Newtek and the Video Toaster
When I think what could’ve been with NewTek and the Video Toaster, I must admit feeling a twinge of sadness. NewTek could’ve been the next Apple Computer if, in my opinion, one thing would’ve happened that was a pretty clear tipping point.
In April of 1990, NewTek introduced the Video Toaster. A board-level product (with great special effects and switcher software) that plugged in to the only video-ready computer at the time (the Commodore Amiga). It revolutionized the video business and kickstarted the desktop video category.
Two guys I’d become acquainted with, Reid Johnson and George Johnson (no relation but college buddies), owned a video dealership that had introduced the Video Toaster to the Minneapolis/St. Paul area to great success and acclaim. Tim Jenison (founder & owner of NewTek) and his VP, Paul Montgomery (sadly now deceased), were so enamored with what they’d done that they hired Reid and George to open a sales headquarters in Minnesota.
Needing someone that had channel experience to assist them, they hired me.
What an adventure! The Toaster began selling like hotcakes and we had dealers scrambling to carry it. We had three major distributors that were buying up all our production. The company nearly tripled in revenue in a year.
This was *the* cool company too. We were showcased on the NBC Evening News with Tom Brokaw. Our Christmas party had people like James Doohan (Scotty on Star Trek), Wil Wheaton (Star Trek Next Generation) and the guy that played Lurch (Carel Struycken) in the Addams Family movie that year, as well as a host of others. NewTek had a whole “cool friends” network which included people like Penn & Teller. 1993 brought NewTek and its founder, Tim Jenison, recognition in the form of a Prime Time Emmy Award for Technical Achievement from the American Academy of Television Arts and Sciences.
We also had a “spokesmodel” named Kiki Stockhammer that could demo better than anyone I’d ever seen…and she drew crowds of men at all the video related events. I’ve lost track of her and wonder about her some times.
Driving toward a tipping point that would either make us a great company or a small cool one only, we had a strategic planning session out at Pajaro Dunes on Monterey Bay in California. Its claim-to-fame was the volume of Silicon Valley companies that had had sessions like it there (including Steve Jobs and the Macintosh team). Brad Carvey (the brother of comedian Dana Carvey) was my roommate in our rented house with 8 bedrooms — as he’d been the key hardware design engineer on the Video Toaster — and was just a great and really smart guy. I recall spending hours talking with him one night…and ultimately I fell asleep listening to the crash of the waves from the Bay.
What was the tipping point? We all knew that we had to get off the Amiga since Commodore was on pretty shaky financial ground. Visiting Irving Gould at his Commodore Bahamian headquarters, our leadership tried to convince a reluctant Gould to license the chipset so we could build a board for the Macintosh and the PC. Alas, Gould wouldn’t since he was making too much money in currency arbitrage moving containers of finished Amiga’s around the world. Also, the Video Toaster was nearly the *only* reason Commodore was selling any of the boxes anyway so he had little incentive to license the chipset that would eliminate his primary sales channel and reason for Amiga computers to live.
Commodore declared bankruptcy in late 1994…making any further discussions a moot point and eliminating the platform upon which the Video Toaster relied.
My own back-of-the-envelope projections indicated we’d have been a $100M company and more within a year or so had we’d been able to license the chipset. Instead, NewTek has gone off on other adventures (Lightwave 3D, etc.) and is roughly a $5M company today. Sigh….
NOTE: For a nice history of the company, read the article here.