Monday, February 25, 2008

Stick With What You Know Best

Jennifer Thomas wrote, in Sunday's CDT, about Dave Barton, a entrepreneur who has set up a private business incubator in State College called The Blue Line. Who exactly is Dave Barton? This is from a 2002 profile in Forbes.
With a daughter off at college, Barton and his wife earlier this year liquidated their two major assets. They sold their dying business in San Jose, Calif. for a few hundred grand and their 1,800-square-foot house for somewhat more. They pocketed about $1 million. Not bad for a couple in their early 40s, with one kid at Ohio State. Then again, not too terrific when you live in the cosmically overpriced San Francisco Bay Area. What do you do next?

Barton's dying business was called American Machinist Supply. The 20-employee firm brokered custom tooling for factory mills and lathes. It was a nice little business, for a time. Then the economics that fueled it stopped working in California. During the late-1990s tech boom, Barton watched his rent triple to $28 per square foot per year. His employees could no longer afford to live in the Bay Area. Morale sank. Turnover soared.

Barton thought about relocating to San Diego, where rent and mortgage loans would go twice as far. Not enough. His wife suggested moving east. He learned that rent and mortgage would go five times further in Charlotte, N.C.; Columbus, Ohio; and State College, Pa. He walked into each city's Chamber of Commerce. Within 24 hours, State College's found Barton office space in a Penn State University-sponsored research park. That settled it.

Here's Barton's deal in a nutshell: He sank $500,000--half his net worth--into Blueswarf.com, his new company. Penn State offered him a no-interest loan of $125,000, payable in three years, and cheap rent. Barton, in turn, pledged to hire Penn State grads. He'll need those Penn State engineers, too. Blueswarf.com is high tech all the way. It harnesses the Web to automate the old American Machinist Supply-way of doing business that required 20 brokers on the phone. Clever software helps Blueswarf.com's customers crank up factory output by configuring mills and lathes with the best combination of tooling.

Catch the irony? In the heart of Silicon Valley during the boom, Dave Barton was Old Economy. Now, in the Pennsylvania boonies during the bust, he's New Economy--but without the overhead, fancy venture capital and gaudy expectations that killed so many boom-era dot-coms. Life is good. Barton and his wife have settled into a 3,800-square-foot house on 2 acres. Hisbiggest worry is hitting deer on the highway. Their spread--paid for in cash--cost a quarter of their old San Jose bungalow.

Barton also received a capital infusion from Ben Franklin. Here's what Barton had to say at the time that he received the $35k from Ben Franklin.
Barton says that he plans to use the prize money to hire Penn State students from the School of Information Sciences and Technology, the College of Engineering and the Smeal College of Business. Some will be chosen to be part of his "Blue Crew" sales force. The "Blue Crew" will demonstrate Blueswarf software at small trade shows through the Northeast.
Well, how many jobs has he created so far? Not many, at least, according to the Pennsylvania Center for Workforce Information and Analysis. Blueswarf.com doesn't show up in a search of their database.

That's not to say that Barton isn't trying to give back to community. The whole point of the CDT story was that he had founded a business incubator, Blue Line, to help local entrepreneurs. But, as it turns out, Barton has found that the biggest contribution made to Centre County by Penn State isn't a surplus of IT professionals, engineers, and business folk. No, the biggest contribution is the surfeit of ex-jocks. Five of the 10 companies now housed by Blue Line are sports related and the name itself derives from football.

Add to this the recent story in the Collegian about two Penn State grads that started a company to manufacture beer pong tables and you see that when it comes to entrepreneurship Penn Staters stay close to what they know best, football and drinking.




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3 comments:

Big Duffus said...

VB, you are good. I hope I'm not the only person reading your junk!

Could there be more to this story than J-tom realized as she typed up Dave's press release? Does the topic dovetail with your opinions vis a vis DOS and economic development? Damn straight.

David Barton said...

Who are you and why did you decide to attack me?

BlueSwarf technology was licensed to Kennametal (one of Pennsylvania's largest corporations and employers) and is marketed under their brand Kennametal 360 Powered by BlueSwarf. Of course a quick check to our website would have uncovered that fact, but that didn't support your rant. Our technology is used to increase the productivity in many American factories saving thousands of jobs from going offshore. Because of the difficulty I had in trying to start a tech company here (hence why we went the licensing route), I decided to take money out of my own pocket to create an incubator across the street from campus to try and help.

Why don't you back away from the keyboard and volunteer to help instead of attacking those that are trying to make something happen?

Anonymous said...

What is with the negative comments? I would say that D.Barton is doing a wonderful thing and why can't we just acknowledge it and leave it at that? Why make it personal? People like Veblen discourage folks from doing good deeds, let's just hope that not too many people read this trash.