Lexitron sale skiing, but he became restless and started Lane Research, a Sherman Oaks product development firm.
At Lane, Kurtin developed his idea of making a typewriter with an attached screen that could duplicate the way text looks on a typed page, showing bold letters, centered lines and underlined words. It was to be an improvement on many personal computer and word-processing systems that display codes instead, often preventing users from spotting errors until the text is printed.
Protype’s machine, first introduced in August, 1984, was greeted with raves from trade publications. Management Review, in a burst of hyperbole, went so far as to compare Kurtin to Thomas Edison. Lindsey of Dataquest agrees that the product was a “breakthrough” in the office equipment field.
Dealers and office equipment analysts praise the relative simplicity of Protype’s product. They cited the easy installation, and say users need only one to two hours of training.
“There are no special codes to learn. Everything’s in English,” said Gary Weiss, assistant to the president of Advanced Image Systems in Glendale, one of Southern California’s largest office equipment dealers.
A drawback to the Protype machine, however, is that users can’t move as easily from page to page on a long document as they could on a word processor. Sources close to the company said Protype hopes to add that capacity to its machine later this year.
Kurtin brashly dismisses his competition, calling some of their machines “terrible products.”
“We’re talking about people who have compromised,” he said.
Cynthia Karban, product manager for Olivetti, said she doesn’t see much difference between Protype’s product and Olivetti’s “Videotyping” machine. She said Olivetti’s equipment can perform tasks such as spreadsheet analysis that Protype’s can’t. But she also acknowledged that Protype’s machine has some features that Olivetti’s lacks, such as compatibility with IBM computer equipment.
Dataquest’s Lindsey said major companies such as Harris-Lanier, part of the Harris Corp. of Melbourne, Fla., will be formidable competitors for Protype because of their marketing muscle. He suggested that Protype may respond by cutting deals with big firms to market and put their name on Protype machines.
Kurtin said his stiffest competition in the long run is likely to come from IBM, Xerox and Japanese manufacturers. IBM hasn’t entered the field so far, probably, Kurtin said, because it isn’t convinced the market is big enough.
In any case, Kurtin said, Protype is well financed and thus can withstand the competition. Backed by venture capitalists who eventually want to be paid off, Protype eventually will sell stock to the public or be acquired by a larger company, Kurtin said.
For now, Kurtin is content to run the company rather than return to the life of a ski bum he enjoyed after selling Lexitron. Confident that many businesses will want to replace their old electric and electronic typewriters with display typewriters, Kurtin predicts that the market could grow to 250,000 units, or $600 million, annually.