Dahlgren and Ted Claire were living in San Francisco when they met. Claire
played music by night and worked in a cabinet shop by day. Dahlgren was
a magician and fire-eater, performing for the audience in between sets
at the club where Claire played. Dahlgrens stage name was Willie
the Wizard a name that had significance for him in childhood and
would play a part in his engraving adventures as well. By day, Dahlgren
made Appalachian Mountain dulcimers.
same things drove Dahlgren and Claire that drove most of the innovators
in the world: they were independent, and they liked to find a better way
to do things. Were really just go-do-it kind of
guys, Dahlgren explains. We get into a business more out of
curiosity and interest, or anger that someone wants to charge way too
much for something. Weve never had a business planwe do things
more because its a project thats interesting and worth pursuing.
one point, Dahlgren and a friend decided to get into the business of restoring
antiques. Antique restoration! laughs Dahlgren. It sounds
like I knew what I was doing, when really it was repairing old furniture.
A friend and I decided to canvass San Franciscos Union Street, which
was full of antique stores. We were thinking wed just hand out business
cards, but it didnt work out that way. Wed walk into a place
and the owner would say, How much to repair this? Wed
give them an estimate, and theyd give us the furniture. By the time
we got to the end of the street, our truck was crammed with probably $4000
worth of antiques!
story illustrates San Francisco, and really, most of the country, in those
days. People were very trusting, he says. This trust also
played a part in the coming of the computerized engraving machine.
dont remember how I came upon the engraving shop that day,
says Dahlgren. Ive always been curious about how things are
done. But I remember walking into the back of this shop where a guy was
working with a New Hermes pantograph. I thought to myself, Wow! In this
day and age, thats how you engrave something?
had already been playing around with computers. The first ones that were
available to the public, you had to practically solder them together yourself.
Some were actually sold as kits. And there were already these mini-milling
machines around. They werent computer controlled, but you could
digitally control them. They worked with independent circuits and counters,
and they were cleverly designed. But I thought maybe I could make something
work with a pantograph along those lines.
went out and bought a computer kit for about $2000 and started looking
for a way to make X-Y movements with it. The first thing I did was
build an electronic interface so my computer could drive stepper motors.
Next, I programmed my first letter an L. I chose L for my first
letter because it only had straight lines. I engraved it on a wooden board
a length of 2"x 4".
someone who has always been fascinated by the idea of getting a computer
to make something move, Dahlgren was thrilled. I thought, Ive
gotta figure out how to engrave an X, or something complicated! But you
have to understand, the computer I was using had very little memory. It
was totally underpowered.
computer technology that we use now didnt exist back then, and a
simple font had to be digitally programmed, point by point, line by line,
letter by letter, until Dahlgren had completed the entire Gothic font.
We take it for granted what we can do today, he says. You
can take a font and condense it, expand it, flip it over, flip it backwards.
To do that back then was tricky. We had to create the definition (the
basic digital recipe) of every letter of a font first. There were no instructions,
and the computer had little power.
took Dahlgren six to eight months to complete that entire font of upper
and lower case letters and variations. Id wake up every day
and think, hey! I can make it do this! And then Id program something
like italics. Then Id think, hey! Maybe I can do this! It all evolved
on a step-by-step basis.
of the original New Hermes reps, Bob Domito became vice president
of sales prior to the introduction of the Concept 2000. Photo circa
Dahlgren System One (circa 1980) consisted of a Radio Shack TRS-80
computer with 16K of RAM, a control unit which many users said resembled
an old suitcase. The engraving table had a 6" x
8" working range and the programs were loaded using a $10 cassette
Worlds Biggest Job Shop
Dahlgren wasnt creating his machine with an eye toward selling the
worlds first computerized engraving machines he wanted to
own the worlds biggest engraving job shop. The first machine
that I developed was a single-computer machine. You typed in your job
and then it engraved. You didnt have the ability to put in your
next job while it was engraving the first. I thought it would be nice
to do large engraving jobs for other shops, especially if they had to
make a lot of multiples for the job. So I put an ad in The Engravers
Journal, and I was looking for wholesale work. I got only two or three
inquiries. Then I realized I knew nothing about the other skills required
for engraving, things like sharpening cutters, etc. And I was starting
to go broke.
it turns out, Dahlgren did get a few other calls but not about
engraving. People had seen his ad and wanted to know about the machine
he was using. At this point, explains Dahlgren, it wouldnt
have been successful as a commercial machine. It was just a giant X-Y
table that weighed 2,500 pounds. We had to use a forklift to get it through
our second-story window.
day a fellow called me up. He was in the business of making dog tags,
the kind you buy at a pet store. He said, Well, if you can make
one of those engraving machines for me, Ill take three of them,
and Ill pay you $18,000 for each. That got my attention!
realized that he was in the wrong business. Instead of looking for engraving
jobs, he needed to be selling engraving machines. Since the prototype
machine was not saleable at that point, he needed to redo much of the
programming to turn it into a viable unit that could do real work.
this point, Dahlgren enlisted help from his friend Lew Silverstein. (The
two met at a party where Silverstein asked if anyone wanted to help him
bring his sailboat from Acapulco to San Francisco. Dahlgren immediately
accepted, and they became friends during the month-long sail.)
new machine consisted of a Radio Shack TRS-80 computer with 16K of RAM
memory. Dahlgren also created the System One control unit, which many
users said resembled a very old suitcase. The control unit had a second
computer to accept jobs and was able to store up to eight fonts on EPROM
chips, pressed into slots on slide-in circuit boards. The engraving table
was made of aluminum components and held a 6" x 8" plate. Hard
drives were not yet available, so you loaded the programs from an audio
cassette tape using a $10 tape player.
software could be finicky. You had to first load a cassette containing
an assembly language program, followed by a cassette containing
the front-end program, written in BASIC computer language.
development of Dahlgrens first system took most of a year, and toward
the end of the year, Claire joined Dahlgren and Silverstein. However,
by 1980 Dahlgren had a fully-operational prototype.
Hu (left), born in China, educated at Stanford University, earned
a degree in engineering, and formed a Palo Alto, CA-based machine
design and manufacturing business named H-Square. H-Square became
one of the industry leaders and developers of computerized engraving
machines. Photo with sales rep. Tom Franklin, circa 1983.
Morrison briefly served as president of New Hermes in the early
80s and was the driving force behind the development of the concept
2000. Photo circa 1985.
investing substantial time and money in his machine, Dahlgren was still,
as he recalls, going broke. He realized that in order to recoup
his investment, he was going to have to start selling the machine. And
that meant going up against the industry giant, New Hermes. Maybe, thought
Dahlgren, his San Francisco outfit wasnt in a position to do battle
with the Goliath, and they should see if New Hermes was interested in
buying their machine. Not knowing about Randy Pauls unsuccessful
attempt to sell his system to New Hermes, among others, Will Dahlgren
thought it sounded logical to allow the industry leader to develop and
market his machine.
brother Jack had met Dahlgren, says Bob Domito, who spent nearly
35 years at New Hermes and shortly thereafter was named Vice President
of Sales by New Hermes. Jack called New York and spoke with Company
Chairman Norbert Schimmel. Jack convinced him this was something New Hermes
should look at.
needed some help in the manufacture, but the basic design was manufacturable,
says Dahlgren. New Hermes had the experience we lacked in manufacturing.
So Lew went to New York to talk to them. We made them an offer for $80,000,
and that included the machine design and software, and Id go to
New York and spend six months there refining the program to their specs.
But they turned us down.
elaborates on the refused offer. A guy in engineering convinced
Schimmel that the whole thing was a Mickey Mouse affair and
that there was no future in computerized engraving. He convinced Schimmel
that we shouldnt get involved. All Dahlgren wanted was to get his
money out of the machine, and get a job with New Hermes to oversee the
continued development of it. He would have worked for a nominal salary,
when they should have been showering him with gifts!
decision was, of course, no reflection on the management of New Hermes
today. Schimmel and Dannheiser, who were well into their 70s at the time,
simply didnt see the revolution that was headed for the industry.
But the rejection cemented the decision for Dahlgren and set the stage
for the future. Dahlgren would produce the machines themselves. As Will
Dahlgren told Mike Davis at the time, Dahlgren Engraving Systems Inc.
was going head-to-head with New Hermes.
Bernstein, nephew of Paul Kahn, one of New Hermes original
salesmen; joined the company in 1980 and remembers when the Concept
2000 was just a concept of cardboard boxes. Photo circa 1999.
Hermes was rapidly losing market share to Dahlgren in 1983 and needed
to stop them from taking over the market. Together, New Hermes and
Gerber Scientific began working on the Concept 2000.
Launch the Machine!
realized that they needed some input from people who knew engraving, Dahlgren
and Silverstein took the machine to Michigan to meet with a group of engravers,
including Mike Davis and Jim Farrell, who, as founders of The Engravers
Journal, had offered advice, encouragement and inspiration throughout
the creation of the machine. While in Michigan, Dahlgren hosted the first
of the companys new famous traveling road shows held at Farmington
got some orders for the machine in Michigan, and then we went to New York
and got some orders there too, says Dahlgren. But then we
were confronted by a big question: How were we going to finance it? We
had no money, no manufacturing shop. So Lew Silverstein came up with a
brilliant idea: Wed ask people to put one-half of the payment down
ahead of time, and pay the rest when the machine was delivered. And people
did it! It ties into the trust thing that was prevalent among people at
the time. We were just some random hippie outfit, and who knows, we could
have gone belly-up. But they trusted us with their money anyway.
first people who were willing to bet on Dahlgrens machine were not
only enthusiastic proponents of the latest and greatest engraving innovations,
they realized the invention was going to be big. For the first time, an
engraver could have a non-skilled person turning out items that, until
then, had to be engraved by a professional. And as many users quickly
learned, one computer user could easily outpace four pantograph operators,
with virtual, absolute repeatability from plate to plate.
people started using those first few machines, says Dahlgren, we
started to hear stories. The best was a fellow who paid for his machine
in three weeks! It turned out that skilled engravers were not losing their
jobs, because with these machines in the shop they could accept so much
more work than they could in the past.
started turning out engraving machines as quickly as possible which
wasnt very fast. They continued receiving orders and producing the
machines, albeit slowly. In the meantime, another entrepreneur was about
to enter the field.
Hu was born in China, and as a young man he decided he wanted to make
a name for himself in the United States. He didnt understand English,
and he knew he needed to learn it. He made his way across the border into
Hong Kong and found a YMCA where he could take English classes. Hu worked
hard doing odd jobs, and his tenacity impressed the YMCAs director.
The director helped Hu gain contacts that eventually helped him enter
the U.S. From there, there was no stopping him. Hu was accepted at Stanford
University, managing to scrape together the money to afford the tuition.
He graduated with a degree in engineering and, with a partner, Su-ling
Hsu, formed a machine design and manufacturing business using CNC machines.
wife, Joan, owned a trophy shop, Contemporary Awards, in Palo Alto, CA.
Like many others at the time, she struggled with the limitations of her
New Hermes pantographs. Hu found the world of engraving to be fascinating,
and his mechanical expertise lent a natural bridge to forming a relationship
with the Dahlgren people. Dahlgren needed some help manufacturing parts
for their tables, and Hus shop was ideally set up to produce that
type of equipment, so the two struck a deal that included Dahlgren swapping
a System One for some machining services by Hus company, H-Square.
a year later, the relationship ended when Hu came out with his own computerized
engraver, the H-Square Model 1518. The two companies were now competing,
and for a while, H-Square was Dahlgrens only serious competition.
Although Dahlgrens machines still ruled the roost, some found the
H-Square machines to be more likeable than Dahlgrens.
Bradford, who now owns Artisan Engraving Supply Company, was just entering
the world of engraving when computerized engraving machines were first
being developed. He had started his own engraving shop in Texas and was
struggling with the labor-intensive pantograph when a traveling roadshow
came through town.
was the Dahlgren people, says Bradford. They set up a show
at the airport, and I went and thought, this is the answer to our problems!
I was poised to buy one when I saw an ad for a company called H-Square,
and they looked pretty slick too. They didnt have any reps in the
middle of the country, so I flew to California. I went out there with
the idea of buying the least expensive one they had, which was the 8
x 10 table, but I walked away with the 15 x 18 table.
Bradford chose H-Squares product because he thought the design and
approach of the software was better than Dahlgrens. The competition
the meantime, although they had not yet entered the growing market of
computerized engraving machines, New Hermes was going through some changes
of their own.
Domiteaux, at various times worked for New Hermes (twice) and Dahlgren
before developing his Domiteaux-brand engraving system. After Jacks
death in 1985, the company and its equipment line were acquired
by Pantograph Corporation of America and then by Newing-Hall.
H-Square model 1518 was the first machine developed by Michael Hu.
Hermes was founded by Norbert Schimmel, who ran the company for more than
forty years with Werner Dannheisser. The two men were German immigrants
who had built up a solid, well-run, debt-free company worth about $25
million in the late 1970s and early 80s. Jim Bernstein, the nephew
of Paul Kahn, one of New Hermes original salesmen, joined the company
in 1980. I grew up around Mr. Schimmel and Mr. Dannheisser,
remembers Bernstein, and after college I started training racehorses.
The equine industry was my chosen profession for many years, and finally
my uncle Paul said Okay, no more race horses. Its time for
you to get a business. He gave me his New Hermes sales territory
in New Jersey. I always thought I was making money with the horses. But
when I went to work for New Hermes I said, Hey! I like horses, but
thats not real money. I realized if I could buy and sell horses,
I certainly could buy and sell engraving machines.
like most New Hermes employees, loved the company. The company maintained
a family atmosphere, where everyone knew everyone else, and closing a
sale was not difficult. Everybody worked hard, says Bernstein.
There was little dissent, and little unhappiness. It was a very
only was it a fun place to work, the New Hermes salesmen were very good.
Bernstein tells a story of the training his uncle, Paul Kahn, would give
a new recruit.
would go into the field with a new rep, and show them how to sell. They
played roles: Paul was the customer, and the new guy was a rep. Paul would
go into a jewelry store and ask to see a nice watch. Hed say, Hey,
Id like to buy this gold watch for my wife, and Id like to
have her name engraved on it. The owner, who didnt have any
engraving equipment, would say, Im sorry sir, I cant
do that. So Paul would leave the store saying, Sorry, I cant
buy the watch from you. Then, a half hour later, who walks in? The
New Hermes sales rep! It was very effective. He was creating his own demand.
the late 1970s, Norbert Schimmel and Werner Dannheisser were retiring
and preparing to sell the company. As part of the restructuring for the
sale, they hired a consultant, Don Morrison, to come in and prepare the
company. Most old companies have some fat that needs to be trimmed,
says one industry insider. New Hermes wasnt a neat and tidy
package at the time, so they wanted to clean some things up and make the
company really saleable.
Morrison had been running Roland, New Hermes supplier of flexible
engraving stock, when he was hired to become New Hermes interim
president. Morrison realized almost immediately that New Hermes was missing
a very big boat the revolution of the computerized engraver. It
was an area that New Hermes had no presence in at all, and Dahlgren was
siphoning market share from New Hermes at an alarming rate.
New Hermes had no idea how many systems Dahlgren was selling, they knew
that Dahlgren was putting a New Hermes spindle on every system sold. And
with Dahlgren ordering batches of 2550 spindles at frequent intervals,
and with Dahlgren systems priced at around $13,000, it didnt take
a rocket scientist to figure out that New Hermes needed a machine, the
sooner the better. Although New Hermes was contracted with a company in
France called Vitoux that made New Hermes pantographs, they didnt
have contacts with anyone who had the capability to make a machine that
would compete with Dahlgrens.
solve the problem, Morrison found Gerber Scientific, a large company that
later gained fame by introducing the Gerber vinyl letter cutting machine
and other sign-related products. The fit seemed like a good one, or at
least the best situation Morrison could find given that New Hermes was
rapidly losing market share to the Dahlgren team and needed to stop the
now-profuse bleeding. Together, New Hermes and Gerber began working on
the Concept 2000.
Preis Cence Engraving System appeared briefly before the company
went out of business, following a fire, which destroyed its Hillside,
keep their loyal customers from defecting to Dahlgrens or H-square
machines, the Concept 2000 was advertised in The Engravers Journal
when the Concept 2000 was literally still a concept. New Hermes created
a cardboard mock-up of the upcoming Concept 2000 and covered it with a
white bed sheet, running the picture in an ad in EJ. The
Concept 2000 was a direct response to what Will Dahlgren was doing,
the road to completion, New Hermes deal with Gerber hit some snags.
The machines production went well over budget, and contractual problems
arose between Gerber and New Hermes. It had to be difficult for
New Hermes, says Dahlgren. Its tough to contract with
someone else to build what you think you want. You have to be able to
really specifically say what you want, but New Hermes wasnt sure
what they wanted. If we made a mistake, it was easy for us to go back
and fix it. But if there was a problem with the machine Gerber made, New
Hermes had to get Gerber to fix it, and they had to pay more money to
get it done.
was also the problem that New Hermes really didnt understand the
new technology as well as the company understood manual machines. At the
time, Jack Domiteaux, who at various times worked for New Hermes, Dahlgren
and his own company, summed up the difficulty by stating, Gerber
is not building a machine for engraving they are building a machine
for New Hermes.
issue New Hermes encountered was the fact that the Concept 2000 was a
high-end machine, competing against Dahlgrens System One, which
was not. Bernstein explains the problem: Will was providing a low-end
machine, selling for $10,000-$13,000. New Hermes machine was high-end,
costing about $18,000. Will was literally eating our lunch.
Concept 2000 was not the only revolutionary change occurring at New Hermes.
The company was still being prepared for sale under Morrisons guidance,
and in 1981 Schimmel and Dannheiser decided to make some changes to the
structure of New Hermes renowned sales force.
Hermes sales reps were legendary in their knowledge of the industry and
ability to close a sale. Indeed, at that time New Hermes and its international
partner, Gravograph/Vitoux, was the only company in the engraving machine
business which had a sales force and network of international distribution.
All New Hermes reps were paid on commission, and some of the best reps
easily earned six figures, despite having to pay their own traveling expenses.
an effort to improve the companys bottom line for the impending
sale, Schimmel and Dannheiser decided to change the sales force from being
paid on commission to being paid a salary. In almost all cases, the salesmen
(especially the better ones) would be bringing home much less on salary
than they were on commission, and to help offset this discrepancy, New
Hermes would pay their travel expenses.
the salesmen knew a bad deal when they heard it, and after the sales-force-conversion
bomb was dropped at the legendary 1981 New Orleans sales meeting, many
packed their bags and defected to Dahlgrens operation. These
were the guys who owned the industry! exclaims Bernstein, who, along
with the rest of New Hermes management team, was devastated to lose
so many good salesmen all at once.
the company was sold, the new management realized the mistake of their
predecessors and changed the sales force back to a commission basis, but
the damage had been done. The mass exodus of the sales force didnt
help New Hermes as they struggled to regain market share and become a
contender in the world of computerized engraving machines. In the meantime,
competition was becoming fierce as the market grew by leaps and bounds,
with no upper limit in sight.
the early 1980s computer controlled engraving had become a proven fact.
But the market was really still in its infancy and a number of todays
major players were not yet involved! A lot of fascinating industry-shaping
events lie ahead, so stay tuned for our next installment in this series.