In 1977 Sedlmayr had founded a company that maintained display screens for sporting arenas. Advertisers began asking if their images could be displayed at lower cost and higher resolution. Sedlmayr studied various technologies. It was the wand, though, made of random rows of light-transmitting fibers, that really got him thinking. What if he could order those random fibers, make them "behave," as he put it? The result would be, he believed, a fiber-optic screen that could display a bright, undistorted, or coherent image.
Sedlmayr's quest led to the U.S. Patent Office, where he turned up two interesting-looking patents -- assigned to a William E. Glenn. Sedlmayr visited Glenn at his lab in Dania, Fla., in the fall of 1983, and the two men discussed the inventor's patents. Glenn says of Sedlmayr's visit, "I showed him the screens and described a way to make them. He said he was interested in licensing and would get back to me. That was the last I heard from him."
In September 1983 Sedlmayr sold his company. With money from the sale, he started Advance Display Technologies. His search, like that of others before him, was for a way to mass-produce fiber-optic display screens. No one, as yet, had done it. People had built screens by hand, but the task was unbelievably labor intensive. The only way these screens could ever become commercially viable, the only way this technology might one day make HDTV feasible, was if someone could automate the assembly process.
On March 5, 1986, ADTI raised $4.5 million in an initial public offering. This followed $1 million of capital the company had already raised privately. That money was soon consumed by Sedlmayr's many experiments, causing unease among his backers. Jeff Robinson, a major investor in ADTI, describes Steve Sedlmayr as "bizarre" and "a little goofy." He adds, "He's not a businessman."
At 16 Sedlmayr had won a National Science Foundation grant for arctic and alpine research and related solar studies. Sedlmayr went on to the Colorado School of Mines, where Fs and incompletes littered his transcript. "Knowledge was more important to me than grades," he says. By the age of 22 he was working on theoretical math and space-flight mechanics problems for Martin Marietta Corp.
Steve Sedlmayr is a nocturnal creature, given to turning up at the office late at night and working until dawn. He also has a weakness for electronic tools and gadgets. One former employee recalls him leaving the office late one day and returning a couple of hours later with $15,000 worth of personal-computer equipment. ADTI spent $1 million developing a laser as a light source for its screens. Its shop sported such exotica as a $50,000 diamond-bladed saw.
Ironically, one such binge proved fortunate. In late 1985 ADTI placed an order for plastic fiber with Mitsubishi Rayon. The order, six times larger than any other the company had received, aroused Mitsubishi's curiosity. It asked ADTI what it needed all that fiber for. Sedlmayr replied that that was ADTI's business. Mitsubishi persisted, eager for a glimpse of the young company's inner workings. Sedlmayr finally relented, charging Mitsubishi $500,000 just for the right to negotiate with ADTI. Mitsubishi paid.
That pricey overture led to a licensing agreement signed on December 31, 1986. ADTI received $5 million from Mitsubishi. Mitsubishi, it appeared, gained access to a valuable American technology of the twenty-first century. The price seemed a steal.
But even Mitsubishi's largess couldn't keep Steve Sedlmayr in lasers and diamond-bladed saws. By mid-1987 ADTI was laying people off and scratching around for cash. ADTI's Denver underwriter, R. B. Marich Inc., knew of a young entrepreneur who had experience in fiber optics. Kingstone says, "They came to me and said, 'Brett, why don't you take a look at this company as a possible turnaround?' "
When Kingstone arrived at ADTI on a December day in 1987, his impressions of a top-heavy company were affirmed. ADTI, with its marbled lobby and overstuffed boardroom, struck him as a free-spending outfit. The product it was working on, though, tempered his response. "They did seem to have an interesting technology," Kingstone muses.
Sedlmayr claims Kingstone reacted differently. "He flipped out over the technology. He said, 'Congratulations. You've done it. You've got it.' " Kingstone, like Sedlmayr, had built screens by hand when he was at Stanford. But what Sedlmayr had was a fiber-optic display screen built by machine -- not by hand.
Kingstone offered his services in various forms to Sedlmayr. He offered to sell him his contact list for $10,000. He offered to consult for the company -- at $10,000 a month. (At that rate he would have been making more than Sedlmayr.) He offered to sell screens for ADTI on commission, but appropriate terms could not be reached. Kingstone then offered to help Sedlmayr raise more capital. Recalls Sedlmayr, "I had been meeting with a lot of people who said they could raise money for us. None of them came through. At the time he just looked like another guy. I didn't put a lot of credence in what he said."
Brett Kingstone grew up in Long Beach, on Long Island, N.Y., where his father owned a mattress company. To educate his son, Kingstone's father sent him out on deliveries through the roughest neighborhoods. His mother hated that. "She wanted to read Hans Christian Andersen to me," Kingstone remembers. "My father said, 'Fairy tales? I want him to learn about the real world.' My mother wanted me to have culture." On weekends she took her son to the Metropolitan Museum of Art. During the week the boy was back on the mattress truck, heading through Bedford Stuyvesant, Harlem, and the South Bronx.
Kingstone's parents ultimately divorced. That devastated his father, which led, Kingstone believes, to his premature death when Kingstone was only 17. "I think he had a premonition that he was going to die early. So he raised me as tough as he could. 'Brett, I'm preparing you for life. I'm preparing you to be self-sufficient.' "
The search for a surrogate father began at Stanford, where Kingstone sought out Nobel Prize-winning economist Milton Friedman, who wrote a glowing blurb for the dust jacket of Kingstone's book. Also at Stanford, Kingstone met Philip Rollhaus, the chairman of Quixote Corp., a Chicago-based miniconglomerate, who told the fledgling entrepreneur that maybe one day they could do business together.
