Beckman starts a business


The answer to Beckman's quandary lay in making the acidimeter part of National Inking Appliance, a small business with which Beckman was already involved. Beckman's interest in National Inking began when I. H. (Buzz) Lyons, the president of the National Postal Meter Company, visited him. National Postal Meter, based in Los Angeles manufactured postage meters, and while the major supplier of the meters was Pitney Bowes, in the 1930s National Postal Meter was a competitor. But Lyons had a problem that threatened sales: his machines kept clogging.

Beckman quickly concluded that pigment settling caused the clogging problem. Beckman told Lyons the solution was simple: use butyric acid in the formula for making the ink. Unfortunately, butyric acid has an awful smell, and Lyons could not get any major ink producers to manufacture Beckman's formula. Beckman then said he would produce the ink himself as a side project since he was still an assistant professor at the California Institute of Technology. A better ink was not Beckman's only involvement with National Postal Meter. Beckman also began collaborating with an inventor at the company, Hector Jewell, on ways to constantly apply ink to typewriter ribbons. Beckman came up with two methods to apply the ink, both resulting in patents. Armed with a non-clogging ink and two re-inking devices, National Postal Meter created National Inking Appliance on November 26, 1934, with Beckman as vice president and manager of the subsidiary. This was the beginning of Beckman's career as an entrepreneur, although he would protest for the rest of his life that "really, I'm not business-orientedů I'm concerned more about solving the technical problems and coming up with something that's useful for the advancement of science."1

Beckman found space for National Inking Appliance by renting, for five dollars a month, a ten-foot by twenty five-foot area in the back of a garage in East Pasadena. He equipped it with some laboratory glassware, Bunsen burners, and an exhaust hood, and he hired two Caltech students, Robert Barton and Henry Fracker, to work part-time along with him producing ink for National Postal Meter. But the patented inking pads failed when secretaries refused to use them, a failure that in the end proved a blessing for Beckman, since he now had a facility ready to produce the acidimeter. The failure also taught Beckman that inventions had to be ingenious and commercial to be successful.

On April 28, 1935, Beckman engineered a name change: National Inking Appliance Company became National Technical Laboratories. The change indicated that Beckman was altering his focus; instead of producing one product as a sideline, he now was beginning to see a future based on a program to produce and sell sophisticated scientific instruments. Moreover, National Technical Laboratories, or NTL, was an independent corporation, not a subsidiary of National Postal Meter. NTL did take $9,000 from National Postal Meter as seed money in exchange for ninety percent of stock. Beckman kept the remaining ten percent of the stock and he drew a modest salary.

At its start, NTL had only one product: postage meter ink, which it was manufacturing for National Postal Meter. But development of the acidimeter continued in the garage in East Pasadena and by September 1935, Beckman and his assistants had a marketable instrument housed in a wooden box with a handle and a latch, just in time for the fall national meeting of the American Chemical Society in San Francisco. Beckman took the acidimeter with him "and showed it to several chemists. In particular, I asked some of my former professors, whether, in their opinion, there would be a market for such an instrument. To put things in perspective, I should point out that our instrument was priced at $195, and it would be competing to some extent with litmus paper which cost only a few cents a vial."2

Beckman's professors suggested he show the instrument to laboratory apparatus dealers. "Their most optimistic estimate," he says, "was that 600 might be sold over a ten-year period before the market would be saturated. Not a very great sales potential, but I decided to go ahead. After all, it was only a spare-time activity."3 To help boost sales, the name was changed from "acidimeter" to "pH meter" to emphasize the scale that measures acidity and alkalinity. At the same time, "with reckless disregard for overhead costs,"4 Beckman moved production from the garage in East Pasadena to a vacant store building at 3330 East Colorado Streeet in Pasadena with a rent of $50 a month, ten times what he had been paying.

In 1936, the first full year of sales, NTL sold 444 pH meters, with a gross income of $60,000 and a net profit of $2,358. By 1939, 1,995 pH meters had been sold and the profit for that year was $22,160. Success meant that soon the "Beckman Glass Electrode pH Meter" was featured in the catalogs of all the major instrument dealers in the United States. The growth occurred even though initially Beckman's two assistants built each meter by hand. Soon additional staff was hired, including a one-person sales force to coordinate orders that came in from dealers in chemical instruments. The decision to use component parts rather than manufacturing them achieved economies of production. For example, costs were kept down by purchasing vacuum tubes. The enamel boxes that housed the pH meter's electrodes came from the Gaffers and Sattler stove company, which produced them as containers for salt and pepper. Business was so good that in 1937 NTL introduced the Model G pH meter, eventually selling thousands of this version.

By 1939 Beckman had to make a major decision about his career. For four years, he had been running NTL but had only the formal title of vice president. On May 11, 1939, the board of directors created the new full-time position of president, with a salary of $10,000 and stock as remuneration for running the company that had sales of $140,000 a year. Beckman understood that NTL had grown to the point where "somebody had to run the show full-time. It was a case of whether I tried to do that or whether I went out and hired a professional to do it."5 So "with great reluctance," Beckman resigned from Caltech to become president of NTL.6

The decision to leave Caltech was a difficult one for Beckman, but he sensed that not only did the company need a full-time president, but also that his role as an entrepreneur conflicted with the aura of pure science cultivated at Caltech. As he later said, "I enjoyed my association with Caltech and also I had a feeling, which is an extension of this attitude of the pure scientist, that anybody engaging in commercialism was somehow a second-class citizenů. I thought also, am I prostituting my scientific training by leaving academic and going industry?" Beckman concluded that he was not "prostituting" himself, eventually coming to agree with "many friends [who] say that I've done more for science by making thousands of instruments available for others then I would have done with my own two hands in a laboratory. I hope they're right. I don't argue with them too strongly on that."7


1 Arnold O. Beckman, Interview by Jeffrey L. Sturchio and Arnold Thackray at University of Pennsylvania, 23 July 1985 (Philadelphia: Chemical Heritage Foundation, Oral History Transcript #0014B), p. 11.

2 Arnold O. Beckman, Speech before the Newcomen Society, Los Angeles, November 10, 1975, printed as Arnold O. Beckman, Beckman Instruments, Inc. (New York, The Newcomen Society in North America, 1976), p. 13.

3 Ibid.

4 Ibid., p.14

5 Beckman, Interview by Sturchio and Thackray, 23 July 1985, p. 13.

6 Beckman, Speech, p. 15.

7 Beckman, Interview by Sturchio and Thackray, 23 July 1985, p. 13.


 

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