Fruchterman came out of
Caltech in 1980 with bachelor’s and master’s
degrees in electrical engineering and applied physics
(and a private pilot’s license, too). He went on to
Stanford to pursue a Ph.D., and like most techies there,
was bitten by the entrepreneurship bug. At a series of
talks by entrepreneurs, he met Gary Hudson, whose GCH
Inc. was building a rocket and intended to compete with
NASA’s satellite-launching business.
After his talk, Hudson invited Fruchterman to have
dinner. “Gary asked me who my favorite science fiction
author was,” Fruchterman recalls. “I told him Poul
Anderson. He said, ‘You’re hired.’”
Fruchterman left Stanford and became GCH’s chief
electrical engineer. He was 21 years old. His boss
there, now one of his closest friends, was David Ross,
then a 30-year-old physicist. Fruchterman took charge of
designing the rocket’s telemetry, remote control system,
and self-destruct command system. In August 1981, GCH
trucked its first rocket to Texas for launch.
The rocket exploded on the launchpad. Fruchterman and
Ross made sure the fire crews put out the flames and
then joined a few other GCH employees who commandeered
the company plane and flew it to the Bahamas for a week
on the beach. By the end of the week, Fruchterman and
Ross had decided to start their own rocket company.
Unfortunately for them, they never got the $300
million in funding they had sought. But while trying to
get it, they met Eric Hannah, then a microprocessor
designer with Hewlett-Packard. He had the start-up bug
as well. He wanted to build an optical character
recognition system on a single chip, something that
could read anything. But he didn’t have an application
in mind.
Fruchterman had a great idea, one he’d been mulling
over for years: a reading machine for the blind.
Fruchterman, Ross, and Hannah joined together in 1982
to form what they eventually called Calera Recognition
Systems. The firm would make a new kind of optical
character recognition device, one that could recognize
any font without being painstakingly “trained”
beforehand by its user.
Research for their business plan turned up the obvious
but disappointing fact that there was no money in making
reading machines for the blind; rather, the earning
potential was in devices that scanned legal documents,
insurance forms, and tax returns. Reluctantly,
Fruchterman went along with the shift in the target
market.
They raised $25 million, hired 110 people, and by the
mid-1980s, they were selling font-independent
character-recognition systems to the tune of $10 million
a year. And Fruchterman was bored.
So in 1986, he and Ross started a skunk works within
Calera to finally build that reading machine for the
blind. In 1987, they showed a prototype to their
investors, and they argued that although the product
might bring in only $1 million a year, it would be good
for public relations and employee morale.
The investors said no. Fruchterman and Ross left
Calera in 1989.
They obtained the rights to start two companies based
on the Calera technology: one, RAF Technology, in
Redmond, Wash., to develop custom products for large
government customers; the other, Arkenstone, to do the
reading machine. In exchange, they had to agree not to
hire any Calera employees or compete with Calera for a year.
Fruchterman spent a year dealing with the legal and
logistical minutiae of establishing the new companies.
He set up Arkenstone as a nonprofit organization,
reasoning that at his projected $1 million a year in
sales, he couldn’t do better than break even, and there
would be public relations and tax advantages to being a
nonprofit.
For a while, both Fruchterman and Ross worked with
both companies. In 1995, they split them. Ross took RAF,
which today supplies optical character recognition
technology to the U.S. Postal Service and to other
businesses that process mail and forms. It also supplies
authentication technology to the U.S. Department of the
Treasury. Fruchterman took Arkenstone, which then had $5
million of annual sales from reading machines, at about
$1500 each.
It was fun. For a
while. In the late 1990s, Fruchterman says,
“I’d been running a $5-million-a-year business for 10
years. I wanted to do more.”
Around that time, he and Ross would meet regularly for
long hikes through the foothills above Silicon Valley,
while lengthily discussing a broad range of subjects. On
one of these excursions they got to talking about
various human rights outrages—including a massacre of
600 people near the Sumpul River in El Salvador in 1980
and the bloodbath in Tiananmen Square in 1989. They
speculated about futuristic technologies that could
protect protestors or at least alert the world if these
people were killed or abused.
“From then on, we knew we wanted to do something in
the human rights field,” Fruchterman said. And with the
boom starting to rumble, “we suddenly had all these
dot-com billionaires who we thought might give us money.”
Meanwhile, Freedom Scientific, a for-profit company
based in St. Petersburg, Fla., that makes products for
the blind and vision-impaired, made an offer to buy
Arkenstone. The timing couldn’t have been better.
In 2000, Fruchterman formed the nonprofit company
Benetech, funded with the $3 million he got for
Arkenstone from Freedom Scientific.