From Trash To Cash, Or, Just Phone My Computer

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Gordon Matthews is a tall, trim Texan with eclectic tastes -- fine wine, classical music, and the Dallas Cowboys. An inventor and entrepreneur, he has been described as "a technical Renaissance man." One day in 1978, however, he found himself up to his neck in trash.

At the time, he was senior vice-president of Action Communications Systems -- a company he had founded -- and he was visiting a plant owned by one of his customers, Johns-Manville Corp. (now called Manville Corp.). "I spotted a trash bin, maybe 10 feet long, 3 feet wide, and 5 feet deep," he recalls. "It was full of memos and letters. I don't normally go through trash bins, but I did that day." Each piece of paper, he realized, had cost Johns-Manville about $8. Then, after performing its function, the scrap had Promptly been thrown away.

As he stood there amid the trash, he he was struck by the waste and inefficiency of most methods of corporate communication, especially telephone calls. "I was never able to reach people when I needed them," he says. "I thought, if I could design a computer that you could call from any telephone in the world, at any time, and send voice messages to anyone you wanted to . . . that would be a neat system."

Matthews ran home to his wife and announced that he had invented a new industry.

Now, five years later, voice messaging -- also known as electronic voice mail -- accounts for sales of some $20 million to $30 million per year, with analysts predicting a $1-billion market before the end of the decade. The leader in the field is VMX Inc. (the letters stand for voice message exchange), headed by Gordon Matthews. Although he finds himself competing with the likes of IBM, Wang Laboratories, and Rolm, VMX still controls the lion's share of the action -- 70% by some estimates.

Meanwhile, all kinds of companies have been discovering that voice messaging can save them time and money. As is generally the case with new office automation, major corporations including 3M, Corning Glass Works, American Express, and Westinghouse Electric, were the first to benefit. Lately, however, smaller businesses have begun using voice messaging as well. Some have set up their own in-house systems; examples include Bain & Co., management consultants; and Infotron Systems Corp., a data-communications company. In addition, service bureaus are springing up in cities from Atlanta to Los Angeles, allowing other small businesses -- such as Chicago Tube & Iron Co. (see sidebar, page 45) -- to take advantage of voice messaging without having to shoulder the hardware costs which average about $300,000 Billings for the VMX Service Bureau in Dallas catapulted from $25,000 per month in January 1982, to $350,000 per month a year later. "he market's beginning to take off," observes Paris Burstyn, senior analyst with The Yankee Group.

Voice messaging works by transforming a computer into what is, in effect, the cleverest and most versatile answering machine imaginable. By dialing a special number, a caller can leave a message up to three minutes in length for any other person on the system: the caller's voice, digitally recorded by the computer, can retrieved by the recipient at any time. Using a variety of touch-tone instructions, callers or recipients can get messages to do everything short of turning cartwheels. The computer can be directed to deliver the message at a given time, date, and place (". . . To Mr. Jones at his Los Angeles office, on Wednesday at 1 p.m. . . ."), or to alert an entire department (". . . For everyone in sales . . ."). A message can be edited, added on to, and rerouted (". . . Bob, I thought you might want to hear what Bernie had to say about the ROI . ."). Like a taped message, an electronic voice message can be run in reverse, stopped, saved, or erased.

The advantages are enormous. Communication takes place the first time, every time. Unlike electronic mail, which requires keyboards and modems, all you need is a telephone. Time zone differences become irrelevant. (One multinational uses voice messaging to deliver its New York-generated telephone correspondence to its San Francisco office after 11 p.m., minimizing long-distance charges.) A call-answering option allows outsiders -- a company's customers, for example -- to leave messages (but not to retrieve them). What is more, the entire system is simple, unthreatening, and unobtrusive.

The disadvantages are minimal, according to people who use voice messaging. Messages cannot (as yet) be indexed, which would make scanning them easier, and there is no hard-copy printout.

John Hynes, project manager of telemarketing development for HoffmannLaRoche, the pharmaceutical giant, pays voice messaging the supreme compliment: He does not talk about it. He believes that the less his competitors know, the better. LaRoche initiated a pilot program three years ago, signing up with a service bureau, but quickly made the transition to an in-house system. The company now uses voice messaging as "the primary line of communication" for its 1,800 employees, 80% of them in sales. "The overall productivity on the part of the people has increased," Hynes observes cryptically, declining to reveal the specific figures. (Matthews of VMX says that LaRoche's written and telephone communication decreased quite substantially.)

Smaller companies find the system no less appealing, although most remain with a service bureau for economic reasons. (VMX assesses a $50 hookup fee, plus a basic $25 per-month, per-user charge.) Says an account executive with a public relations firm, "We're a service industry, but I can go out of town, and my clients won't even know that I'm not around . . . which is great." She adds that, when she had trouble selling her home, she gave her realtor an electronic "mailbox" to take calls from buyers. The house was soon sold.

Barely a day goes by it seems that someone does not discover something new to do with voice messaging. The 1984 Los Angeles Olympic Organizing Committee, for example, will be using an IBM system in the Olympic villages in Los Angeles. When Vladimir Salnikov's father calls to congratulate his son on the outcome of the 800-meter swim, he may well wind up talking to a computer -- one, moreover, that speaks fluent Russian and several other languages, and thus can tell him exactly how to leave his message.

All of which is fine with Gordon Matthews. VMX now has nearly 100 employees, with expected sales of about $8 million this year, and Matthews is not blind to possibilities of taking his company public. But he still keeps an eye open fo promising trash bins.