U.S. Business: One Way to Do It

Though electronics companies frequently start with little more than an idea and a basement workshop, Scientific-Atlanta's beginnings were inauspicious even by those standards. Founded in 1951 by six Georgia Tech staffers to produce some items developed in Tech's labs, it began with an initial capital of $600 and a corner in an Atlanta air-conditioning warehouse. Its founders were so unwilling to chance their futures that they kept their teaching jobs, hired as general manager a Union Carbide physicist named Glen P. Robinson Jr. Robinson worked the first year without salary, and the company lost $4,000 on its first job. When five of the six original investors became disgruntled, Robinson bought them out, repaying each his original $100.

He has not had cause to regret it. At 39, he now heads a company that has captured 70% of the world market in the esoteric field of antenna testing equipment, last year raised its sales 38% to $3,100,000 and profits to $181,000. Scientific-Atlanta recently moved into a new $700,000 plant on 25 acres of prime land in an Atlanta suburb, is now planning an addition that will double the plant's size. The company owes its remarkable success to an ill wind that blew a lot of good. Its bank account was so low that it could not afford to buy an expensive piece of equipment that it needed to stay in business—and so began making it itself.

Largely supporting itself by making and hand-testing military radar antennas, struggling Scientific-Atlanta got a Signal Corps order in 1954 to develop a new plastic lens antenna. It needed a recorder to test the patterns of the more sophisticated antenna, but the cheapest recorder cost $10,000—just about the company's net worth at the time. Robinson rounded up consultants from Georgia Tech, worked day and night for five months, finally developed a homemade recorder that was more accurate and could be sold more cheaply than those on the market. The recorder converts radio signals passing through an antenna into graph lines that show in which positions the antenna receives or sends its strongest signals.

The new recorder was a hit with indus try; Scientific-Atlanta hoped to sell 50, instead has so far sold 752 (at $4,300 each) to such companies as General Electric, Sperry Rand and Bell Labs. Its staff has grown to 40 engineers and 260 other employees, who now make testers for almost any antenna from TV to military fire control, and its success has attracted venture capital from Rockefeller Bros., Inc., put up at Laurance Rockefeller's recommendation. "Space activity," says Robinson, "has given this field a big boost. There is no other way to communicate with a space vehicle except through an antenna."