The Wisdom of the Sages Interview Series
Interview with Jeff Hilliard, President, Compudigital Industries
By Tim Lindner
Have you ever met a Renaissance Man? Someone who evokes the creative genius of a Leonardo Da Vinci? Imagine a person, an owner of a security alarm company, with no training in biological sciences and laboratory techniques, designing and patenting a safer process to fuse cells. Think of someone that can take an Near Field Communications(NFC) chip, embed it into an LCD display while embedding a digital coupon into the commercials of an international skin care products company, so that you can wave an NFC-enabled smartphone over the ad running on the display to get that digital coupon deposited into your digital wallet. A man with a restless mind making successful business from opportunities not readily apparent to the rest of us.
Well, such a Renaissance Man exists, and he is Jeff Hilliard, the President of Compudigital Industries, located in Rocklin, CA. He is also a Board Member of the American Heart Association.
He’s a Renaissance Man with an iconic style, characterized by the neon-colored footwear that sets him off at every business meeting he attends.
Hilliard’s career has paralleled the development of modern electronics, from the early days of “build it yourself hobby” computers to the brave new world of connected devices and the applications they run. His ability to see things differently and his agility in moving quickly to develop devices and services before the accepted paradigm changes has made him a brilliant success story, one young entrepreneurs could do well emulating.
Hilliard is the holder of three patents, two of which relate to improvements in cell fusion techniques (4,695,547and 4,882,281), and one that helped changed the way restaurants do business (5,272,474).
Connected World’s Tim Lindner had to strap on his not so iconic running shoes to catch up with Hilliard for this interview. Tim is still trying to recover.
CW:Jeff, thank you for taking time from your very busy schedule to talk with us. You have certainly taken a varied and interesting path through your career in business.
JH:I have been the recipient of some amazing things during my life, things that most people will never see. Changes in technology, lifestyles, and the way lives are lived, Heart Disease and Cancer. It has been an amazing and wonderful ride!
CW:You are an inventor, innovator and entrepreneur all rolled into one, and you have been pushing the technology envelope for many years. This gives you a very unique vantage point to have observed the evolution of devices, from dumb to smart, and the applications that make smart devices such an integral part of our lives. Can you give us a broad overview of the technology changes you have seen in the past 50 years?
JH:When I was a youngster, my father was a ham radio operator. All of his equipment used vacuum tubes that glowed in the dark. Vacuum tubes were invented in 1907 and were still in heavy use in almost everything electronic in the early 60s. I became a licensed ham radio operator myself at 10 years old and that is where my wonderment all started. Between 10 and 15 years old, I blew more things up just to learn how things worked, more than most people will see in a lifetime.
With the advent of the transistor many years earlier by AT&T Bell Labs, I realized that the world of technology was opening up in front of my eyes. If I could dream it up, I could build it!
Then Integrated Circuits (ICs) were created at Texas Instruments around 1958, some containing hundreds and even thousands of transistors. And each IC had its own function. You could tie them together to create a product in very little space.
My horizons were expanded again beyond my imagination and I kept experimenting. The first microprocessor was introduced, the Intel 4004 in 1971. The IMSAI 8080 computer was the first computer I ever had which ran on the ever popular Intel 8080 processor, and programmed by machine language. Everyone in my sphere of influence was amazed and they all encouraged me to continue! My first real computer that had an operating system was my Commodore 64, released in August of 1982. Immediately after was the release of the IBM PC, and you know the rest of the story!
CW:You really were present at the creation of the infrastructure that made devices smart and able to be connected to each other. Was there a person, a mentor that had an influence on you along the way?
JH:Part of my technology journey was made in the company of a good friend, Ivan Corey. Ivan was an engineer with Aerojet who was directly involved in the development of the first computer, called ENIAC (Electrical Numerical Integrator and Calculator). Deployed in 1946, ENIAC contained 17,468 vacuum tubes, 7,200 crystal diodes, 1,500 relays, 70,000 resistors, 10,000 capacitorsand around 5 million hand-solderedjoints. It weighed more than 30tonsand was housed in a 1,800 square foot room. This computer is now at the Smithsonian Institute. Ivan shared with me all of his knowledge from his work with ENIAC, and later, his experiences developing rocket engines for the Space Shuttle.
My journey began trying to understand simple vacuum tubes, and now am in the realm of supercomputing power contained within a smart phone. I have lived through so many amazing advances in technology in a relatively short time span
CW:One of your lines of business has been excess and obsolete inventory liquidation services for manufacturing companies, particularly electronics. You’ve been very successful selling “last generation” products around the world. This brings up an interesting question. It seems that there is a spectrum of technology adoption, from early adopters of the latest and greatest devices to the folks who stick with a product long past its time in the mainstream. Why is this and can you give us an example of how old technology can be good enough for someone to use?
JH:I have always been one of the “early adopters”, with an intense desire to be on the cutting edge of technology, but I also realize that many are satisfied with the current technology they know and use. They could be put off by the cost of new technology or have an unwillingness to try something new because what they have works and is proven. Some of the “Old Timers” in amateur radio for example will not use a product unless in uses vacuum tubes that glow.
But consider this: RF Power Amplifiers that were developed in the ‘40s and used high power vacuum tubes were much tougher than some of the newer “solid state” products. Tube-powered amplifiers can withstand incredible abuses like “overdriving” and “Reflected power problems” without damage. Try that type of abuse with a solid state amplifier of today
and you can easily damage it beyond repair. Just because the most recent technology is newer, it certainly doesn’t mean it is better. Back in the old days, we built products that were tough and made to last. The focus of manufacturers today has changed drastically from “quality” to “quantity and profitability”.
Another example is the simple dishwasher installed in our home kitchens. The models from 15 years ago and older really cleaned dishes, and were made to last. In contrast, in the past 5 years I personally have gone through 4 new dishwashers from 4 different manufacturers. None of them clean dishes well because the focus has changed from “Quality” to “Green Operation & Mass Production”. Dishwashers today are made of plastic including the drive motors. The service departments are inundated with repair requests and problems. Advancing technology does not guarantee a better product. In fact, in many cases newer technology can be an assurance of a reduction in quality.
CW:You are not alone in your experience with dishwashers! Jeff, you have been an innovator in the early B2B and B2C use cases for Near Field Communication (NFC) technology. You even won an award for one of your devices. Tell us about this and why NFC has taken so long to take hold in the U.S.
JH:It has been a joy to be involved with NFC, a new technology that is certainly on the forefront but with a caveat.
I was involved in the development of a large LCD screen that allowed a potential buyer of a product to watch an advertisement (within a store for example) where a series of ads ran back to back. Potential shoppers were given an NFC card (like a credit card with an NFC chip embedded) that could be used to obtain coupons for advertised products. For example, as a shopper, I could be walking through a store and see and ad for a free soft drink with every $2.00 + purchase. If interested, I would simply hold my NFC card up to the LCD panel while the ad was playing and a coupon would be placed on my card for redemption at checkout. Now this doesn’t mean that the coupon was placed on a massive back-end system, it was actual placed on the card. This alleviated the need for any “high overhead” back-end systems and simply placed the encrypted coupon on my card. At check-out, the shopper simply waved the card over a reader at the Point of Sale (POS) device and the coupons were discovered and deducted the from the card.
NFC chips are so small that they can be embedded in toys, drink cups, tiny labels or many other forms. We created NFC chip-based “Super Hero” action figurines that could be handed out as shopping awards that had pre-loaded coupons associated with product tie ins to the character. As the shopper checked out, the coupons redeemed were removed from the Super Hero.
Just think of the implications of this technology! Recently, you are hearing about solutions like the addition of “Apple Pay” in many retail outlets.
But the caveat to which I alluded earlier is the lack of standards. When I was involved in NFC development, there were only a couple of manufacturers of NFC chips and technologies and they had no ability to talk to each other. This is changing today. Standardization of new technologies is mandatory for a successful launches. Adoption of standards allows easier cross-platform development and more rapid development to deployment timeframes.
CW:Your patented restaurant seating computer application was an example of the shift in component technology during the evolution of the product’s development. Tell us about that.
JH:Many years ago, I developed a product called the Intelli-Host, the first restaurant seating management system. This was a cutting edge product that came out of my frustration of trying to be seated at a Sunday brunch with my family. I saw empty tables all over the restaurant but the restaurant management was quoting a 1-2 hour wait time. I created the first systems that were installed in the Hilton Hotel in San Francisco and at 5 restaurants in Euro Disneyland in 1992.
The systems were hardware based with an internal proprietary processor and its own operating system. It had a slide-in layout of the facility and multi colored LEDs to indicate the status of tables as being available, busy, or needing cleanup. The system worked very well in balancing table occupation and for turning tables fast and more efficiently. But I quickly realized that to continue to be successful, I had to engage with the newer technology and utilize the incredible capability of the personal computer. Then, the user could see a screen image representing the restaurant where we can see instantly what the table status was because the actual tables on the screen turned different colors as table status was updated. You could see status changes in “real time”.
CW:What applications have you launched?
JH:I created an app that would easily synchronize a PowerPoint presentation with an iPhone or iPad, a terrific idea but one that was superseded when Apple used the same concept on later releases of their IOS system, called the Apple Presenter. I created an app for people to be able to sign messages for soldiers online so we could insert those messages in Bibles before we shipped them to the military for distribution. I learned a lot through this process but in the future, I think it might be more appropriate to focus on apps that resolve a problem for either a product I create, or have Compudigital act as a Service Provider to a larger company to resolve an issue around their use of smartphone technology.
CW:How did you come up with the name of your company?
JH:Compudigital Industries came as a result of my unintentional infringement on another trademarked name. Because our company was focused on computer based products, many using graphical interfaces, I had decided to call the company Compugraphics. Soon after an article was published referencing this name in a national magazine, I received a “Cease and Desist” letter from the rightful owner. After contacting my attorney for advice, I quickly apologized and changed the name to Compudigital Industries. Realizing that Compudigital was a moving target, changing our focus based on the broad technology needs of our customers, it made more sense to broaden the scope of the name. It was a good move and has served us well since 1985.
CW: Your company has changed its focus many times in your history. What are the benefits and/or drawbacks of these continual changes?
JH:Technology and needs of larger companies have been the driver for the changes in direction for Compudigital since 1985. I discovered that the continual changing of our company’s direction was not only a novel idea, but was why we survived. Back in the late ‘80’s, this subject concerned me a lot. As continual changes happen in technology and the marketplace, should our company focus on those changes? Larger companies must stay the course and focus on their strengths. But smaller companies like Compudigital have to remain agile in order to quickly respond to the needs of companies that just don’t want to deal with processes apart from their core competencies.
Here is an example. We became a provider services that absorbed, refurbished and sold excess electronic product inventory. We got into this because one of our largest customers, a major PC and server manufacturer, asked us to provide this service, something we had never done. Handling the liquidation of excess and obsolete inventory was not a core competency for them. As a result of responding to their “temporary” need, Compudigital became their North American processing center for image scanners and we became known as “Scannerville”.
These continual changes in direction are what has allowed Compudigital to thrive. As the needs of large companies change, they become amazing opportunities for smaller companies like Compudigital. I would highly recommend that smaller service providers consider looking at larger company “pain points” as a source of new business opportunities.
CW: You were granted two patents related to genetics. How did this happen?
JH:From 1976 through 1985, we owned a security alarm company in Davis, California. One of our customers was a genetic research and development company called Calgene, a company started by professors at UC Davis. In taking with some of the brilliant scientists that worked there, I realized that the technology that they were using to fuse genetic cells was not only inefficient, but dangerous. Its stability was not predictable and had the potential to harm or kill the user. I immediately went to work on a much more repeatable and safer way to accomplish this task.
The process involved applying a high voltage pulse to cells from 2 different types of plants in the same container (genetic fusion). This technology was used to create the first seedless watermelons by crossing the tomato and a watermelon. To do this safely, I created a new product which I called the “Protoblaster”, a highly accurate and very high power pulse generator that worked flawlessly. The Protoblaster had the ability to produce extremely high power pulses for a very short time in order to effectively transform genetic cells. The product was later purchased by Hoefer Scientific Instruments in San Francisco and renamed to “Progenetor”. The Progenetor was used to create the “Flavor Saver” tomato, a tomato that contained 10% less water for making tomato paste, “Roundup proof tobacco”, a tobacco plant that was resistant to the herbicide “Roundup” so that crops could be dusted to kill all of the weeds instead of using labor, and of course, the famous “Seedless watermelon”
I knew nothing about genetics but working with some brilliant scientists and using a little imagination, was able to play very small part in changing plant genetics technology.
CW:Who is Jeff Hilliard and why did you decide to become an entrepreneur?
JH:I have been a highly motivated guy for a long time. My father was a highly motivated insurance salesman with four boys and a very understanding wife. It kept him continually on his game, having to keep up with raising and providing for all of us. Every morning, he would come into our room at about 5 AM and declare: “Well boys…The world is on fire! What are you going to do about it?” This can ruin a good sleep but out of boredom, I used much of my early morning time to sit, think and create.
Today, 50+ years later, still I get up somewhere between 4am and 5am and am in the office very early. Most of my best work happens either in the middle of the night or early morning. I love electronics and challenges. I love it when I see a need, and know beyond any doubt that I can resolve that problem. I thrive on new technologies and have a deep desire to be the first to use it. Many times, Fortune 100 companies contact me with an issue that they cannot easily solve. And in every case, I have found an answer. It just takes a love for what you do, some limited knowledge, and an unstoppable drive. A desire to hit the “Home Run” every time.
CW:Where do you see Compudigital 12 months from now?
JH:Compudigital has had a couple of very stable product offerings over the years that still continue today. As a provider of creative software authoring services for two Fortune 100 companies since 2001, we are blessed to have a steady stream of income.
The recent turnaround in the economy along with a new surge in research and development is causing production levels to increase along with the excess inventory that goes along with that process. I see Compudigital continuing the sales of excess and obsolete inventories to the secondary markets but as our long history dictates, will be watching for other opportunities like the expansion of NFC and standardization of technologies.
CW:Jeff, thank you again for sharing such an interesting story with us. Best wishes for success and we hope to catch up with you a year from now.