Innovative computer-tablet maker Bak USA is more than doubling its space at its downtown Buffalo headquarters, as a surge in business stemming from a new partnership with Microsoft Corp. generated a need for more room and workers.
The company run by the husband-and-wife team of J.P. and Ulla Bak signed two leases for the entire fourth floor and part of the lower level of the Compass East mixed-use building at 425 Michigan Ave. That’s in addition to the entire fifth floor, which the company currently occupies, with about 53 jobs as of midsummer.
Bak will have a total of nearly 30,000 square feet after about six months of construction to build out the new space.
Bak’s expansion will also mean that the entire 150,000-square-foot complex – the former Sheehan Memorial Hospital, until McGuire Development Co. acquired and redeveloped the 8.7-acre property for $20 million – is now fully occupied, with Time Warner Cable Business Class, University Pediatric Dentistry, a training facility, and some residential units taking up most of the rest of the building.
The entire fourth floor will house a new clean production room for Bak’s manufacturing, while the bottom level will host a new production line for “surface mount technology.” The equipment for the surface mount line is “extremely heavy,” and had to be put on the bottom floor to carry the weight. But that will allow the company to produce customized computer motherboards in much less time by shaving two months off the process, Ulla Bak said in a telephone interview from Seattle, where she and her husband were traveling this week.
“That is our major step toward being able to say our product is made in America,” she said. “We are very much on track.”
The expansion of production space at the company, which will likely cost about $1 million, comes as Bak USA enters a new stage in its development following a change in strategy earlier this year.
The company was originally founded by the two Danish immigrants as a socially focused maker of low-cost tablet computers operating on the Android system and aimed particularly at low-income consumers who can’t afford higher-priced models. The goal was also to stimulate economic development in a disadvantaged or impoverished area by training and employing workers from nearby struggling neighborhoods, and the Baks seized on the state’s Startup NY program and related tax breaks to set up shop on Buffalo’s East Side instead of in Detroit.
But the couple found that their initial model, based on a company they created in Haiti to make low-cost tablet computers and sell them in African countries, actually missed a much larger opportunity right here in the United States – to sell affordable technology to Americans, including businesses and public school systems like Buffalo’s. So it signed a partnership with Microsoft to become an “original equipment manufacturer” of computers that run on Windows 10, allowing it to bring its newest product to market faster with help and credibility from Microsoft.
It’s now ramping up operations as a business-to-business manufacturer of tablets that range in price from $450 to $700, and will be able to produce customized computers at a rate of two per hour per employee. It has invested $22 million in its Buffalo facility, including current spending, as it launches its new product and increases hiring, necessitating the additional space.
Bak previously pledged to hire 267 workers by the end of 2019, including in production, sales, marketing and customer service roles, and expects to have at least 75 by December. Many are immigrants, with little prior experience. One of its employees recently got a job in Silicon Valley after just six months working with Bak.
“I’m super-excited. This is a dream come true. I couldn’t have imagined all of this,” Ulla Bak said. “It’s important for society. We are changing people’s lives, creating jobs for people who have no chance for getting a job. Now they have a skill and basis for income in the future, and that’s a tremendous satisfaction.”