Vector Graphic finds a niche
Six years ago, the fondest hope of Carole Ely and Lore Harp was to escape the bored-housewives trap and do something really bold like, say, opening a travel agency. When Lore's husband Bob, a scientist at Hughes Research Laboratories in Malibu, Calif., suggested that they think big and take a plunge into computers instead, they responded with what amounted to uncomprehending stares. Neither knew the first thing about the exotic world of computers.
Today the two women are acknowledged leaders in the fast-tracking field of microcomputers, and their six-year-old company, Vector Graphic Inc., stands out as one of the industry's wilder success stories. By offering a line of desktop computers more powerful than most personal computers but less costly than the larger machines that are usually sold to small businesses, the company has carved out a market niche largely overlooked by other competitors. Sales have zoomed from $404,000 in 1977 to $25 million last year, and more than 12,000 Vector Graphic systems have been installed around the country at retail prices ranging from $4,000 to $25,000.
Harp and Ely's education in computers actually began when Bob Harp, a onetime engineer at the California Institute of Technology and an inveterate high-tech tinkerer on weekends, proposed that the two try to market a memory board, which stores information, that he had designed in his spare time. With $6,000 they bought inventory and printing materials and started assembling the boards in the Harp home. Styrofoam packing materials were stored in a downstairs shower; the dining room became a testing area.
Success led the group into an even bolder venture: assembling entire desktop computers. Today that work takes place in 120,000 sq. ft. of leased office and manufacturing space in Thousand Oaks, Calif., and involves 400 people who design, assemble and sell eight microcomputer models. All involved with the startup have become millionaires: together the founding trio owns more than half of Vector Graphic stock, worth around $29 million at last week's over-the-counter close of $9.75 a share.
The group has avoided the mistakes of other young computer companies. From the start it relied on the advice of accountants and demanded payment from customers in cash. Rather than marketing its wares through catalogues and mail-order houses, the firm courted well-established dealers like Computerland, a coast-to-coast retailing network for personal and small-business computers. To assure reliable servicing, Vector worked out a deal with TRW, a Cleveland-based aerospace and electronics conglomerate.
Though the feisty young company so far shows no signs of stumbling, corporate success has claimed two casualties: the Harp and Ely marriages. Says Bob of his separation from Lore last year: "It was an ego conflict. She wanted to do things one way; I wanted to do them another." Says Carole Ely: "I was running away from a marriage into a company."