The Incidence of the Overreaching Entrepreneur

DN Staff

February 3, 2010

3 Min Read
The Incidence of the Overreaching Entrepreneur

Why use a $22K solution when a million-dollar supercomputer will do?

By Contributing Writer Radcliffe Cutshaw

In the late 1980s, I was approached to provide technical support to an entrepreneur who wanted to have a chain of distributed help centers in every major and mid-sized city.

The entrepreneur had a business plan where the operators bought the personal computer and installed a second phone line using analog modems. It was intended to have the help operators call a local number and be connected to incoming callers by means of a central controller. The operators would have personal computers dial a central data number connected to the same supercomputer to provide scripts and information.

In order to do this, the entrepreneur thought that a “million dollar supercomputer” was needed and he had a specific model in mind. Today these functions are done via a high speed Internet connection and VoIP (Voice over Internet Protocol) with the operator’s laptop or desktop computer and the central server out performing the “million dollar supercomputer.”

I thought that the supercomputer was overkill for what it was supposed to do and the function could be done better in another way. I approached a friend of mine who had a great deal of experience in telephony and described what my client wanted to do. He stated that the voice operation part could be done for about $22,000 in hardware, consisting of a mid-size, off-the-shelf PBX (Public Branch Exchange, which is a specialized computer) with an IBM AT for control of the PBX.

We were both aware that the data center part could easily be handled with one of several bulletin board installations. After coming to an understanding about getting paid, we put together a proposal and presented it to the person interested in establishing the call center.

The entrepreneur was doubtful, but said that he would consider it. Within a few days, he called and said that he had set up a meeting with Bell South to discuss the practicality of our proposed system. Both my telephony friend and I went to the meeting and described the system in very general terms. The representatives from Bell South (now part of AT&T) liked the idea so much that they wanted us to develop it and let them sell the system.

The entrepreneur then objected that the system could not provide a purely random selection among the operators connected to the PBX. Both my telephony friend and I felt that a random selection was not the best way to handle idle operators, both from a technical and an equity (the the operators) standpoint.

The best way to handle the problem, we argued, was to base it on the longest idle. We explained that when an operator dialed in or went idle at the same second, they would be put in the queue in the order of the line number they were on. He said that he would think about it.

We met with the entrepreneur several times, and he kept repeating that he wanted to think about it. During this time, several other minor objections were raised and answered. He then began looking for financing, approaching several venture capitalists, which at that time were very few.

He then began to look for other venues of financing such as insurance guarantees. His efforts were unsuccessful. When we saw that the business plan that he was presenting, he still had the “million dollar supercomputer” as the central server. Eventually, he went bankrupt when an economic downturn occurred.

At this point, my friend and I discussed developing the product ourselves. Looking at the Bell South contract, and our knowledge of future computer market development, and network development, as well as the reaction of venture capitalists to feelers, we decided not to pursue that market.

Contributing Writer Radcliffe Cutshaw is a serial entrepreneur, is currently a private consultant specializing in RF and analog design and development. He has been involved in many areas of engineering throughout his career.  

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