* * *
It fell to Arthur Gingrande to open up the market in the spring of 1989. "We figured that if I showed this to enough end users we'd find out where the demand was," he recalls. "We wanted to let the market tell us what we ought to sell. Then we'd react. It was a case of dynamic positioning."
The company had no precise list of who would want Inscript and in what order. "There was no market research available on this," says Gingrande. It did, however, foresee seven large markets into which it could sell: banking, insurance, sales ordering, credit card companies, mutual funds, the U.S. Postal Service, and the Internal Revenue Service. Getting a foothold in these big industries seemed impossible, given that Neurogen was little more than three guys in a second-story walk-up office.
As Neurogen set about getting into the market, it imagined that the banking industry would offer the "the quickest entry point," for two reasons. First, banks had the necessary volume. They process checks by the carload. Volume translates into huge labor costs. Neurogen could clearly save banks a lot of money.
Second, the banks by dint of their size and needs also had another critical characteristic. They had invested in the necessary "enabling" computer technology that Inscript needed in order to integrate into the banks' systems.
Yet for all that recommended the banks to Neurogen, they lacked a certain intangible -- the willingness to take a risk. Recalls Gingrande: "They would say, 'IBM is already taking care of this for us,' or 'Banctec already has the problem well in hand.' I'm not sure they really understood what we had."
Undeterred, Neurogen shifted its focus. It pitched those banks' vendors, the systems integrators and value-added resellers that sold computer solutions to the banks. "They were all interested in our technology," says Kuperstein, "primarily to see how far along we were. And by the nature of the questions they asked us we could deduce how far along they were." The answer, Kuperstein believed, was not far.
Neurogen then went back to the banks to put pressure on them through their vendors. "We told them we could deliver what they wanted today," says Gingrande. This time the banks, with their vendors' endorsement of Neurogen, took notice. Their interest was further piqued by a very favorable review of Inscript in a leading industry newsletter that had appeared in the interim.
But then a technical problem intervened, one that Neurogen had yet to allocate much of its scarce resources toward solving. When people write a dollar amount on a check they often crowd the numbers. They fear that someone else might insert an additional digit. On checks, many handwritten numbers touch. In the jargon of the pattern-recognition business, they are "unsegmented." No machine has yet been able to pull two overlapping numbers apart and identify each of them fast enough to satisfy customers. "We were really naïve," recalls Gingrande. This rude discovery confronted Neurogen with a hard choice. It could plow its limited resources into solving the overlapping character problem, and thereby crack the primary and hugely promising check processing market. But doing so meant neglecting other, more accessible markets. The alternative was to develop other markets and put banking on the back burner until the company had more resources at hand.
That's what Neurogen did.
* * *
"It took us a long time to find out a simple fact," says Arthur Gingrande. "The attitude a person has about a form determines how legibly he will write on it." The banking experience got the founders at Neurogen to debating a now obvious question: if check writers were paranoid, then who, when it came to writing numbers on a form, was not?
The answer came at an electronic imaging trade show in October 1989 when Neurogen and a large sales-order entry company -- which was looking for a faster way to process its forms -- bumped into each other.
When Kuperstein, Gingrande, and Fisher studied the sales-order forms, they liked what they saw. The forms had a separate box for each character. The numbers had to be segmented. They realized that salespeople had the opposite motivation of check writers. They need to write clearly so the order gets entered correctly and they get paid a commission.
In the order-entry company, Neurogen had a live contact. A development contract between the two companies resulted. Neurogen, in return for a fee, would try to customize Inscript so it would integrate with the larger company's technology. In the course of the work, a potentially lucrative secondary market opened up for Neurogen.
Neurogen's partner in the form-reading effort, it turned out, also printed and corrected standardized tests. With Neurogen's help, it could redesign the answer form -- and potentially remake the standardized test industry. It made little sense to have rows of five small spaces arrayed across the page, with the student marking just one. If a system that could read a handwritten number was available, it would be simpler to have the student write one of five numbers in just one space. This would save paper. It would also diminish every student's nightmare: recording a page full of wrong answers by improperly aligning questions and answers.
* * *
Banks had seemed a hot market and had not immediately panned out. Sales order-form processing was down the list and standardized tests scarcely conceived of in Neurogen's first business plan; yet those markets suddenly seemed full of promise. The U.S. Postal Service, meanwhile, fell somewhere in between.
