Reading the Market : Superscan Searches for Long, Profitable Future in Providing Electronic ‘Eyes’ for Computers

The offices are anything but super at Superscan. But then the company has only been in business for two years.

Its name is taped to the door of its headquarters on the second floor of a Sherman Oaks office building. Inside, a banner bearing the name hangs lazily over one of the walls amid the clutter of computers, tables, shelves and coffee cups.

Superscan may be a hyperbolic name for such a small operation. But partners Norman Strassner, 36, a television director, and Shel Talmy, 49, a former record producer for The Who and The Kinks, are convinced that their company has found a budding niche of the computer business--scanning documents electronically to enter them into a computer.

Superscan is a service bureau. Companies that have a lot of documents and don’t want to bother having a typist enter all the information in a computer instead bring their documents to Superscan.

Superscan charges between 95 cents to $10 a page to feed the documents into a photocopy-like machine. Using a small camera, the scanning machine takes pictures of the text and does electronically what a typist working at a word processor does at a keyboard.

Superscan’s clients include Electronic Data Systems and Hughes, the aerospace company. Superscan said it often writes special software for its clients. Mead, the giant paper company, had Superscan enter lists of catalogue publishers as well as what type of business the publishers are in and how often the catalogues are published.

Superscan officials aren’t forthcoming about revenue and profit numbers, saying only that annual revenue exceeds $1 million and that the company makes money.

Analysts agree that service bureaus like Superscan are in demand now because scanners are still too expensive for many businesses to justify buying them. Scanners can range from $2,500 for an optical character scanner that slowly reads typewritten pages, up to $50,000 scanners that use artificial intelligence so it can read a wide range of text.

But just how long companies like Superscan can expect to flourish is open to question. “Companies will farm out the work for now. But as prices come down, service bureaus will have to move to higher-and-higher-performance scanners. They will have to upgrade their products to offer what cannot be done at the desktop level,” said Ajit Kapoor, vice president for electronic publishing services at Dataquest, a San Jose-based high technology market research firm.

Scanners are not new, but analysts and executives believe that they are finally ready to be sold in large numbers to offices because technical innovations have made it cheaper and faster to enter documents into a computer rather than to hire a typist.

Kapoor estimates the market for desktop type scanners, or those selling for $5,000 or less, was about $40 million last year. He said the market could grow to as much as $150 million next year.

‘Strong Need’ Cited

“It’s a growing thing because there’s a very strong need on everyone’s part to put documents into an electronic format,” said Ray Delisle, marketing manager with Kurzweil Computer Products, based in Cambridge, Mass., a division of Xerox that makes scanner machines. Superscan owns one of Kurzweil’s scanners. Delisle estimates some scanners can do the work of four people.

Strassner and Talmy know that cheaper scanner prices could hurt their business. So their company is trying to diversify by acting as a distributor and selling optical-disk data-storage machines that offer an alternative to microfilm.

In keeping with the nature of Superscan, Talmy and Strassner actually met electronically through their home computers.

Strassner, a computer buff, had set up an electronic bulletin board to help people in the entertainment business find jobs or list such information as the names of directors, cinematographers and agents. Talmy was checking the bulletin board and ended up becoming friends with Strassner.

The two founded Superscan with their families and an initial investment of $250,000, they said. They now have six investors, who are mostly in the mailing-list business.

Superscan is a decidedly different field for Talmy and Strassner. In the early 1960s, Talmy went to England to sell himself as a record producer even though he lacked experience. According to “Before I Get Old,” a book by rock writer Dave Marsh, a Capitol Records executive gave Talmy a batch of his own recordings before he left and told him to claim them as his own work.

‘I bluffed my way in,” Talmy said. The bluff worked, and he was hired by Decca records. Talmy was soon producing some early hits of the British rock invasion of the 1960s, among them “My Generation” and “I Can’t Explain” for The Who, and “You Really Got Me” and “All Day and All of the Night” for The Kinks.

Bitter Parting

Talmy and The Who later parted on bitter terms over creative differences. Author Marsh quotes the group’s leader, Peter Townshend, as saying Talmy “was a great believer in making groups who were nothing into stars. He was also a great believer in pretending the group didn’t exist when they were in a recording studio.”

Talmy looks back with some bitterness as well. “There is nothing a band won’t do for you before they become a hit and nothing they will do for you afterward,” he said.

Strassner, by contrast, came to Hollywood in the mid-1970s after directing programs for a UHF station near Miami. His credits include editing and field directing on such programs as “Entertainment Tonight” and the short-lived talk show “America.”

Although Superscan faces the perils of new technology’s wiping out part of their business, Bunnie Strassner, 37, a Superscan director and Norman Strassner’s wife, remains upbeat.

She said large companies who can afford to buy scanning systems often find it easier to use a service bureau rather than to bother hiring enough people to run and maintain the machines.

“There will be a certain amount of business lost as prices for scanners come down,” she said. “But there will always be a market for scanning services. Companies are subcontracting out as much of the work as they can.”