July 21, 2005.
When Stan Messmer arrived at his job on Monday morning, March 14, 2005, he expected to go through the door and head for his desk as had been his routine for 10 years. Instead, he was greeted by a security guard, who instructed him to go to the main entrance. There, he joined 60-plus fellow workers who were gathered in one room and were informed briefly and bluntly by their president and CEO that, in Stan Messmer's words, "The game was over." The company had declared bankruptcy and was closing immediately, and all the employees were escorted to their private work areas to retrieve their personal belongings and leave.
The company was Telesensory Corporation, the oldest company in the arena of assistive technology for people who are blind, and its abrupt end came as a complete surprise to everyone--from stockholders and customers to dealers and the top management, with the exception of President Ken Stokes who made the announcement. It was the hottest rumor just one day later at CSUN 2005 (the Technology and Persons with Disabilities conference hosted by California State University at Northridge's Center on Disabilities), where industry peers looked in amazement at the empty booth space that Telesensory had reserved in the exhibit hall and repeated the unbelievable but true tale of the company's demonstration of disregard for its employees.
Just weeks before the company closed, Messmer, who managed inside sales, attended a meeting where long-term goals for the company's sales were discussed. There was no announcement of cash-flow problems, no warning of layoffs, and no indication that such a traumatic event might occur. Not only were all the employees abruptly displaced without vacation pay, sick pay, severance pay, or medical insurance, but they were informed after the closing was announced that there had been no medical coverage since March 1 because the payment to the insurer had not been made.
"I had suspected that a merger was about to happen," Messmer commented. "That's what all of us thought. But nothing like this."
Art Bookbinder, senior vice president and a Telesensory employee since 1984, had a slightly different suspicion. His understanding was that the company had a shortfall of about $1.8 million (estimates are that the debt was closer to the $12 million range) and that the closed meeting of the board that was held on March 12 would result in a plan for the directors somehow to come up with the money on their own. When he received the telephone call in New York from Telesensory president Ken Stokes on Sunday, just a day before most others would be told, he, too, was shocked.
For 35 years, Telesensory has been a recognized name around the world in assistive technology products for people who are blind or have low vision. How did a company whose history was marked by a string of successes and legendary products and people crash and burn in such an appalling manner? Although a complete explanation may not be apparent to anyone at this point, we can at least examine the "what" of the story.
Telesensory began operating in 1970 in Mountain View, California. The Optacon, a device that translates print into a tactile vibrating image, showed promise as a successful reading device for people who are blind. Developed for the daughter of John Linvill of Stanford University's electrical engineering department, the machine was enthusiastically sought by blind people and their advocates--and, indeed, remains a significant tool in the access toolbox for many people who are blind today. Linvill, with his colleague Jim Bliss, set up the company, and before long, it was known not only for the Optacon, but for other innovations in assistive technology as well.
Didn't You Work at Telesensory?
Many familiar people in the assistive technology field today--who are now associated with such assistive technology companies as Kurzweil, HumanWare, and Freedom Scientific, as well as myriad small businesses that design or distribute assistive technology products--launched their careers at the then-legendary Telesensory. Noel Runyan, now president of Personal Data Systems in Campbell, California, who was with the company from 1978 to 1983, recalled his experience at Telesensory with a blend of fondness and frustration. As an applications engineer--and perhaps the first blind person to work for the company--Runyan described the Telesensory environment in the 1970s and 1980s as bursting with the energy of young, talented, creative people who were racing to develop great products for people who are blind--"and spending money like crazy" to do it. The VersaBraille emerged from that exciting environment--a cassette tape-based device that recorded information digitally and displayed text on a 20-cell braille display. Developed initially for the National Library Service for the Blind and Physically Handicapped, the device was rejected for that organization's Talking Book program, but was embraced by blind users everywhere.
Telesensory's economic success began to shift somewhat in the mid-1980s when it bought a company named Apollo in 1984 and started selling products for people with low vision; and then in 1989 bought Visualtek, a company that specialized in closed-circuit television systems (CCTVs) and other low vision products. Larry Israel, Visualtek's CEO, became a member of the Telesensory board and later ran the company for a time. In recent years, Israel was again connected to the company by serving on its board of directors.
A Change in Focus
In the late 1990s, Telesensory shifted its emphasis from products for people who are blind to focus on CCTVs, magnifiers, and products for people with low vision. When the company continued to decline, Ken Stokes, of New Zealand, was hired. Stokes had served previously as chairman of the board of Pulse Data International. His primary directive at Telesensory was to sell the company.
Unfortunately, none of the companies that were approached was interested in buying Telesensory. Art Bookbinder, who was part of just about every aspect of managing the company except working with the board, believes that the approach was far too narrow in focus. There were, he believes, private investors who would have gladly participated in rescuing Telesensory. Still, even Bookbinder was astounded when the amount of debt was revealed.
Of the 120 individuals whose livelihood depended upon Telesensory, perhaps the luckiest ones are the 18 independent dealers around the country. "Most of them had been with the company 15 to 20 years," Bookbinder explained. "And they were like family." The day after he learned that the company was closing--the same day that the on-site employees were informed and Stokes sent an e-mail message to all the others--Bookbinder brought the dealers together on a conference call. At that meeting, they developed a strategy. Conveniently, it happened to be the beginning of the CSUN conference, where all of the other low vision product distributors would most likely be present. The erstwhile Telesensory dealers rented a meeting room and orchestrated meetings with each of the other companies with whom they might forge agreements. Calling themselves the Bookbinder Group, they saw their answer to continued employment in becoming distributors for former competitors.
"It worked out pretty well for most of the dealers," Bookbinder said. "They might pull companies like Optelec out of the doldrums and increase business for companies like MagniSight and HumanWare."
Many former employees, however, have not been so lucky. Stan Messmer, like many of his former colleagues, scrambled for the first few days just to find health insurance. He did--and is paying for coverage privately at an enormous cost. Meanwhile, the primary focus for most former employees is to find new jobs. "The list of creditors before those of us who are owed vacation and sick leave is so phenomenal," Messmer said, "and we're so far down the list, that I really don't have any hope of getting any of the money that Telesensory owes me."
When Imitation Is Not Flattery
After 35 years, a giant in the assistive technology industry--a company that was steeped in legend and lore and produced many products--appears to be gone forever. Usually, it is a good thing to see the assistive technology field reflecting trends in the mainstream marketplace. Shutting down overnight, leaving long-time employees without jobs, and defaulting on obligations to workers, distributors, and customers are trends from the mainstream corporate world that most of us did not expect to witness in the field of assistive technology.
Still, although former CEO Stokes has returned to New Zealand and neither he nor former directors were reachable for comment, not all is entirely lost. Creditors have installed seven former Telesensory employees in a California warehouse, where the company's products, manufactured in Malaysia, have for years been prepared for final shipping. Calls made to the toll free number that once belonged to Telesensory are now being routed there, and handled by that small group of individuals. Requests for technical support are being answered, in other words, and commitments made by warranties still pending are being honored. What, if anything, happens next remains to be seen.
End of article.
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