Pulse Data's Focus on Innovation

Extracted from the August/September edition of Trademark Magazine with the permission of AGM Publishing Ltd.

When Microsoft chief Bill Gates sought out Pulse Data International at a United States trade fair in 2000 it was obvious the Christchurch company specializing in technology products for the blind and visually impaired was one to watch.

Gates' visit came during a period of phenomenal growth for Pulse Data, with annual turnover - more than 90% of which is generated from exports - increasing 76% in the year to September 2001 to $40 million, international marketing manager Greg Thompson says.

"There were two main drivers behind that growth - expansion of distribution networks and the launch of BrailleNote, a portable electronic personal data assistant for the blind."

Integrating voice and Braille technology, BrailleNote gives users access to mainstream technology, enabling them to communicate easily with sighted people. In the two years since its launch sales have grown so rapidly it now accounts for 50% of Pulse Data's annual turnover.

Aiming High

Pulse data's target audience is the 2% of the world's population that is blind or severely visually impaired.

Thompson says while the company isn't the biggest revenue generator in the industry, it is the most profitable and has an international reputation for being the most innovative. Now it aims to be the worlds number one supplier in revenue terms by the end of 2003.

Its origins date back to 1976 when Dr Russell Smith founded a company to commercialise technology he and another electrical engineer had developed at Canterbury University. The company was a division of multi-national Womald International and designed, manufactured and exported products for the blind and visually impaired for 12 years.

In 1998 Smith led a management buy-out, renamed the company Pulse Data International and became chief executive officer, a position he still retains.

Ownership has been kept within a team of staff, former staff and friends, but last year rapid growth and expansion plans paved the way for a local company to buy in. A public share listing is now planned for next year.

"In the past few years growth has rocketed and it's getting to the point where to maintain that momentum, and fund the expansion plans we've got on the table, we need capital. The public listing will also mean that staff who are retired or near retirement have a better vehicle on which to trade their shares", Thompson says.

Product Innovation

Pulse Data's products, including video magnifiers - the main earner in the 90s - aim to improve the quality of life of visually impaired and blind people, helping them become more independent.

During the mid-1980s Pulse Data developed Keynote Speech, a product used in what it believes was the world's first talking computer. Thompson says it was a hugely successful piece of software and has now been incorporated into BrailleNote.

Launched in 2000, BrailleNote is similar in function to a laptop or palmtop computer, however it offers blind users a synthesized voice output and the capability to read information via dynamic pop-up Braille display cells.

Thompson says it's the world's first electronic notetaker for the blind using the Microsoft Windows CE operating system so it can interface easily with Windows-based applications such as Microsoft Word. Users thus have easy access to email, the internet, word processing and other applications.

Thompson says BrailleNote generated an immediate and hugely positive response from blind people of all ages.

A programme of continuous enhancement includes translations into other languages and a global positioning satellite (GPS) option, giving blind people much greater travel independence.

"The GPS option has generated an enormous amount of publicity for Pulse Data worldwide," says Thompson. "It's an example where being innovative doesn't have to mean rocket science. BrailleNote existed, GPS existed, essentially we pulled them together. That's being innovative without having to design a whole new product".

Profitable Relationships

A spin-off from the success of BrailleNote has been the relationship Pulse Data has formed with Microsoft. Thompson says during development of the product Pulse Data contacted Microsoft's Assistive Technology Group in the U.S. to tell them what it was doing.

"From there it got to Bill Gates that a New Zealand company was using Microsoft's operating system on a notetaker for blind people, and was the first in the world to do that."

"He was very interested and was keen to look at what we were doing. He made a point of spending time with Pulse Data at a trade show in the US in 2000. We've enjoyed fantastic leverage off that and immense credibility in the market from our ongoing association with Microsoft."

Thompson says the two companies now have a strategic partnership and are working together on some new technology.

Pulse Data sells its products to more than 30 countries, including North America, Europe and Australia. Target markets are often those that provide assistance and infrastructure support for the blind and visually impaired.

"In each region we've developed close working relationships with larger institutions tasked with finding products to assist people who are blind or have low vision - the equivalent of our own Royal New Zealand Foundation for the Blind. These institutions and their influence have been fundamental in creating awareness and demand for our products."

The company operates a network of independent distributors, supported by sales offices in key export markets. Last year it acquired two US distributors, merging them with its US operation to form Pulse Data Humanware.

Thompson says these and further acquisitions will ensure distribution channels are increased and products are presented to a wider customer base.

He says a key to Pulse Data's success is that it listens very closely to its end -users. This included establishing an internet list group for BrailleNote users to discuss the product. "We monitor the emails and rely on that feedback to see what our users really think about our products, and what additional features they need. Innovation is no good on its own if you are developing clever things for people who don't want them."

Staying On Top

Pulse Data "ploughs significant money back into R&D" and keeps a close eye on its competitors.

"It takes commitment to stay ahead of the pack. We know when our competitors have new products coming out and we are ready to counter that. The challenge for us is to remain the most innovative company and keep at least one step ahead of the competition. That's pretty tough but it's an essential element of our success."

Thompson says the rising New Zealand dollar is also a challenge. While the company is well covered in the short-term by forward foreign exchange hedges, a long term gain would have a negative impact and, to retain its competitive position, it might have to settle for lower profitability.

That would be countered somewhat, he says, by the very positive market outlook for Pulse Data's products.

And with a rapidly aging and more technology-savvy population, Thompson says there is a new and largely untapped audience in the visually impaired market.

In terms of market expansion, the company is currently considering the options.

"We've been very careful about which markets we've chosen to date and are being very careful about future new markets - it's not a shotgun approach to exporting."

It has contracted Trade New Zealand to do Market Research in nine Asian countries and is also looking at South America.

A number of new projects are underway, including product launches planned for later this year. And while Thompson is playing it close to his chest, he says exciting times are ahead and there's potential for another "big leap forward" for Pulse Data.