J.P. and Ulla Bak aren’t ordinary business people. They’re business people who want to do good at the same time.
It’s a novel concept – a business with a social conscience that puts people on par with profits – and the Danish-born Baks have put Buffalo at the heart of their unusual vision.
Their tablet factory on Michigan Avenue has grown, in a little more than two years, to nearly 80 employees, with workers of 27 different nationalities speaking 22 different languages – many without high school diplomas – toiling alongside highly educated colleagues with Ph.D.s and advanced degrees.
“We don’t ask what school papers you have. It doesn’t matter, as long as we think they have the passion and the drive,” J.P. Bak said last week as the company started moving into its newly expanded space on the fourth and fifth floors of the Compass East building and geared up for the launch of a new, souped-up tablet.
“A lot of people are soulless in their life, not because of them, but because life just moved them around in the wrong direction,” Bak said, standing in the company’s new assembly area, with windows offering a glimpse of the Buffalo skyline. “Their parents didn’t take care of them, bad friends in school, and so forth. We pump them up, and sitting there, you feel like you are really something.”
But this isn’t charity. For the Baks to succeed, their business also has to succeed in a hotly competitive consumer electronics market. If their tablets don’t sell, it will mean the end of the Baks’ dream to create a business in Buffalo where disadvantaged workers can gain valuable work experience and have the opportunity for advancement.
Their vision was to build a business that would make high-quality tablets that would be affordable to consumers who couldn’t buy more-expensive models. And the Baks wanted to make them not in China, but in the United States, in a city like Buffalo, where they could employ workers from vulnerable populations, including refugees and immigrants who lacked formal education.
“I actually think, if you’re not greedy, that good stuff will come back to you,” Ulla Bak said. “If we treat other people with respect and properly, we think this business will grow even more than it would if we stuck to a traditional Corporate America model.”
“If you sense the atmosphere in our facility, it is energized. It is optimistic. People don’t go home when the clock rings, and they do that because they feel they make a difference in the world,” she said. “It’s not just a difference in the bottom line. But it’s a difference in other people’s lives. That’s a big, big part of the success of a company like ours. People are really, really invested. It’s not just a paycheck thing.”
Do jobs and robots mix?
The Baks also are doing something that, at first, seems to run contrary to their people-first focus. They’re adding robots to their assembly areas. The first robot, built by Japanese manufacturer Kawasaki and modified by experts at the Buffalo Manufacturing Works, arrived last week and more are on the way. Eventually, each of Bak’s assembly teams will have a robot, said Christian Bak, Ulla and JP’s son and the company’s chief technology officer.
“It’s a deeply sensitive subject,” Christian Bak said.
While Bak USA is focused on creating jobs, it also needs its tablets and laptops to compete with products from Apple Inc., Microsoft and other big-name brands. Adding robots to the mix will make the assembly process about 30 percent more efficient. Each robot will do about 20 percent of the assembly work on each tablet, primarily by screwing in 19 of the 57 screws that go into each tablet, Christian Bak said.
“It allows us to have far greater precision work and efficiency,” he said. It will allow Bak USA to produce customized tablets in batches as small as 200 units.
“We will never go to a lights-out, robot-only assembly line,” Christian Bak said.
“It’s a fantastic example of how a company can leverage technology while enabling – and not hurting – the workforce,” said Michael Ulbrich, president of Buffalo Manufacturing Works, a Buffalo Billion-backed initiative to help companies learn how technology can help improve their operations and put those ideas into practice. “The product they’re assembling will go back and forth between the robot and the human operators.”
The Baks thought they could succeed in Buffalo because they’d already done it years before in Haiti, after the Caribbean nation was devastated by an earthquake in 2010. By then, the Baks already were wealthy and retired, having started several companies, including EMX Corp., a California business that came up with a way to neutralize electromagnetic radiation emitted by cellphones.
They headed to Haiti to see how they could help, first by building homes. They quickly decided that they could have an even bigger impact by creating jobs.
So the Baks started their previous low-cost tablet company, SurTab, opening a production plant where locals assembled tens of thousands of tablets that were sold in impoverished African countries.
Once SurTab had grown to the point where it was successful, the Baks sold it to their Haitian partners and started to focus on doing something similar in the United States. They first looked at Detroit, but eventually settled on Buffalo.
When the Buffalo operation opened two years ago, the Baks initially figured that their biggest market would be the same poor African countries that SurTab had targeted. They soon realized there was an even bigger need for affordable technology in the United States among businesses and school systems, including the Buffalo school system, which bought $75,000 worth of discounted tablets for its students in 2015.
That shift led to Bak USA forming a partnership with Microsoft Corp. last year to become an “original equipment manufacturer” of computers that run on the Windows 10 operating system. Bak produces the tablets. Microsoft distributes them.
Bak USA had to redesign its products to improve the quality and add capabilities to its tablets. Its second-generation Seal 8 tablet sells for $575 to $789, and the company is on the verge of releasing a new version of the Seal tablet.
A model to be duplicated
This year, Bak USA hopes to make 40,000 to 50,000 tablets at its expanded Buffalo factory, which now spans about 30,000 square feet of space. That’s only about a quarter of the factory’s capacity, so there’s plenty of room for Bak USA to grow, Christian Bak said.
So far, Bak USA has invested $22 million in its Buffalo facility. B. Thomas Golisano, the billionaire founder of Paychex and the former owner of the Buffalo Sabres, last year bought a 50 percent stake in the company. Bak USA, which picked Buffalo partly because it operates virtually tax free as part of the state’s StartUp NY economic development program, has promised to hire 267 workers by the end of 2019.
The Baks’ vision, however, doesn’t just include Buffalo. If the business is successful enough, the Baks eventually would like to open other manufacturing sites that target disadvantaged segments of the population in other cities and other countries.
“Buffalo will always be the hub. This is the template,” Christian Bak said. “We want to have smaller product workshops around the world and around the country.”
If it does, the Baks' recipe will be the same.
“The secret sauce is the people,” Christian Bak said.
“We want to create a whole new way of manufacturing,” he said. “We’ve thrown out the playbook because we really didn’t know what the playbook looked like.”