Jack Berlin, CEO at Accusoft, was awesome enough to spend a good hour and a half over the phone with us to talk about all the cool things going on in his life, including his work with the parks, what got him passionate about digital photography, the history of Accusoft, and a state of the union on tech in Tampa.
Roxanne Williams: Accusoft has been in business for 27 years. Congratulations on that massive milestone! You guys actually started as Pegasus Imaging and that was created due to your fascination with digital photography. What is it about photography that you’re so passionate about?
Jack Berlin: This is fun because I’m a technology geek. I had sold my first company that I started in the late ‘80s and happened to be at a trade show when I saw the world’s first digital camera. It was one quarter VGA resolution, so you’re talking 322 40, grayscale only, not even color. I saw that thing and I just fell in love. I just knew where it was going. I don’t know why. I tried to go to work for those guys. They were out of Chatsworth, California and ultimately were sold to Logitech, which is where the digital camera took off, of course. But they had built the first digital pixel array to do digital imaging and it was grayscale. I tried to go work for them, but I decided I didn’t want to move to California at the time. I just knew I wanted to get involved with digital imaging. At the time, to get something digitized, you had to use frame grabbing – it was thousands and thousands of dollars to do digitization. If you put yourself in my shoes, seeing that little brick (the camera really was the size of a brick) was just really, really cool to see.
Matt Vaughn: That’s excellent. Roxanne and I are photography junkies as well. What do you shoot with today?
Jack: My Android.
Matt: It’s amazing how well they’re coming along.
Jack: I suspect that mobile technologies will go much further. I think that, sooner or later, we aren’t going to need laptops or PCs. You’ll throw your phone on your desk and you’ll have some sort of interface device, a mouse, a keyboard, and a monitor, and everything else will just be run right off your phone. They’re more powerful now than the PCs were 15, 20 years ago. I like the notion of having more computing power on your iPhone or Android than the shuttles did.
Matt: Yeah, that’s one of the nice things about Roxanne and I’s ages – we grew up both before and during internet, and that’s one of the most fascinating things to me. Going from original dial-up and Windows 95 to now. I love following the modular laptop concepts where you just click a phone into it and all the processing power and graphical power are running a husk of a laptop.
Jack: Well now that most of your processing is going to happen cloud-side anyway, instead of Word and Excel, you’re going to use Google Docs and Google Sheets. Your CRM is in the cloud. So much is happening where you’re using the processing power of the PC just to interface with your devices and with the internet. It is interesting – my kids don’t have that perspective of pre-internet, and I think it’s wonderful. I used to travel to Europe and didn’t talk to my wife for 10 days because it was too expensive – and now, it’s essentially free.
It’s an interesting transformation. I don’t think it’s going to slow down. I hope it doesn’t. I hope that we’ll have maturity enough as a society to regulate it properly and carefully, but when you see awful things that happen because of aspects of Twitter and Facebook, it makes you wonder – but that’s just part of maturing our culture around controlling and moderating technology.
Matt: 100%. To call back to what you said earlier, you said before you started Pegasus, you worked with another startup in Atlanta. Was that in telecom?
Matt: Did they work in document imaging / imaging processing as well, or compression?
Jack: No. I got involved fairly early on selling software for Apple IIs and PCs, and as I grew up, I decided I wanted to be my own boss. I got together with a couple of guys, and we decided to sell intelligent communications cards.
And basically, I learned a couple of really valuable lessons that I forgot to pay attention to in graduate school. One is, don’t undercapitalize your startup. The second one is, never do hardware again. The carrying cost for the inventory, chips, parts to ship, and then the carrying cost of the receivables when people weren’t paying you for 60, 70 or 80 days – as we grew, we just couldn’t fund our carrying cost.
After about 3 years, we had just grown from 0 to 10 million dollars and we couldn’t capitalize the business. There was no way to finance it, and the next order for the next couple of hundred cards was more than we had in the bank. If we placed that order, we knew it would be 90 days before we would see the money from that. We decided to sell, and I saw my first digital camera soon thereafter and then finally decided to move to Tampa and try it myself as Pegasus.
Roxanne: Speaking of Pegasus – the company has, over the years, shifted and rebranded. The current focus is on SDKs and APIs. Can you expand on the switch to being a pure tech company as opposed to digital imaging?
Jack: I’m going to give you a little bit more detail with that, because we started out as pure tech. We were building our own image compression algorithms, we were building our own color conversion algorithms. We were licensing technology at the lowest, lowest level. We were licensing to companies that were building in – this is pre-JPEG, or the JPEG standard which got standardized in 1991, 1992, 1993 – so we were doing our own flavor of JPEG compression. We didn’t call it JPEG at the time, but it was using the same technology. Not to sound really old, but PCs of that ilk at that time only had 256 colors, I think. This was VGA era, before true color. So, you only had 8-bit displays. Photographs looked like crap. You had to do what was called color mapping and dithering to make the image look halfway decent. And this was back in the days of dial-up and everything was GIF, which was 8-bit color, but they were fairly crummy when it came to skin tones and true photography because most GIFs are cartoons really, drawings.
So we were doing technologies like that, and the reason I said it was kind of a bad business plan is, we found out really quickly in the digital photography world as the Canons and the Nikons and the Kodaks and everybody got into it, all of them were trying to compete with price – you might as well wait a week because it’s going to be $100 less. And they kept adding megapixels and it was one of those things, just add more and more to the camera and cut the cost more and more. It’s not a business that was good for them, and it certainly wasn’t good for us because nobody wanted to spend any money on technology. Our image compression technology may have been better, but it wasn’t good enough for them to pay us a couple of cents per camera. We found out very quickly that our market was limited. The upside was limited to people that really did care about having the best and the fastest. We were very big in CD-ROM technology, for instance, we ran Compton’s Encyclopedia, and basically all the games that were coming out. They really had to compress to get this stuff on 320MB CDs.
We had a lot of success in that world, and you know what happened to that world in 1994 when the internet came in. It just disappeared. We found out very quickly that even though we loved digital photography and photographic technology, there wasn’t much growth there. We were paying our bills, but we would basically go in for bidding wars against somebody that was all price-based in the photography world. We found one niche that wasn’t price-based, and that was medical. By 1994 or 1995, we had aimed most of our technology towards the medical world where they would pay a decent price to get decent technology because they were selling million plus dollar systems for chest X-rays and cardiograms and ultrasounds.
That was a growth area for us. At the same time, document imaging was taking off (which was scanned pieces of paper – that’s where faxes come from) and people were scanning documents and storing them digitally as opposed to filing cabinets. We actually started selling and servicing document imaging systems and that sort of really grew for us. It was not technology at all. All of a sudden, we had gone from being a technology player to where only about 20-25% of our business was still technology and 75% of our business was selling and servicing document imaging systems and databases. It was growing very rapidly. I, on the other hand, did not enjoy it.
We took a round of funding in 1995, and by 1998, I was working to sell all of that integration side off to the venture capital firm, which finally completed a couple years later. In 2000, we split the company in two. So, here we are in 1999-2000, right before the recession, starting over again. We were reinventing ourselves now for probably the third time before our 10-year anniversary.
Once we spun off, we started over again – this time with SDKs. We bought a couple of our customers that were selling. Back then, it was all VDX and ActiveX stuff. They were selling toolkits to do imaging types of things, focusing on document imaging. We bought three companies for their SDKs, we packaged them up, and we started to grow. And this time, focused on our own technology and not integration of other people’s technology.
We bought a competitor of ours in 2004 (by this point, we were a 5-6 million dollar company) and we just kept growing on the document imaging SDK side of the business. In 2008, we bought our largest competitor at the time, which was a company called Accusoft. They were out of Boston and we bought them. We bought their assets, and of course, one of the assets was their name. We changed our name to Accusoft and moved the incorporation and the company down to Florida. By this time, we were probably at 15-16 million in top line. So, we had grown fairly rapidly in the SDK and API world.
Over the last 10 years, client-server development has been shrinking very rapidly because most people are putting their APIs in the cloud, and they’re doing it SaaS based. People are much more interested in getting an API that solves a problem as opposed to buying a big SDK. We started looking at how we could be more internet-focused, and this is sort of a shift for us. The other thing that was concerning to me was that we had gone from photo imaging to digital imaging, which now included photo and document. I’m now trying to transform us to remove the word ‘imaging’ from a description of who we are. In the end, you work with content all day long. Less and less of that is an image. More and more of that is Word, PDF, Excel, PowerPoint – all kinds of things that are not images. Content used to only be scanned receipts, purchase orders, invoices, and contracts – and all of that was scanned, but now more and more that’s going to be e-filled and e-signed. It’s never going to be a physical thing: it’s going to be a web form, it’s going to be a contract that moves around as a PDF and just goes right into your database.
The transformation we’re looking at now, we’ve been looking at for some number of years. Most companies are going from digital imaging to digital content. And so, that’s kind of the direction we’re trying to move. We are not in the database business per se, but we’re trying to do all things possible that you might want to do with a document: if it’s a digital image, you might want to deskew it, OCR it or read the barcode on it. Or, you might want to scan, print, or edit in some way. If it’s a document that’s online, you might want to e-fill, e-sign, route it, put it in some workflow, have it feed a database in some way. So, we’re trying to get involved more and more with things that are outside imaging. We’re trying to go from document and digital imaging to basically digital content or digital document management.
Roxanne: I actually have a question for you that’s not on the list, and it can be off the record if need be. I’m just curious, when you bought Accusoft, why did you choose to take on that name?
Jack: Pegasus was a name that my original partner came up with. As you well know, there’s Pegasus racing yachts, Pegasus contact lenses, Pegasus sinks and faucets, there’s Pegasuses everywhere. We could not get pegasus.com. I mean, if we tried to register that horse, we’d be up against one of the largest companies in the world: Mobil Oil, with their pegasus horse. It was a very hard mark to protect from a trademark standpoint, from a property standpoint, and really, when we had Pegasus Imaging on the side, people thought we were a medical imaging system that they should come in and get an MRI or something.
With Accusoft, I had to worry a little bit because they did not have the same reputation as us. We had a much better reputation in the market as a competitor. I wanted to make sure we didn’t take on any bad connotations from buying them because there was some sourness in the market – that’s one of the reasons we could buy them. But what we did is, we were Accusoft-Pegasus for two years, kind of like the AT&T-Cingular thing. We did the hyphenated name, which was expensive from a marketing standpoint and branding standpoint, but we did that for two years before we became Accusoft Corp to give everybody some feeling about, hey, this is being run by a new sheriff in town. Pegasus bought Accusoft, it wasn’t the other way around. We bought them in 2008, so probably by 2010, we were changing the name to Accusoft and, honestly, I just liked the name better. To me, it was the higher tech name, we had accusoft.com, and it was easier to protect from a trademark standpoint. Overall, there were many reasons for us to change the name.
Matt: Excellent. Thanks for the insight. On your bio on the Accusoft website, it says you’re active with environmental and conservation efforts, which we very much appreciate. For those that don’t know, could you give us a little highlight of what you do around that?
Jack: Yeah, I guess I am a bleeding heart liberal, unlike most of the men of my ilk. I got involved – oh gosh, it’s been a long time – 15 or 16 years ago. I got involved with my county commissioner, who was Cathy Caster at the time, and she appointed me to the parks board as her representative overseeing the parks. I’m still on it. Through that, I got exposed to the wonderful world of our county park system. It’s expansive. As chair of the parks board, I became a member of the ELAP committee, which oversees land acquisition and the protection of these lands, and a lot of it has to do with restoration and reclamation. We have over 60,000 acres under protection now as a county, which is incredible.
And so I got involved with the ELAP program, I’m still on the site selection committee as well as on the board of the environmental land program, and I also am a member of the Friends of the County Parks and Recreation Inc board, which is a different organization. That’s a charity around raising money for parks programs that aren’t funded through budget. We have a handicap Olympic team here that has to travel, they have to raise money, they’re having a golf tournament here in November. A lot of fundraising for kids events, getting them T-shirts, getting them hot dogs, getting movie at the park, all that outside of the county budget. So, I’m involved a lot with our county parks, which also oversee the lands management for our ELAP program. That has been very fulfilling for me, especially the ELAP program.
Matt: That’s great! That’s the philanthropic side of what you guys do. On the local market and tech side, I know you’re a part of the Tampa Bay Tech CEO group. Are there any other community events around technology that you’re involved with?
Jack: No. We were a wary Tampa Bay Tech member. I was at an event somewhere and met a gentleman by the name of Seng Sun, owner of SunView Software. He and I were just talking about the whole local software arena and we were both lamenting the same thing: nobody knows who we are, nobody knows what’s going on in software in Tampa Bay. We wondered if there were other people in Tampa Bay that felt the same way we do. So, we put a few rules together. One, you had to be locally headquartered here. Two, you had to be a member of Tampa Bay Tech. Three, you had to have at least 10 W2 local software programmers – because we wanted real software companies that were in the area.
The whole point of this group is to try to raise awareness in and around Tampa Bay’s software ecosystem. We’re going to do some events over the next year, and we really do think that we have a bigger ecosystem than people know about here. I had always avoided local events because I felt like every time I was at a local event, all I would do was get people that wanted to sell copiers and phone systems to me. I didn’t want to pay to be in something I was going to be sold to. But, this is a very small group of like-minded CEOs. We can have lunch together, nobody’s going to sell to anybody, we can talk about what we want to talk about, we can have our marketing people write up a press release, we can leave there and the very fact that we had lunch becomes a press event. So, it raises awareness about Tampa Bay Tech. It’s very low key, it’s really just building a little bit of an ecosystem around software here.
The other thing that’s exciting is the Embarc Collective. I’m a fan – I’ve got my fingers crossed. I felt like Tampa Bay Wave and everything else being done over in St. Pete and here, we’re all so siloed and so territorial. It’s very disjointed here; you’ve got USF that doesn’t want to talk to UT that doesn’t want to talk to the Wave. That’s not doing our community any good.
I’m hoping that Embarc will be a tech hub that brings these competing things together to be less competitive. I think we have a lot more promise than we’ve shown so far here in the tech community. We have to commit to technology and not just in furthering political careers or getting press events.
The other thing I’ll say about the area is that Florida Polytechnic University is the best thing that ever happened to the tech world in Tampa. USF had no interest in software until, all of a sudden, they had some competition. We were frustrated with 20 years of trying to talk to USF. Not that we haven’t hired good coders out of USF, but they just were so focused on hardware and EE and medical that they just didn’t have any emphasis on the computer science software side. And Florida Poly, they’re just pumping out great software engineers. We have anywhere between 6 and 12 interns from there just about any month of the year. We’ve hired 3 or 4 of them. I am really a huge fan. Accusoft donates to them, because I believe it’s good to have our own talent pool being propped up by a good STEM here in the Bay area.
Matt: Wonderful. One of the questions that we love asking everyone is ‘who is a person or an organization that you think is doing something right and innovative in the area outside of Accusoft and why?’ Would you say that that Florida Poly is probably one of the cooler ones, or does anybody else come to mind as well?
Jack: Right now, I’m just so excited about our relationship with Florida Poly and what they’re doing out there. I’m also really excited about the CEO group, because I’m meeting some of these guys for the first time, and I think they’re all really special guys. They’ve got really special companies, like Haneke Design, Dobler Consulting, Geographic Solutions. Geographic Solutions is probably the largest of the group – I think they’re several hundred employees. AgileThought is not on there, but I believe they will be soon.
Jack: I’m really impressed with these guys.
Roxanne: We agree with you there! I wanted to know what’s the most difficult situation you’ve had to deal with in your career, and how has it helped you grow?
Jack: Well one thing is if you’re not growing, there’s something wrong. And I tell this to people, you’ll need to learn every day.
I think the more difficult a situation, or more impactful a situation, there’s more to learn from, right? You can either make it a bad thing or you can learn from it. I think the most difficult things I have faced in my business career as an entrepreneur, as an owner of a business, has been when partnerships have gone sour. When there are disagreements amongst owners, that destroys companies.
Trying to say to people that you like, you worked with, you’ve sweat with, you’ve cried with, you’ve done a lot of things with, you’ve built things with, saying, “Hey, it’s time for us to split,” that’s just really hard. It’s always hard to fire anybody, but somebody that’s been with you a long time, at the partnership level, the director level? Lawyers typically have to get involved. All kinds of negotiation – it’s so distracting and so distasteful, that’s been probably the worst thing I’ve gone through.
I think what you learn is to be more careful about who you do business with. You learn ultimately that money’s not the most important asset somebody can bring to you, that you have to be a cultural fit. You have to associate with people that believe what you believe. It took me a while because when you’re starving for cash and somebody wants to write you a check, you’re willing to maybe overlook some things – and I think maybe it’s because we’re financially better off or maybe it’s because I’m wiser (I hope it’s the latter), I have learned that it is important to be on the same page. Culture is something I know a lot about now, that hiring any employee needs to be a cultural fit before a skillset.
Roxanne: Onto the last question then, are there any further thoughts or insights you’d like to share? Anything exciting coming down the pipeline for you or for Accusoft?
Jack: Our new workload product is all cloud-based. It will do just about anything in the world you want to do with a form, document, workflow, e-fill, e-sign, etc. It’s brilliant technology, and once we’re able to sell it, we’ll continue to transform into more of a SaaS-based document content company. Watching that is interesting, and because of that, we’re also keeping an eye out for new acquisitions in that space. So, that may be coming down the pipeline too if we get lucky!
Accusoft is a software development company specializing in content processing, conversion, and automation. Their APIs, software development kits (SDKs), and SaaS tools are built using patented technology, providing high performance document viewing, advanced search, image compression, conversion, barcode recognition, OCR, and other image processing tools for use in application and web development.
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