At first blush, bak USA’s plan to build tablet PCs in Buffalo sounds like a project better suited for China than the top floor of the former Sheehan Hospital building on Michigan Avenue.
But J.P. and Ulla Bak aren’t ordinary business people. They’re business people who want to do good at the same time.
Sure, the Baks want their Buffalo factory to make money. In fact, they hope it will be profitable within six months.
And of course they want to sell lots of the tablet PCs they plan to make in Buffalo, some to consumers here and across the United States, but mostly to people in Africa, who often can’t find a tablet PC to buy, even if they can afford one.
“We want to connect with society, but we also have to show a profit,” said Ulla Bak, the president of the new venture, which they hope to open Nov. 1 and which will bring 120 new jobs to the region when it’s running at full speed.
“We know we can’t revolutionize the world, but we can do our share,” she said Tuesday, the day after bak USA was selected to be part of the state’s Start-Up NY program, which allows new businesses that work with the state’s universities and colleges to operate virtually tax-free for 10 years.
The Baks already have been doing their share in Haiti. The Danish-born attorneys, who now live in Pittsburgh, came to the United States and co-founded several companies, including EMX Corp., a California business that came up with a way to neutralize electromagnetic radiation emitted by cellphones. After selling that business, the Baks were wealthy and had retired when Haiti was devastated by an earthquake in 2010.
Wanting to help, they set up a foundation to help build houses in the Caribbean nation. And then, with help from a $200,000 grant from the U.S. Agency for International Development, they created a business, called Surtab, which makes low-cost Android tablets that it sells for as little as $89 wholesale, mainly in the Third World.
The company now has about 65 employees and makes about 5,000 Surtab tablets a month. Within three months, its Port-au-Prince factory was profitable, and even more significantly, it was providing badly needed jobs to Haitian residents.
“The tablet PC is a miracle in the hands of a little kid in Kenya or a student in South Africa,” said J.P. Bak, the new venture’s chairman. Connected to Wi-Fi or a data network, a tablet PC can give users in the Third World access to a treasure trove of information and knowledge on the Internet.
“A book is a nice thing, but in this part of the world, [a tablet] is a deal changer,” he said.
The U.S. Ambassador to Haiti, Pamela A. White, suggested that the Baks try to do the same thing in the United States. The couple’s first thought was to do it in Detroit, a Rust Belt city that had fallen into bankruptcy.
But then, Pamela Kefi, a Buffalo native who knew the Baks through her work for USAID in Haiti, suggested in March that they take a look at her hometown. She told them about the big refugee population here, and the high unemployment rate among young people. And she told them about the Start-Up NY program, which would go a long way to offset wages, which would be about 10 times higher at its U.S. factory than they are in Haiti.
It also didn’t hurt that Ulla Bak spent three months at the University at Buffalo for a summer program during her school years.
“In a matter of 12 hours, they were in a car headed to Buffalo,” Kefi said.
Gradually, the pieces started coming together. Working with the Buffalo Niagara Enterprise business group, the Baks connected with lawyers from Phillips Lytle to help manage legal obstacles. The BNE introduced the Baks to local accountants and other resources. They started working with officials from McGuire Development Co. on 10,000 square feet of space in the Compass East building on Michigan Avenue, which has been designated by UB as part of the Start-Up program.
The Baks plan to hire about 17 “extremely skilled” administrative staff members. They also expect to hire about 100 production workers, who will assemble the tablets in a clean room using components purchased from suppliers in China.
A typical tablet will have about 50 components; one worker will assemble each tablet from start to finish. The name of the worker who assembled the tablet will be on the device’s inside cover – to both create a sense of ownership and accomplishment for the employee, as well as accountability. There will be no assembly line.
“We want our workers to have a meaningful life,” Ulla Bak said. “A person on an assembly line who screws in the same screw 10 million times a day doesn’t have a meaningful life.”
The Baks plan to pay their assembly workers a little more than minimum wage, with medical benefits. The workers also will be able to earn commissions that can significantly increase their pay if they are able to make more than two or three tablets in an hour.
The Baks figure they can train about 10 assemblers a month, with no college degree required. They hope many of the workers come from the minority and refugee community.
“They don’t need to have a specific education,” Ulla Bak said. “We believe if people have a motivation to learn, they can learn.”
The bak tablets won’t come with a lot of bells and whistles. The company will keep costs down by using the open-source Android operating system, with access to all of the free and paid apps available through the Google Play store. Its tablets won’t have the high-resolution screens of many tablets sold in the United States, but J.P. Bak said the goal is to keep the devices affordable and practical, not to pack them with amenities that aren’t essential.
Bak plans to sell three models of its tablet, ranging in price from $89 to $159. One model will be Wi-Fi only. Another will work on 3G data connections. Another, to be introduced later this year, will allow 4G data connections.
The company’s plan is to try to sell the tablets to big telecommunications providers in Africa, as well as schools and other institutions. It also hopes to drum up U.S. sales.
“We want to deliver exactly what is needed as a working tool,” J.P. Bak said.
And in the process, show that electronic devices, like tablets, can be profitably put together in places like Buffalo.