Excalibur And The Holy Grail

This is just an outline and will be rewritten to add more details such as dates, names, and descriptions.

We then entertained a $250,000 cash placement in exchange for 50% equity, with a French gentleman, Alain Clente, of the Asha Corporation, a developer of a 4-wheel drive automobile he sold to Chrysler.

Safko International Offices At Austin McDaniels	Lon Safko’s New Office
Our New Laboratory	First Batch Of SenSei Servers To Ship
Carl McCowen  Business Broker	Santa Barbara, California

We nurtured this transaction along through July and August.  We were to relocate to sunny Santa Barbara, California.  It got right down to the wire, and Alain declined the opportunity because of his association with Gary Fields, and the fact Gary had raised the necessary money for Asha to build their prototype.

Around July, in walks Carl McKowan, a finance arranger, or pseudo non-licensed broker.  Who growled like a bear and boasted of ability.  After several pointed conversations, he agreed to arrange for a venture placement for SII.  I agreed to pay upon performance.

By August, of ’87 we were broke with almost no options.  In the interim, we had lost Bob Hennig, as Datex would not offer him a position with the new SII, due to his lack of any computer qualifications.  The one good thing that arose form our ashes in August, I was awarded the 1987 Entrepreneur of the year, by the Westinghouse Management Association.

Tell about the meeting in Portland where the waiter ran into the parking lot after us shouting!

Once a year their committee selected a deserving entrepreneur, that somehow has made a contribution to society, and award them with a distinguished plaque and $100 savings bond.  They feel that the entrepreneur has contributed to the continued success of this country much more than any other occupation or sport.  I received this award on August 13th at the Tri-City Enterprise Center, while it was covered by NBC, CBS, ABC, and the Tri-City Herald.

Towards the end of August, things were bleak, but we were able to secure a sale with Keeler’s Medical Supply, remember them?  We agreed to buy back the existing SoftVoice System, and replace it with the now named, SenSei System, for the $5,000 difference in retail price.  The name SenSei refers to a Japanese term of dignity, meaning Master / Teacher.

The problem was to come up with the $5,000 to purchase the necessary equipment to build the unit.  The banks in Tri-Cities laughed at the idea of lending $5,000 at any interest rate for 48 hours, even with $16,000 collateral.  We were stumped.

Enter, Boyd Fricke, the president of Austin McDaniel Corporation, a publicly trade company in Kennewick.  AMC was in the software business.  They produced a software / hardware package that was called the Geographic Information System, or GIS.  This system would allow a utility company or municipality the opportunity to access data base information, and immediately see a map of the location of that information.  The company was doing about $1,000,000 a year.

After a short lunch, Fricke agreed to loan us the necessary financing to secure the Keeler’s sale, $5,000, for 48 hours, no interest.  We built the system and closed the sale.

Around the 1st of September we began negotiations to obtain $100,000 in financing into SII, and allow AMC exclusive marketing rights to the SenSei product.  The negotiations went with great difficulty.  Fricke’s obsession to purchase the product rights instead of the sales rights continually obstructed the agreement.  At one point I insisted that he take the deal and well, that he could, well, he should, well, forget about our working out a compromise.

Then miraculously the next day, a compromise was suggested by Mr. Fricke.  The suggested that he would buy the exclusive, world wide marketing rights to the SenSei Product, in exchange for $100,000, and we would continue to develop and manufacture at cost plus 15%, and would receive a $3,000 per month guarantee, and $1,000 per system for each one sold.  Sounded good, and quite neat and unexpected.  On September 25, 1987 we signed the contract.

At the same time, Carl McKowan did perform.  He arranged for a cash placement with Al Zlotnick for an equity placement of 50% for $250,000.  Because AMC was local, and the fact that no equity was lost, and the burden and expense of marketing would be with AMC, we declined this offer.  This decision did little for the future of the McKowan / Safko relationship to say the least.

We shut down our office location in the Tri-Cities Enterprise and moved to the AMC headquarters in Kennewick, where we occupied three offices, my own, a rather large office for Keith, and an area for reception.

Lon Safko

www.LonSafko.com

Bestselling Author & International Keynote Speaker

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