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25 Years to Overnight Success
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Business New Haven
8/19/2002
By: BNH
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Advanced Office Systems of Branford is celebrating its 25th anniversary this year - an eternity in the technology business. BNH spoke with Richard Squeglia, one of the company's founders, about how the company - and the marketplace - have evolved.
How did you start the company, and when?
The company was started in 1977. Back then there were no PCs; what our core business at that time was fixing the famous IBM Selectric Typewriter. Back in 1959-60 IBM invented the famous typewriter with the little bouncing ball. In the early days we were unable to sell their product. We were one of the very few that learned how to fix these units and went out going door-to-door telling people we could do the same job that IBM was doing at 60 to 65 percent of the cost.
Only IBM could sell them at that time?
In the early days we could only sell service; that was the model for the first two or three years. That's why service has been ingrained in our head. For the first five or six years of the company, even though we went on to sell products, service was nearly all we did.
What got you into it in the first place?
My partner, Ron Rapachello, worked for IBM at the time. We realized we could do this on our own. It was started in Branford on April 1, 1977.
What was the first big change in your business?
We were one of the first dealers to get into electronic typewriters. In the early 1980s we became an authorized Olivetti electronic typewriter dealer. We took on the line and started selling typewriters as a secondary source of revenue. It was a very difficult start, convincing people [the electronic typewriters] were better and had more features then the IBM Selectric. It was very difficult selling against IBM. We had to work ten times as hard as the [IBM] guys. At that point IBM had probably 90 percent of the typewriter market share in the world.
When did things start to open up for your business and in general?
We started talking to Apple Computer in the late 1970s. We started looking into this thing called the personal computer. At the time there were two brands out there: One was called Atari and [the other] Apple. In the end we went with Apple. It took years before we [had] great success selling Apple.
The first computers were the Apple II with 8K of memory and a cassette drive for a disk drive. The original didn't even have a floppy drive.
What was the market for the product?
That's a good question. In the very early days it was mainly people that used a computer for a hobby, rather than business. There were two programs that ran: VisiCalc and Supertext. VisiCalc was pretty early - it was a spreadsheet but no one really knew how to handle it. In the early days we didn't do a good job selling to businesses because businesses didn't know how they would work and they were very expensive. Even the early Apple II was upwards of $3,000.
For the most part the retail store was an Apple requirement, so we relocated onto Route 1 in Branford. We had electronic typewriters on display and Apple computers. At that point we could do a demo at your location or you could come into our location.
Was there a specific point when you realized you were going to make it?
When we finally realized we were moving forward is when Apple finally came out with a little better machine, the Apple II+. It had a little floppy drive with a 143K of storage space and had 16K of memory. We took one of the Olivetti typewriters to an Apple computer with a word-processing program. We were able to sell you a typewriter for your basic typewriter needs and a computer to do word-processing.
When did Apple take off?
In the early days there were no IBM PCs. In the first year or two we sold Apples somewhat successfully. But we were not making much money selling Apples. In any given month, if we sold two, it was a lot. It started moving by 1983 or '84 when they had the Apple IIE. One Christmas we sold 12 computers, the following year we sold 184 full computer systems. We thought the 12 were astronomical, the following year it went to 184 systems. That was the kind of growth we saw.
Describe the business today.
Today we have 48 employees. Out of our total sales, about 20 to 30 percent is [in] services - a lot of hardware, software, peripherals, routers, networks, etc. We never would have guessed that people would have [installed] a computer system in place of every typewriter. With mid-management and higher people, we all have computers; in the previous days the mid-level didn't even have typewriters. One of the key things as we started selling computers was that we took the concept of on-site service into that. Mail-order and the direct selling companies have been there for many years. We've been through what we call the 'typewriter wars'; we've seen a lot of the big chains come and go. We've seen a lot of the big mail houses come and go. Everyone has hurt us from time to time. Many years we've sat here feeling the pain re-inventing ourselves. The one thing the direct-order model could never satisfy is, you buy a PC from any kind of mail order, then when you really have a problem or questions you want someone local you can depend on.
That's how we combat that, [but] the direct model has not been easy for us. Our customer base really depends on the total solution. If you're just a big company looking at the bottom line and you have your own IT people, you don't care about anything but, 'Give us the best price.' That's not our model customer. Our model customer is someone who expects service support.
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