Tag Archives: Boulder (Colorado)

About 4583 days ago Printers, Copiers, and Peripherals

Local Color

Shop Talk: CEOs search for the right technology Digital color copiers enable you to produce everything from coupons and posters to brochures in-house For fans of the Utah Grizzlies, most of the action takes place on the ice. For the managers of the minor-league hockey team, however, it’s the scores outside the rink that really get the blood pumping. Those scores could make a quantum leap during the next 15 years because the Grizzlies’ arena, the E Center, in West Valley City, Utah, has been selected as the site of the 2002 Winter Olympics men’s ice-hockey event. How the $10-million company chooses to exploit that coup — through sponsorships and especially through selling the naming rights for the arena — could boost revenues by as much as 7%. Faced with the arena’s impending celebrity status, Grizzlies president Tim Mouser knew one thing for certain: the company’s marketing materials — including coupons that are distributed at games, statistics sheets for autograph signings, and presentations for sponsors — needed to be produced both more efficiently and more economically. It was time to move from outsourcing color jobs to producing them in-house with a digital color copier. Although color copiers that use top-quality laser imaging start at about $14,000 (compared with the less sophisticated ink-jet copiers that cost less than $1,000), more and more small businesses are buying the digital copiers in lieu of relying on outside print shops to do their color work. The machines can produce everything from small coupons and letter-size flyers to full-color double-sided brochures and full-bleed 11-by-17-inch posters. And when the copiers are loaded with any number of optional features, they can double as either a printer or a scanner. For example, with the addition of a print controller — which turns a color copier into a color printer — the machine can produce everything from color proofs of an original design to endless copies of the final product. Once you’ve launched a program like Adobe Photoshop on your PC, the print controller also lets you use the copier as a scanner. Add a color editor into the mix, and you gain desktop control of tones while the image is sitting on the platen glass. For many businesses, those applications make a color copier worth its hefty price. The six-year-old Grizzlies team got its first splash of in-house color with a Xerox DocuColor 5750, a $19,995 machine that an office-equipment dealer had dropped off in September 1999 for a two-month free test-drive. Up to that point, the company’s three-person graphics department had been driving 90 miles round-trip to the print house it preferred just to get color proofs — a hefty order even when a job didn’t require same-day turnaround for last-minute tweaking. “There was never enough time,” says Mouser, one of several Grizzlies executives who collectively take on at least 20 presentations a week. The marketing materials for the naming-rights sale brought the time and cost discrepancies into clear focus. For each company that’s bidding for the naming rights, the Grizzlies create a 50-page presentation that includes images of the bidding company’s logo on such structures as the arena’s walls, marquees, roof, floor, and dasher boards (the boards that the hockey players crash into), on street signs surrounding the arena, and in the ice. Each packet produced in-house, Mouser calculates, would cost the Grizzlies about $7; each one outsourced, he says, costs roughly $450. “The whole organization ultimately realized that a color copier is not necessarily a luxury — it’s a tool of profitability,” he says. Though Mouser was happy with the efficiency of the Xerox DocuColor 5750, he wanted to see how a couple of other models — a Minolta CF910 and a Sharp AR-C150 — measured up. After all, spending $30,000 to $40,000 on a single item for a 30-employee organization is not something a company president does lightly. Having already established contact with Xerox, Mouser undertook a decidedly unscientific search for dealers that handled Minolta and Sharp products. He found a Minolta dealer through a primitive medium by today’s standards: the phone book. And a Sharp dealer essentially fell into the company’s lap. “I drive by their place every day on the way to work,” says Devin Allen, director of marketing and sales. The features of the Minolta CF910 (list price, $20,495) impressed the team during a one-month in-house test-drive of the machine. With its ability to print on 12-by-18-inch paper to produce an 11-by-17-inch, full-bleed image with crop marks — dimensions that the Grizzlies needed to customize posters for its game sponsors — the Minolta clearly had the technology that the company required. But it fell a bit short in the resolution department: to achieve the quality Mouser was looking for, a copier needed to have a resolution of 600 dots per inch (dpi); the Minolta came in at just 400 dpi. Moreover, though the Minolta did have a module — called a Fiery Z4 print controller — that allowed users to turn the copier into a network printer, it cost $19,950. The option was important, because with the increase in volume of graphics-heavy, customized presentations, the Grizzlies would need the machine as a printer as much as a copier. The team could use it to design a layout, refine the color choices, and print out a final version, all with the click of a mouse. Handling the work in-house would cost the Grizzlies 12¢ to 24¢ a page, compared with $14 to $20 a page for the color press check alone. Next Mouser revisited the Xerox DocuColor 5750, which was still on loan. The Xerox was a strong contender from the beginning since the Grizzlies already had a taste of what the machine could do. That machine, too, could handle the full-bleed, 11-by-17 image that the Grizzlies needed for its sponsors’ designs. But the Xerox missed the mark with its 400-dpi resolution; like the Minolta, that was about 200 dpi short of the Grizzlies’ goal. And even with the Fiery X2 print controller (list price $10,495), the machine was a little below par for the color quality the Grizzlies wanted. Mouser moved on to the Sharp AR-C150 (list price, $22,995), which he viewed at the dealer’s site for several hours at a time over a two-week period. Like the others, the copier could produce 11-by-17, full-bleed printouts, also by printing on 12-by-18 paper. And it had a print controller, called a Fiery AR-PE1, whose price of $14,995 was well below that of the Minolta. But particularly pleasing to Mouser was the Sharp’s 600-dpi resolution and its speed of 25 copies a minute for black-and-white, letter-size sheets and 15 copies a minute for color — well ahead of the competition. “The whole organization ultimately realized that a color copier is not necessarily a luxury — it’s a tool of profitability,” says Tim Mouser, president of hockey team Utah Grizzlies. After two months of searching, the time finally came to review the choices. Here’s how the cards fell: After Mouser tacked all the options he wanted onto the standard $20,495 price tag, the Minolta exceeded the Grizzlies’ budget by about $10,000, knocking it out in round one of the purchasing process. And while Mouser and company considered the Xerox to be an excellent machine despite its lower resolution, the salesperson they had been working with left the supplier midway through the comparison stage. Though his departure wasn’t a determining factor, it definitely didn’t help boost Xerox’s position in the race. The Sharp AR-C150 had triumphed. Mouser purchased the Sharp color copier outright in February for about $40,000, passing on the option to lease for 36 months at $782 a month or for 60 months at $552 a month. To the standard copier, he added a reversing automatic document feeder (which allows both sides of a two-sided document to be copied automatically) for $1,400 and a duplex module (which enables the machine to automatically copy both sides on the same sheet) for $1,100. And, of course, he opted for the Fiery AR-PE1 print controller. For the service plan, Mouser opted for a guaranteed maintenance service agreement, which meant that the company would pay 12¢ per color print and 4¢ per black-and-white print monthly. A counter on the copier determines the invoice. In return, when the copier needs to be serviced, Mouser doesn’t have to pay any additional charges. Mouser figures that the copier will save the Grizzlies a whopping $15,000 a year. And if the customized designs and quick turnaround help it attract sales, the copier will have paid for itself after signing on just three or four new sponsors. “As they say, a picture is worth a thousand words,” adds Allen. “I can describe something all day long, but if a company can see players standing in front of its logo, the value of the product that we’re trying to sell is really enforced.” Quick Fix Last year Sherri Leopard was debuting a new service for one of her biggest clients, a division of IBM, when she realized that her color printer would have to go. The Tektonix Phaser 340 that she’d relied on for 4 of the 16 years that her marketing-consulting firm, Leopard Communications Inc., had been in business just wasn’t fast or sophisticated enough to produce the “brand toolkit” that her consulting team had developed for the E-business folks at Big Blue. And the project — 30 copies of a 132-page document stuffed with color-logo comparisons and positioning statements — would have cost a small fortune to send to a print house. Convinced that the future growth of her $12-million company, based in Boulder, Colo., depended in part on her ability to offer brand toolkits to customers, she asked the company’s director of operations, Wayde Austad, to search for a solution. Austad’s wish list was short: The new machine would have the capability to digitally transform brand -toolkit files from designers’ computers, and it would be able to print more than the six pages a minute that the old color printer cranked out. And though the company would continue to outsource the printing of its customers’ marketing materials, stationery, and business cards, Austad needed a machine that could produce sharp color proofs, complete with vivid ink tones, for customers to review. In the past, customers didn’t see the final version of Leopard’s work until proofs came back from the printer, and by then even tiny changes cost some $400 a page — an expense that Leopard either absorbed or split with the customer, depending on the nature of the revision. Austad’s first move was to call friends in the service-printing industry and a few of the outside color print houses that Leopard used. Each recommended a different brand, with a different supporting argument: Kodak offered top-notch color quality, Ricoh assured reliability, Xerox provided solid service. Someone fired off the Canon name as well. Austad had wanted to bring the color printers in-house to try them out, but he quickly learned that with his company’s relatively small output — about 3,000 color printouts a month — vendors were reluctant to loan out the expensive machines. So he downloaded a bunch of images onto disks and drove 25 or so miles to the dealers’ Denver showrooms. Austad’s first stop was Xerox. When he explained what he was after, the sales rep showed him the DocuColor 12, a higher-end version of the DocuColor 5750 used by the Grizzlies, as noted earlier. The DocuColor 12 (list price, $31,495) spit out 12 color pages a minute — twice the speed of the old Tektonix printer. “That’s a big difference when you’re trying to make 350 printouts in time for FedEx and you have 10 designers sending print jobs at the same time,” says Austad. The Xerox satisfied on color quality as well. Its resolution of 600 dpi was twice that of the old machine. Moreover, the DocuColor 12 had trays for standard letter, legal, and 11-by-17-inch sheets of paper, and 12-by-18-inch sheets could be fed through manually. In addition, the DocuColor’s feeder was specially designed to grip glossy or extra-thick paper. Taken together, the features made printouts that closely resembled an offset printer’s final output — just what Austad was looking for. Austad was also impressed with the service he had received from Xerox. “The rep was very attentive and very patient,” Austad recalls. “I would point something out, and he would explain it honestly.” He was particularly grateful for the rep’s explanation of the difference between the two print controllers — the Splash G620DFE (list price, $26,000) and the Fiery EFI XP12DFE (list price, $19,500) — that the machine could use. Austad had used Fiery at a previous job, but the Splash, it turned out, was better suited to producing the brand toolkit because instead of transforming a digital file repeatedly — a time-consuming process — it transforms a file once, saves it, and prints multiple copies. So far, so good. Still, Austad thought, it would be too easy to buy the first machine he tried. To lay his doubts to rest, he set off to check out the competition, using the Xerox as a benchmark. Austad knew he was on the right track with the DocuColor: the next step up was printers that whipped out 40 pages a minute, at almost triple the price. “There’s no cost justification in that for me,” Austad says. So when he went to the Ricoh showroom, he asked to see a model in the same class as the DocuColor. The sales rep introduced him to the Aficio Color 6010. With a resolution of 600 dpi, a copying speed of 10.5 color pages per minute, the ability to handle thick paper stock, and a price tag of $28,950, plus an additional $18,995 for the Fiery print controller (here called an E-800) that went with it, the Ricoh was a close cousin to the Xerox. But one factor put the Ricoh out of the running altogether: the Aficio Color 6010 couldn’t handle the 12-by-18-inch originals. “We really need that size for double-page magazine spreads,” says Austad. “The clients need to know how their ads will look.” Next up was Canon’s Color Laser Copier 1150 (list price, $33,500). This machine offered 400 dpi with automatic image refinement (AIR) technology, which increases image resolution to the visual equivalence of 800 dpi, but its copying speed, at 11 color pages a minute, fell short of the Xerox model’s. The print controller available that met Austad’s needs was a Fiery: the ColorPASS Z60, which cost $19,500. But as Austad fed the machine pieces of a heavy-stock paper, the 1150 repeatedly jammed. When he asked the Canon salesman about the problem, the salesman blamed it on the fact that the sales-floor demo got so much use. Austad saw a red flag. “I figure your demo ought to run a lot smoother than your live product,” he says. The salesman then waved away Austad’s concern about the paper jams, claiming, “They all have the same mechanism.” (Not true: the Xerox’s gripper feeder, for example, is designed for heavier paper.) Austad says that the salesman’s surliness really turned him off. That, and the Canon machine’s apparent inability to handle thick or glossy paper, left Xerox alone at the top of Austad’s list. It was at the Kodak dealer that Austad found something really different: the ColorEdge 1550 Plus. It uses what’s known as dye sublimation technology. Instead of laying flakes of toner on top of a piece of paper like the other models that Austad saw, the ColorEdge actually dyes the paper. Though the resolution was lower than what Austad wanted — 400 dpi instead of 600 dpi — the dyed color images looked more like photographs. Austad considered the ColorEdge because the sharp images — which come at a price of about $8 apiece — would give clients the best possible idea of their final product, and any necessary changes could be made in-house before the digital file was sent to the printer, thereby cutting back on the expensive changes to printer’s proofs. But the ColorEdge wouldn’t do anything for the company’s mission-critical brand toolkit or other high-volume, high-speed projects. Satisfied that he’d explored the options, Austad concluded that the Xerox was the machine for Leopard. Sherri Leopard’s investment will pay off because her employees are working faster and her clients are more comfortable with her designs. One final incentive for going with the Xerox was the cost of “consumables” like toner and cleaner. Austad calculated the cost of consumables for each of the models he’d looked at based on an 11-by-17-inch page with 80% coverage. Consumables for the Xerox machine, he found, would cost him several cents a page less than one competitor’s and half as much as another’s. (Austad demurs when asked to name names.) In December, two months after CEO Sherri Leopard had sent him shopping, Austad signed on with Xerox. The company happened to be the manufacturer of the black-and-white copier that had served Leopard for years. Austad told the Xerox rep about his comparison shopping, and the rep made a deal: Xerox would wipe out the remaining three years on Leopard’s five-year lease on the black-and-white copier and set up a new five-year lease for the color machine. Payments would be set at $1,700 a month, which was only $250 more than the old lease and a very competitive price, says Austad. And Austad negotiated a service agreement whereby the company would pay 12¢ per color copy — about half the usual Xerox price — and receive free maintenance for the machine. (Since then, Xerox has lowered its color click charge to 10¢ a sheet.) For the first few months after the Xerox machine arrived, Austad tracked how much time workers spent on projects. Because the new machine prints and copies projects like the brand toolkits much faster, he says, employees spend less time waiting around. He estimates the company now saves a few grand a month on employee productivity alone. Thanks to the Xerox, the company reduced its outsourcing by 77.6% for the first six months of the year, a figure that amazes Austad. He adds that the color-proof changes — the ones that used to cost $400 a page — are way down, too. The business’s investment in the new machine will pay off, Leopard says, because her employees are working faster and her clients are more comfortable with the designs they’re paying for. “This machine helps us be a better partner, which helps us grow along with our clients,” she says. Mie-Yun Lee is editorial director of BuyerZone.com (www.buyerzone.com), an Internet buying service that features expert purchasing advice and tools for small and midsize businesses. You can use its tools to explore color copiers for your company at www.buyerzone.com/office_equipment/copiers-color/index.html. Jill Hecht Maxwell is a reporter at Inc. Technology. Doreen Vianzon contributed to this story. Please e-mail your comments to editors@inc.com.

About 4644 days ago E-Commerce

On the Wired Front

Cover Story Blue-collar communities are designing their own high-tech networks to attract business Tacoma, Wash. Stand on a street corner and you can feel it. Not the unstoppable rush that hits you when you emerge from a New York City subway station. Not the charged air hovering about MIT in Cambridge, Mass., or the relentless new-day vibe of a Silicon Valley morning. But there’s something brewing in Tacoma, this city on the south shore of Puget Sound. Young men and women on their lunch breaks dot the sidewalks. Men in hard hats pop in and out of boarded-up, abandoned warehouses and mills that they’re renovating into San Francisco-style loft offices. Cranes swing around the waterfront, where new buildings are going up. “I can’t say I’ve ever seen that before in 20 years,” says Rob Grenley, an area native who cofounded two companies in downtown Tacoma: Grenley Stewart Resources Inc. and ID Micro Inc. How is it that after decades of stagnation the city of Tacoma is sputtering back to life? For starters, it’s only about 30 miles south of Seattle, where the high-tech growth spurt has gobbled up almost all the available space and ratcheted up real estate prices to twice what they are in Tacoma. And there’s another ace up the smaller city’s plaid-flannel sleeve: a state-of-the- art, high-speed fiber-optic network that covers the city. Tacoma — rich with small-city business perks like a sane commute, ample parking, and a start-up-friendly permitting process — is now technologically equipped to play ball with the big kids. Two or three years ago, says commercial real estate broker Eric Cederstrand of Colliers International, corporate clients refused to even drive past Tacoma and look out the car window. Seattle was the city they wanted on their business cards. Now, he says, the Tacoma warehouses he’s renovating are filling up faster than he can sandblast the timbers and hang the reproduction windows. “It’s like Tacoma was put in a time capsule,” he says. “All of a sudden we’ve broken open the time capsule, and we are literally creating a brand-new city.” The new network in Tacoma represents another chance at economic viability — perhaps even boomtown success. As is true with many small cities, all this might not have happened if Tacomans had waited for the local cable or phone company to install the high-speed networks that businesses now demand. Frustrated with the inattention of big cable and phone companies, publicly owned utilities in tiny towns and small cities in states all over the country have taken matters into their own hands. They’ve dug up streets, laid fiber-optic cable, and connected residents and businesses to new high-speed lines. Service providers are rushing in to sell Internet access through the new infrastructure. (In some cities, the utilities are even selling the services themselves.) The introduction of choices has made life easier for the businesses already in place and made the cities more attractive to start-ups. For Tacoma, the new network is much more than a tangle of glass threads. It represents another chance at economic viability — perhaps even boomtown success. City of Destiny Nearly surrounded by water, with preposterously huge Mount Rainier looming in and out of the clouds to the southeast, Tacoma tends to hang back behind its sexier sister, Seattle, just up Interstate 5. In 1873 the Northern Pacific railroad chose Tacoma over Seattle for its western terminus, and ecstatic Tacomans tagged their town the “City of Destiny.” For many years paper mills choked the air with an acrid stench that came to be known as “Tacoma’s aroma.” In the 1960s a shopping mall was built in Tacoma. Almost immediately, the downtown retail district started to collapse. Buildings stood abandoned for decades. Crime rose; street gangs moved in. To business owners in those days Tacoma’s nickname must have sounded ironic. “We were the corner business on both corners,” says Steph Farber, whose family’s LeRoy custom-jewelry shop has occupied a storefront in the middle of a downtown block since 1942. For years buildings on both sides were blighted all the way to the end of the block. By the 1980s, Tacoma was standing still as Seattle flourished. Thousands of people from the Tacoma area clogged I-5 every morning on their way to jobs in Seattle and surrounding King County. When Rob Grenley left for college, Tacoma had “a postapocalyptic look,” he recalls. “You didn’t want to do business there unless you had to.” Grenley worked first on Wall Street and then in Seattle, but returned to Tacoma in 1990 to start a truck-fueling business with Greg Stewart, a childhood friend. Things were just beginning to turn around then. City officials were working hard to clean the place up. They threw all their resources at improving public safety. They ripped down offending buildings and put grassy parks in their place. And they clung tightly to Tacoma’s marquee business, the Frank Russell Co., a multimillion-dollar international investment-services firm that is headquartered on Tacoma’s waterfront. But in the early 1990s the city’s communications infrastructure was still stuck in a technological tar pit. “You’d get on the phone and it would be, ‘All circuits are busy,’ ” recalls Steve Klein, superintendent of Tacoma Power, the municipally owned electric utility. The cable service was equally poor. “They had a monopoly, with no incentive to improve the infrastructure,” Klein says. The Energy Policy Act of 1992 had deregulated the wholesale side of the power business. To stay competitive, Tacoma Power was planning a fancy digital network that would allow it to operate switches, read meters, and manage power loads from remote locations. Klein calls this type of service electricom, from electricity and telecom. “Microprocessors are in everything,” he says. “They need electricity to power them, and they need telecom to interact.” The SRI International consultants Klein hired to review the plan told him that while he was at it, it made sense to install a bit more fiber than was called for, to wire the city for high-speed Internet access and other applications. The city surely needed it; its franchise office had been negotiating with cable provider TCI Inc. for service upgrades, but TCI representatives were stonewalling. Klein approached TCI and phone company US West about teaming up to share the cost of the new network. “They told us to get lost,” he says. In 1997 the city council approved Tacoma Power’s plan to spend $100 million on a fiber-optic network. (The money came from the utility’s wholesale revenues; residential and business customers saw no rate increase. Tacoma Power customers have the second-lowest rates per kilowatt hour in the state, according to the company’s government and community-relations manager, Diane Lachel.) Construction of the network began in January 1998, and by July the power company had its first cable customer. Today the Click Network, as it is called, covers 180 square miles. Tacomans now have choices, which forces better customer service. The city’s marketing people claim that 100 start-up companies have located in Tacoma since Click went live; some have relocated from Seattle. Those businesses (and city residents) can choose from five different Internet service providers that the network supports. But the real surprise came along in the same month that Tacoma Power broke ground on Click. TCI suddenly announced a decision to invest $30 million to upgrade its own infrastructure. “When they finally woke up to the fact that we were a reality, they tried to stomp us,” Klein says. But, he adds, Tacoma residents and businesses now have choices, which forces better customer service. Tacomans also have seen hundreds more jobs, more venture capital, and better workforce training in their hometown. Dublin transplant Bill Towey runs a high-tech incubator through his private-investment firm Tacoma Venture Partners LLC. “A lot of these workers were already here,” he says. “They just don’t drive north to Seattle or Redmond anymore.” Towey plans to raise $15 million for his incubator. He and various local companies are involved in a technology boot camp for Tacoma high school teachers. Giddy with the first signs of success, and eager to tout its prospects, Tacoma has retained the New York City marketing firm Development Counsellors International for $127,000. Tacoma’s economic-development director, Juli Wilkerson, is touring the country, promoting “America’s #1 Wired City” to site-selection companies. City employees now have E-mail addresses that end in wiredcityusa.com. And broker Eric Cederstrand is hot on the idea of changing the names of Broadway and Commerce Street to Broadway.com and E-Commerce Street. “There’s a positive-multiplier effect,” Rob Grenley observes. “More people come, which means businesses will grow and flourish, as opposed to people not wanting to come here on a bet. It’s nice to be heading toward that in your hometown.” Naturally, AT&T, which bought TCI in March 1999, says the company had planned to modernize its services all along. “Regardless of whether Click Network was in place or not, TCI would have upgraded Tacoma because plans had always been in place to upgrade at that time,” says Steve Kipp, executive director of communications for AT&T Broadband’s Northwest division in Seattle. Yet the Tacoma experience with TCI was echoed in Cedar Falls, Iowa, and Boulder, Colo. In fact, some 65 municipalities have made end runs around their cable or phone monopolies to offer telecom services, says Martin Gidron, managing editor of UT Digest, a newsletter in Silver Spring, Md., that has chronicled the phenomenon. The trend will continue, Gidron says, since “the demand for telecom services seems to be insatiable.” Heart of the Commonwealth Some 3,000 miles east of Tacoma, nestled among seven green hills far less dramatic than Mount Rainier, lies the city of Worcester, Mass. Worcester — birthplace of Abbie Hoffman, the diner restaurant, the smiley face, and the Pill — has long been known as the Heart of the Commonwealth. The name fits: the city’s central location and highway and rail infrastructure make it a natural for commerce. Worcester has also been known as New England’s utility closet, because it was a manufacturing center for many years. Most of Worcester’s industrial powerhouses have moved on to cheaper pastures, leaving the city with an assortment of old, abandoned buildings, including a cold-storage warehouse that burned catastrophically last December, killing six firefighters. In the 1960s, Worcester replaced a massive piece of its core with a suburban-style mall. The shopping center never really caught on, but like the one in Tacoma, it sparked the collapse of the city’s formerly thriving downtown retail base. In the past few years Worcester officials have staked the downtown’s future on another huge, single-use project — a mammoth medical facility — and have restored the 90-year-old Union Station, a beaux arts train depot that had been left to rot for decades. (Tacoma also recently restored its own Union Station, which is being used as a courthouse.) Worcester residents have always suffered from a bit of an inferiority complex, partly because their town, like Tacoma, is within the shadow of a larger, more vibrant city (in this case, Boston). Even the restoration of Union Station, the pride of the city, came only after years of contentious intracity squabbling and institutional paralysis. Now, nearly a year after the project was completed, its beckoning retail space is almost entirely unoccupied. Like Tacomans, Worcester, Mass., residents have always suffered from a bit of an inferiority complex, partly due to their proximity to a larger, more vibrant city. Another part of the problem may be Worcester’s form of government. The chief executive is not the mayor but rather the city manager, who is appointed by the city council instead of being elected by residents. Worcester has had only three city managers since 1953 (when business leaders succeeded in instituting this “professionalized” municipal structure), and none of them has been directly accountable to voters in the way elected officials are. That can make it difficult to create real change. “Worcester has gotten a little bit behind the curve,” says Arthur Couture, an entrepreneur who eyed neighboring towns before choosing Worcester and its easy commute for his software and computer-services company, ICAL Systems. Now, Couture says, Worcester officials are being pressured to leapfrog ahead. A new fiber-optic network has been installed in the city, and local businesspeople are relying on it to lure new companies to their hometown. A marketing brochure only slightly less effusive in tone than Tacoma’s PR avalanche labels Worcester “America’s #1 Cyber City.” Worcester’s network differs from Tacoma’s in one fundamental way: a private-sector builder of fiber-optic networks called NEESCom, which was established as the telecom subsidiary of the electric utility formerly known as New England Electric System, installed it at no expense to the city. Gidron of UT Digest says that more than 150 private electric utilities have similarly entered the telecom market. Tom Wharton, a former bankruptcy-turnaround consultant, is the man who turned NEESCom’s head. In 1998, Wharton bought a bankrupt Internet service provider. Bell Atlantic was going to charge him $6,000 a month for connectivity in Worcester. So he drove 45 minutes to Providence, R.I., where he could colocate his servers with another provider for $250 a month. On the drive back to Worcester, he mused that it was unfortunate he couldn’t locate his business in the city where he lived. Why, he wondered, was Worcester’s technology infrastructure so far behind that of other New England cities? Wharton wrote a letter to the editor of the city’s daily newspaper. “The next thing I knew,” Wharton says, “I was heading a task force.” He began working with the Worcester Area Chamber of Commerce to bring the city’s technology infrastructure up to speed. Hearing about Wharton’s efforts, NEESCom figured that Worcester would make a great hub for its new regional fiber-optic network and offered to wire the city at its own expense. About half a dozen competitive telecom companies have since moved in and started selling services on the new network, and Wharton estimates that the influx of providers has drawn at least 10 start-ups to Worcester. That includes a new venture for native entrepreneur Steven Rothschild, who, after having run a family furniture business for 16 years, had started Furniture.com in Worcester. In 1997, Rothschild’s high-speed T1 line was costing him $1,800 a month. He was having trouble finding tech-savvy executives who were willing to work in Worcester, and venture capitalists weren’t breaking down the door to fund a company in the former mill town. All of that, combined with the tough time he was having in getting tax credits, prompted him to move the company to Framingham, halfway between Worcester and Boston. But earlier this year Rothschild launched an online lightbulb store, called Bulbs.com, in Worcester. High-speed Internet service costs him $168 a month — less than a tenth of what he was paying three years ago. He’s also having an easier time recruiting managers. And there’s even a new $15-million fund for early-stage Worcester businesses. “The technology infrastructure is taking out some of the roadblocks to staying in the city,” Rothschild says. Wharton’s task force — the Worcester InfoTech Project — has taken on the mantle of marketer for the city’s new high-tech offerings. But the NEESCom network hasn’t been a panacea. “This isn’t Field of Dreams — ‘If you build it, they will come,” says Couture, who hasn’t even been able to connect his business to the network yet. Another prominent local company, Tatnuck Bookseller, is situated just a few hundred feet away from one of the city’s three network rings, which cover the downtown business district, a biomedical park, and Worcester Polytechnic Institute. “We are betting our company’s future on giving our customers access to us and having access to them,” says Tatnuck owner Larry Abramoff. “Not being wired is hurting my business right now.” (Until the network reaches him, he’s making do with leased T1 lines and a wireless service.) Still, Worcester’s model — in which a private company, rather than a public utility, installs the network — may prevail in future business-community resurrections. Tacoma’s model has goosed some big privately owned phone companies. In Washington state, GTE Northwest sued the Douglas County Public Utility District to stop it from expanding its fiber-optic network (the suit was later withdrawn following changes in state law), and the Washington Independent Telephone Association took Pacific County Public Utility District to court to stop it from providing Internet service to customers. So far, Texas, Missouri, and Virginia have passed laws limiting publicly owned electric utilities from offering telecommunications services. AT&T’s Kipp views the public companies’ inroads in this area as a conflict of interest. “We’re beholden to our shareholders,” he says. “Then we have to go in and compete with the government, who’s also the regulator. That could have a chilling effect on competition.” Steve Klein of Tacoma Power doesn’t really care if Click loses residential customers to the new AT&T offerings; he built the network for the power company’s own purposes, and the Internet-access stuff is just gravy. The mayor’s office doesn’t mind if some Tacoma residents think “Wired City” sounds as if a bunch of caffeine addicts have staged a coup. Some of the new start-ups may not even survive. But 100% success is not the point. The point is to get things going. The more that entrepreneurs hear about Tacoma, the more seriously they will consider starting or relocating a business there. For the first time the people of Tacoma — and Worcester and other old-economy communities like them — are leveraging their technological assets to promote entrepreneurial businesses. They’re grabbing the reins and kissing destiny good-bye. Jill Hecht Maxwell is a reporter at Inc. Technology . Question Authority Small cities want their zip codes on your letterhead, and they’ll try their darnedest to convince you that their technology is state-of-the-art. Don’t believe the hype. Here are some key questions you should ask regarding tech infrastructure before you relocate: Can I connect to a fiber-optic network in your city? How much will it cost to plug in? How long will it take? Who’s competing to provide me with service? What are the rates? Is the network connected to major cities nearby? How many other companies are there? Do they use the network? Can residents connect to the high-speed network and telecommute? Are wireless services available? Up to Date in Kapolei Remember when every burg across the nation was billing itself as the next Silicon Whatever? Well, now several cities and at least one state want to be known for their wired wonders. Here’s a sampling of the claims: The Wired City Kapolei, Hawaii America’s Most Wired City Louisville, Ky. The Most Wired City in America Stillwater, Okla. America’s #1 Wired City Tacoma, Wash. America’s #1 Cyber City Worcester, Mass. The Internet Capital The state of Virginia Please e-mail your comments to editors@inc.com.

About 4828 days ago E-Commerce

A New Chapter for E-Books

Inc.ubator Entrepreneurs are rediscovering the digital book. This time their start-ups might fly Ahem. A reading from Stephen King’s The Girl Who Loved Tom Gordon: “The water was not quite up to her knees. The stuff her feet were sinking into felt like cold, lumpy jelly. …” Contemplate the absurdity of reading a chunky Stephen King novel — or anything longer than a stock quote, really — on a tiny handheld-computer screen. Reading a book is a visceral experience impossible to duplicate in liquid crystal display. In the early 1990s, companies like Voyager and Vertigo Development Group sold books on disk, but their products failed to catch on. Many readers’ computers didn’t have the CD-ROM drives necessary to “play” books on their screens. Besides, “you don’t curl up with your computer,” says Patrick Breen, former senior architect at Vertigo. And publishers were still typesetting manuscripts, making it a huge hassle to digitize a book. But now it looks as if E-books, despite the absurdity factor, might take off. The Internet’s distribution power, together with higher-resolution screens and powerful processors, have made the world a much friendlier place for electronic books than it was just five years ago. And publishers now create books on computers, so the files are already in digital form — “a complete revolution, and it happened between 1993 and 1996,” says Paul Hilts, technology editor for Publishers Weekly. Last fall, several E-book companies joined forces with Microsoft and, with the blessings of publishers like Simon & Schuster and Bertelsmann, defined a technical standard for publishers’ electronic files so that books can be read from desktop computers, dedicated reading devices (portable gizmos used solely for reading books), and handheld computers. That flexibility should help develop consumer confidence and thus a market, says Kevin Hause, a consumer-products analyst for IDC, in Mountain View, Calif. Hause projects that by 2004, electronic books and periodicals will be a $2.5-billion market — hardly pennies, but still just a fraction of today’s $25-billion market for good old-fashioned books. Pricing for reading devices has been a hurdle, but the costs are starting to drop. Last November the price of the Rocket eBook, a reading device from NuvoMedia, also in Mountain View, dropped to $199 from $499 a year earlier. Another company, SoftBook Press, in Menlo Park, Calif., has also brought reading devices to market. (In January, Gemstar International Group Ltd., in Pasadena, Calif., acquired NuvoMedia and SoftBook. Gemstar markets the VCR-programming system VCR Plus+. The E-book companies will remain separate entities.) Another E-book contender, Librius.com, in Bellevue, Wash., abandoned plans for its reading device last summer to focus on software after president Don Ledford realized that handhelds were going to swamp his Millennium Reader. “Everyone who’s in this business is in it for the content,” Ledford says. “Why struggle upstream to try and sell 20,000 units at cost so you can try and sell some books, when 10 to 20 million new handhelds are flowing in?” That’s where Peanutpress.com comes in. The Maynard, Mass., start-up offers free software, called Peanut Reader, for reading books on Palm OS or Windows CE handheld devices. Peanut Readers let readers flip through, dog-ear, and write all over books. To soothe publishers worried about readers “sharing” books without paying for them, E-book producers are developing encryptions and passwords that safeguard content. Such measures have convinced major publishers — like Random House and Simon & Schuster, which signed deals with Peanut — to join the smaller publishers that jumped in earlier. Peanut president Jeff Strobel, who cofounded the company in April 1998, says that by the end of last year, some 10,000 people had bought the company’s books, which cost the same as or less than a paperback. Strobel says revenues, currently in the six figures, increased sevenfold during 1999. Lending further legitimacy to the E-book market, Microsoft plans to release new reading software this year. Still, it remains to be seen whether readers will become as fond of E-books as they are of, say, that battered, beloved paperback copy of The Catcher in the Rye. After all, it’s probably not wise to read your E-book in the bathtub. Search: “Red + Bumps” Got a weird rash? MotherNature.com has created what it believes is a compelling reason to eschew the mall pharmacy for E-commerce: online you don’t have to query a stranger behind a counter about rash remedies. Instead, Web surfers can find answers for themselves in online books from $500-million health-and-fitness publisher Rodale Inc. — all without leaving MotherNature.com. Jeffrey Steinberg, the online vitamin vendor’s chief marketing officer, believes that good content, such as that offered by health books from the Emmaus, Pa., publisher of Prevention magazine, will increase the site’s “conversion” rate — in other words, more visitors will become spenders. So last summer the Concord, Mass., start-up gave Rodale 8% equity in exchange for the rights to 150 Rodale books for the next 10 years, as well as direct-marketing access to the publisher’s database of 25 million magazine and book buyers. MotherNature.com programmers converted the books to digital form and cross-referenced them with the site’s products. When customers search for rash treatments in one of the books, for example, products containing calendula appear for sale in a frame to the left of the book text. Although he has no conversion data, Steinberg says the content gives MotherNature.com an edge over its competitors, which include VitaminShoppe.com and drugstore.com. Rodale also provides content to Women.com and Petsmart.com. This Way to My Library Imagine your own private library, only instead of having to build bookshelves and buy overstuffed leather chairs, you only need to log on to the Internet. That’s precisely the service Versaware Inc. hopes to provide. At the company’s eBookCity.com Web site, visitors build personal collections that include a free dictionary, thesaurus, and encyclopedia plus many other free titles and competitively priced newer books. The books reside on Versaware servers, so the library doesn’t clutter a user’s hard drive, though downloading is an option at no extra cost. So far, the company — which employs some 400 people in India, Israel, and the United States — has added the E to more than 2,000 books. But these aren’t just any old texts. “There’s a misperception that merely digitizing content is adequate,” says Harry Fox, who cofounded the New York City -based company in 1997. “People are not going to prefer reading on a screen.” So Versaware jazzes up the content with sound, video, and a collection of 350,000 photos. Customers organize their books by category on separate shelves and can perform targeted searches on them. Someone interested in, say, the spawning habits of salmon can search for the fish on the science shelf and leave out the cookbooks. Once a book has been digitized, Fox says, Versaware can make money from it more than once by posting it on other sites. Case in point: Lycos hosts Versaware reference materials, like Funk & Wagnall’s multimedia encyclopedia, on the Lycos Research Center Web page. Lycos and Versaware share advertising revenues from the page. Lycos director of business development Tom Murphy says that surfers using the reference materials stick to the Lycos research pages 50% longer than they did before Lycos posted the Versaware content. Versaware, which in its third round of funding garnered $30 million, faces a significant competitor in NetLibrary Inc. The Boulder, Colo., start-up caters primarily to the higher-education and research market and has received $100 million in venture capital from investors that include Houghton Mifflin and McGraw-Hill. To date, Versaware has multimillion-dollar revenues but no profits. It makes most of its money converting textbooks into CDs for publishing companies, including McGraw-Hill. Jill Hecht Maxwell is a reporter at Inc. Technology. E-BOOK WHO’S WHO AND WHAT THEY DO These companies make dedicated reading devices or sell E-books on the Web Everybook: Plans to market a dedicated reader for professionals; $1,600; www.everybook.net Glassbook: Sells software; has a secure-distribution server for selling books online; free to $39; www.glassbook.com Librius.com: Offers free software; sells E-books at a price comparable to paperbacks; www.books2read.com netLibrary: Provides access to an online library; $30 a year; www.netlibrary.com NuvoMedia: Sells a dedicated reader; $199; www.nuvomedia.com peanutpress.com: Offers free software; sells E-books for handhelds; www.peanutpress.com SoftBook Press: Sells a dedicated reader and E-books; $599; www.softbookpress.com Versaware: Sells E-books; offers online library; free to $50; www.eBookCity.com