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Purdue Research Park incubates startup businesses and attracts investors

When the Brouillettes of Fowler, Ind., sold their Demeter LP grain elevators operation a few years ago, they began searching for investment opportunities. It was 2001, and they had heard about the new high-tech business incubator just opened at Purdue Research Park in West Lafayette. They wanted to know more about what was going on inside.

A business associate suggested they meet with Sam Florance, director of the Purdue Gateways Program, to find out more about the incubator’s startup companies. Florance introduced the Brouillettes and associates to several new ventures at the research park. One of the companies, gh, was being formed by Purdue graduate students Dave Schleppenbach and Joe Said. The students’ goal was to use technology-based innovations to provide equal access to information for people with disabilities.

"We wanted to invest in a company with both a solid business plan and a high potential for success," says JoAnn Brouillette, Demeter’s president. "But we were also intrigued by how this emerging company’s technology could benefit society."

Schleppenbach became interested in the challenges faced by people with disabilities when he met Wendi, who has been blind since birth. Wendi and Dave, now married with nine children, wanted to use advanced technology to make it faster and easier for blind and low-vision people to get college textbooks. Their dream spawned the Purdue Visions Lab on the West Lafayette Campus and, eventually, the company gh.

When Schleppenbach decided to take the technology to the marketplace, he and co-founder Said moved into a small office at the Purdue Technology Center, one of three facilities that form Purdue Research Park’s incubation complex. The complex, about two miles north of the West Lafayette Campus, is the largest university-affiliated, high-tech business incubator in the country.

"We could have started our business anywhere, but I wanted to be where the cost of living and doing business was low," Schleppenbach says. "And with my growing family, quality of life was an important factor."

The park helped the company by offering an affordable rental rate, a flexible lease and office space that could expand with the company’s growth. The company had access to incubator advantages that include a receptionist, high-speed Internet connection, exterior and interior suite signage, computer, laser printer, copier, fax machine, postage meter, storage, break room, building security, basic utilities and janitorial services.

Once these basics were taken care of, the company could focus on the technology. Schleppenbach and Said immediately began working with the Purdue Gateways Program to form a solid business plan to transform their technology into a marketable product.

"Compared to the average startup, we felt we were a safe investment for an investor," Schleppenbach says. "Our growth potential was high and the disabilities industry was ripe for a technology infusion."

The Brouillettes and two other investors associated with Demeter decided that gh was the opportunity they were looking for.

Ken Klemme, vice president of Demeter and one of the investors, said the park has given gh the foundation necessary for an emerging technology venture.

"The research park is a place where technology companies can get on their feet in order to attract angel investors," Klemme says. "We came along with our finance and management experience, as well as funding, to take gh to the next step — profitability."

Once Demeter’s investment allowed the company to fully develop its first service — translating documents from print into Braille by using a proprietary conversion process — orders started rolling in.

One of gh’s biggest clients is the Internal Revenue Service. Producing tax documents for blind taxpayers has led to a General Services Administration (GSA) endorsement of gh by the U.S. government until the year 2006. All government agencies must go through GSA-approved vendors because the GSA negotiates discount prices with companies in exchange for the long-term security of blanket contracts.

"The growth of the company has been explosive," says Schleppenbach. "In three years we have grown from two to 36 employees and hired a general manager. We pay competitive salaries and have an excellent benefits structure for a company this size."

Other companies at the research park have had similar success. Copient Technologies, a research park startup recently acquired by NCR Corp., is growing.

"Copient will operate as a division of NCR and remain housed at the park," says Bret Besecker, Copient’s chief executive officer and a Purdue alumnus. "Companies like NCR appreciate that the park is located close to Purdue’s pipeline of talented information technology graduates."

Besecker sees the 10-person company growing to a 40- or 50-person company in three years.

Some companies, like gh and Copient, get started at Purdue Research Park with the bright ideas of Purdue alumni entrepreneurs. Other companies decide to put down roots at the park when they license Purdue technologies.

For example, Cook Biotech is developing wound repair technology discovered at Purdue. Sales growth is pushing the company to add manufacturing capacity, so Cook Biotech is building a 55,000-square-foot facility at the park to produce its medical products.

"Our expansion is in direct response to the market demand for this tremendously useful discovery," says Mark Bleyer, president of Cook Biotech. "Being at the Purdue Research Park keeps us close to the researchers and their expertise."

While certain companies are enhanced by close proximity to Purdue’s faculty and students, other companies have specific needs that Purdue meets.

"We found that using Purdue’s sophisticated lab equipment through the University’s charge-back system really helped us to direct our profits toward the growth of the company instead of having to invest in very expensive machinery early on," says Sally Byrn, president of SSCI Inc., an incubator startup that "graduated" into the research park’s Innovation Center, a building designed to house mature companies.

All ventures within Purdue Research Park will benefit from the park’s new state designation as Indiana’s first certified technology park. A result of 2002 tax restructuring legislation, the new certified technology park program encourages the location of high-technology businesses within areas identified by local redevelopment commissions. Portions of tax revenues generated by tenants are reinvested in the park and used for improvements, operation and maintenance of facilities, payment of interest and principal on bonds, and other business-generating activities.

Purdue Research Park plans to use the certified technology park program to further develop the technology centers and telecommunications network. This will help the park serve more mature ventures as well as startup high-tech firms. Better service will make the companies more competitive.

Staying competitive for gh means expanding its customer base and distribution channels. In partnership with Aequus Technologies LLC, an East Coast firm, gh plans to provide the entire disabilities industry with a high-tech approach to information and communication. gh and Aequus have plans to use emerging technology to make two areas — standardized testing and reading — fully accessible to people with disabilities.

Schleppenbach says gh wants to create an environment that will allow people with disabilities – such as blind, low-vision, deaf and hard of hearing, and the learning disabled – to read the latest books and to take any required standardized test, such as the GED, K-12 state assessment tests or higher education assessment tests.

"We have actually been able to affect federal legislation that will require publishing companies to begin providing a certain type of electronic file for each book they publish," Schleppenbach says. "These files, and the technology we can provide, will make books easily accessible to all people with disabilities."

For the investors, this is an exciting development.

"We feel we made a sound business decision by investing in gh. That was our first priority," Klemme says. "But you can’t help but feel proud that the company you’ve invested in is doing groundbreaking work that will change lives."

Story by Jeanine Smith