perm filename FOLKS.L1[1,VDS] blob sn#143097 filedate 1975-01-27 generic text, type C, neo UTF8
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C00002 00002		DEAR FOLKS:
C00020 ENDMK

  	At long  last I  am writing  a letter  to you.   In fact,  to
anyone.   I must  adimit that  I have been  spending so much  time at
Vicarm and at  Stanford during the  evenings that  I have had  little
inclination to  write.  The  current business dealings have  caused a
change in this total preoccupation with producing arms though.  It is
now obvious  that  a few  written  lines will  help  me to  clear  my
thoughts a bit.  

	Its  Monday evening and  Russ Noftsker  has gone back  to Los
Angeles.  Russ is an electrical engineer who used to be at M.I.T. and
is the guy who interfaced the arm there.  He also was instrumental in
getting  the Texas  Instruments Corp. order,  and provided  them with
consulting.  I have engaged him to handle some of my electronics work
and problems.   We spent the  weekend going over my  commitments, and
outlining a plan for both of us.  He will develop all the electronics
for the Bureau of Standards arm and will return in three weeks with a
prototype system.  In the meantime I will be actually fabricating the
unit which we will send to Washington.  

	Texas Instruments called today.   They have been having  some
problems with their arm, but they are not  dissappointed yet.  I have
promised  to provide them  with the  necessary repair parts  and make
improvements as needed.   They seem to be  patient.  With respect  to
the other  arms, we  have finally  gotten to the  stage where  we can
start  assembing arms, as  at long last  most of the  parts have been
made and the ordered components arrived.  What has  up until now been
just a  large pile  of parts out  on workbenches is  now transforming
into several beautiful black Vicarms.  

	Before I get into the current discussion on merger, etc. ,  I
will give you  a capsule business  summary of last  years activities.
We delivered  three arms during the year- all  model M.I.T. type.  In
return we were  paid about $20,000.   We also  had a small  machining
contract with I.B.M. which netted us about $100.  Thus our income was
about $20,100 for the year.  We had expenses too.  For labor we spent
about $15,000 all told.  We puchased a lot  of commercial components.
This  cost  us somewhere  around  $10,000.   We  also contracted  for
machining and other manufacturing and support services.  This cost us
about  $15,000 during  the  year.   In  addition  we have  the  usual
overhead  of  rent, utilities,  phone, and  everyday  office expenses
which cost us another  $5,000 or so during the  year.  This made  our
total expenses amount to about  $45,000 during 1974.  Subtracted from
our income  we find that a net cash outflow of about $25,000 occurred
during 1974.   But note, that  this does not  represent loss, for  in
addition to the deliveries made  in 1974, we also contracted for more
sales and made capital outlays for  the construction of all of  these
contracted for manipulators. Thus, Vicarm now has a total of 8 orders
in the process of being filled within the next three months.  And the
nice thing to know  is that most  of the manufacturing expenses  have
already been incurred. 

	Having worked daily at Vicarm for 3 months now, I now realize
that I cannot alone handle all the duties required to complete all my
contracts.  Possibly, I will  be able to deliver all the arms  I have
contracted  for, but it  is obvious  to me now  that I  must consider
having at least one other person who I can rely on to handle the more
mundane activities  which  take up  so much  of my  time these  days.
These tasks include handling the books, ordering parts, keeping track
of outside vendor delivery schedules, inspecting parts,  talking with
customers,  solving and  organizing the  work required  to solve  the
assorted  known  arm  problems,  and  the  new  ones  pointed out  by
customers who are trying to use these arms.  It is obvious that these
administrative tasks and the  customer relations tasks will take more
and more time in the future.  

	TWO SOLUTIONS APPEAR PRACTICAL.  The first is to not sell any
more arms after the current orders have been filled until the company
is  in the proper hands.   By proper  hands, I mean,  giving away the
designs and the details, plus some of the knowledge.... for  a price,
of course.  This  could take the form, of finding  some other firm to
make  the arms, or becomming a subsidiary  of another larger firm- as
in a merger.   In this way,  the operating mechanism would  be turned
over  to an  established organization.   As  a second  alternative, I
would consider expansion  as an  independent company.   Getting  some
capable people  in to  handle the  jobs they  have been trained  for-
administrators to administrate, and engineers to engineer, etc.  Now,
to do this will require  outside investment.  Investment in the  form
of both  money and time, in  exchange for ownership and  control.  It
seems  that the arm  business will be  too vast to  try to internally
finance anything larger than a small program. 

And this  involves just  continuing along as  I have been  going, but
with a greater spread in delivery dates, and less of a commitment  to
new and better designs.   In essence, it appears that  with a limited
increase in staff-  possibly one new person, Vicarm could continue to
make the  arms it already  has developed,  and also  introduce a  new
product here  and there for  the next few years.   ON A  SMALL SCALE-
while playing a wait and see attitude
...sort of waiting to get approached by a big company, or else to see
what happens  to the overall  robot market.   The  risk here is  that
tVicarm will get left behind and find itself entirely out of the mass
market, and only in  the special designs market.   But the safety  is
that  the  potential  for  loss  isnt  very  great,  as  the  capital
investment will be modest.  

	I am  at the present time inclined  to want to continue along
on the current  scale to complete the  orders I have  taken.  In  the
meantime, I will be talking here and there with potential "partners",
with the idea that should something promising develop, I would make a
deal.  This does not  mean that I would not do something  right away.
What  it does  mean is  that  I would  not do  something  which would
totally commit me to one course of action right away.  This is how we
get to Bill Lapson. 

	I've mentioned  that I have  been having  serious discussions
with  this person named Bill  Lapson.  Bill got  his PhD at Stanford,
about 5 years ago.  In M.E.--- Design.  Since that time he has worked
at a  research and  paper product  company called  Accurex.   His job
involved  work on assorted contracts-  mostly government contracts in
which fluid flows were involved.  He designed some  wind tunnels, and
assorted  experimental and laboratory  equipment.  Bill  was recently
laid off from Accurex because of lack  of work.  I have the names  of
some of the people he worked with and will  be checking into the real
reasons if  any.  I feel that he  was terminated because of politics,
and not because of  his work capabilities.   As I mentioned, Bill  is
the sort of guy whose opinions are so strong that you hesitate to get
involved  out of fear of clash.  and  he has gotten into many clashes
in his life.  Technically, he is competent to  design and do advanced
development.   He is probably not  the best guy to get  a product out
the door which is  a production model.  , as he  has only really  had
contact with prototypes all his  life.  And as far as  that goes, its
the same with me, although over the past year or two I have learned a
lot about production.  

	I will not go into the details of Bill, at least not the same
ones I mentioned  to you over the phone.   By the way, I  did not yet
get  your  letter today,  but will  expect it  tomorrow.   I  diid do
something new.  I called up a former professor,  who also happened to
be  Bill's thesis  advisor- Peter  Z.   Bulkeley who  is now  Dean of
Engineering at  Bradley University  in Peoria,  Ill.   We talked  for
about an hour and he did give me  some rather solid advice, including
some leads  which I will follow  up tomorrow.  He  feels that Bill is
competent as an engineer and creative inventor, but he is wary of his
business  and administrative  capabilities.   He  also  feels that  I
should talk  to more people before making a permanent commitment.  As
Pete says, I have the choice between a Toy and a Corporation.  One is
play and fun, the other serious and exacting.  He gave me the name of
a venture capital firm which I will constact tomorrow.... just for  a
conversation.  He also gave me the name of another guy in Los Angeles
who he feels very  competent.  I will try to talk to him too.  In any
event, he has encouraged me  to look around before making a  definite

	BUT THERE  IS A CATCH- I  have not yet said  anything about a
PhD  in  the  above  thoughts.   The  general  concensus  is  that if
outsiders get involved,  I will probably  have to seriously think  of
putting off the Thesis a few  years.  And this is what I am trying to
avoid.  That is the one area where  Bill can help me out.  He is  one
person who can learn  the ropes quickly and easily  and probably will
be able  to run from there- technically.  Whereas,  I may not be able
to find another person who could do  the same, at this time.  I  must
admit, that should  it oome down to  it that I have a  chance to make
the proverbial 10 million (inflation), or do the PhD, I would have to
opt  for the  money  at  the moment,  because  if,  and only  if  the
certainty of making the  money were good, I could probably accomplish
all that I want to do in the PhD, in the context of that new business
enterprise.  But for the  time being, I am still looking  for the way
to have  my cake and eat it too... so to  speak.  Until I find it, or
find that  it  is  not  possible,  I will  just  keep  going  along. 
Interestingly enough, I am relaxing a  bit more these days.  The cash
outflow is not as great, and it seems that I am slowly getting on top
of the  once insurmountable  list  of problems  and unsolved  details
involved in the arm designs. 

	I was  also thinking that it  may be good for you  to plan on
comming out here- possibly for a whole  week.  You could get an  idea
of just what I am  trying to do, and maybe also get a  chance to talk
to some of the people I am dealing with.  How does that sound? 

	Hey, I'm  getting a bit tired,  so I should sign  off now.  I
that this letter is a bit confusing especially when compared  to your
carefully  planned  and  executed  treatises. But  it's  better  than
nothing  you'll have to admit.  By the  way, .... hi mom, I know that
you will problably read this letter too. 

	I'll send more in a  few days.... maybe after I talk  to this
one venture capital group.... assuming that they will talk to me.