Last Sunday's New York Times printed a horror story about what happens
when small businesses deal with Wall Street Bankers. The victims were
Jim and Janet Baker, who founded Dragon Systems: (01)
I knew Jim & Janet from the 1970s, when they worked on a speech
recognition project at IBM Research. Around 1980, they wanted to
develop a product that would require the speaker to make a short
pause between words. Without such a pause, the following two
phrases could not be distinguished by any software at the time
-- even native English speakers would make mistakes: (03)
How to wreck a nice beach.
How to recognize speech. (04)
Their manager at Yorktown Research, Fred Jelinek, vetoed the idea
because his goal was continuous speech recognition -- no pauses. (05)
As a result, Jim & Janet left IBM to start their own company, which
they called Dragon Systems. Their early products required slight
pauses, but they eventually supported continuous speech recognition.
By the late 1990s, Dragon Systems was one of the best on the market. (06)
By 2000, Jim & Janet wanted to sell Dragon Systems. They hired
Goldman Sachs to handle the sale. Goldman Sachs completed the sale
to Lernout & Hauspie for $580 million. But Goldman Sachs advised
them to take stock in L & H instead of cash. Then L & H went into
bankruptcy, and Jim & Janet lost everything -- including the rights
to the software they had developed. (07)
Today, some of the software they developed is running in various
products, including Apple's Siri. But Jim and Janet got nothing.
For all the lawsuits and horror stories, see the above article. (08)
Bottom line: Small businesses generate innovations and create jobs.
But no matter who wins or loses, Wall Street Bankers get the money. (09)
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