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Cowell, Casey G. - Overview, Personal Life, Career Details, Social and Economic Impact, Chronology: Casey G. Cowell

robotics business chicago computer

(1953-)
3Com

Overview

Casey G. Cowell made a significant contribution to the growth of the computer industry when he and some friends founded U.S. Robotics modem producers in 1976. The firm was a major player in advancing modem technology, increasing the speed and developing software, which allowed their modems to run on almost any computer. By developing its own technology instead of licensing it, U.S. Robotics was able to keep their costs down, thus capturing a large share of the market and allowing a greater number of users to benefit from the product. After Cowell, as chairman and CEO, led the firm to sales of over $2 billion, U.S. Robotics was acquired in 1997 by 3Com for $7.3 billion.

Personal Life

Casey G. Cowell was born around 1953. Not much is known about his early years, except that he tended goal in two national high school hockey championships. He went on to attend the University of Chicago in 1971 and obtained a bachelor’s degree in economics in 1975. In college, he met and became friends with Stephen Muka in a computer programming class. Cowell had a keen interest in business, and the two discussed possible ideas for a venture. However, Cowell decided to enroll in graduate school at the University of Rochester in New York in 1975. The following year, he became disillusioned with school and went back to Chicago.

Cowell became an industry leader with his firm, U.S. Robotics, which was later bought out by 3Com. Business Week named him one of the top 25 managers in 1995, and Crain’s Chicago Business honored him as executive of the year in 1996. Other awards he has received include the High Technology Advocate and Inventing America’s Future awards from the American Electronics Association; the Illinois High-Tech Entrepreneur of the Year award from KPMG Peat Marwick; and Entrepreneur of the Year from Venture magazine. In addition, the University of Illinois in Chicago gave him the Dean’s Award and elected him to their Entrepreneurship Hall of Fame.

Cowell’s range of service, besides as vice chairman of the board for 3Com, includes the board of directors for Northwestern Memorial Hospital Corporation, the Illinois Coalition, and the Chicago Public Library Foundation. He is on the board of trustees for the Illinois Institute of Technology, the Field Museum of Natural History, and the Golden Apple Foundation. In addition, he sits on the boards of May & Speh and System Software Associates, and owns and operates a number of privately-held companies.

Career Details

In 1976, after leaving graduate school, Casey Cowell contacted his friend Stephen Muka and got serious about their dream of opening a business. The pair called on friends Paul Collard, Stan Metcalfe, and Tom Rossen, and the five men cofounded U.S. Robotics. It was named after a company in the Isaac Asimov novel I Robot. They set up shop next to a ballroom dance studio in a 400-square foot room without any windows, above an army surplus shop on Chicago’s Lincoln Avenue. With little experience, the founders taught themselves how to solder parts and organized delivery and setup of their product.

The U.S. Robotics shop originally developed an acoustic coupler, a primitive version of a modem, which allowed computer users to patch into mainframes from home using telephone lines and a television set. Though they ran into technical problems, they continued their research, and eventually started making modems. At first, the device was a clunky black box almost as large as a milk crate that connected to a telephone with clumsy-looking rubber pieces, but by the beginning of the 1980s, they had streamlined them to plug right into a phone jack. In the company’s early days, Cowell functioned as the business manager when their initial customers included computer dealers and university computer labs.

Meanwhile, the fledgling company suffered financial setbacks while Cowell and his friends moonlighted part-time as computer programmers to pay the bills. Once, they sent a package to a customer C.O.D. but accidentally addressed it back to themselves, and could not gather the cash to retrieve it from UPS. The company took a detour for a bit when they ventured into the business of distributing computer terminals, but found no success in that, either. When personal computers (PCs) took off in the 1980s, Cowell started selling to manufacturers like IBM, Apple, and the former Commodore.

Eager to step up production, Cowell convinced Mesirow Financial, a venture capital firm in Chicago, to invest $1.8 million in U.S. Robotics. The timing was perfect: PC sales boomed from the early 1980s to the early 1990s, and the company supplied private-label modems to the computer makers. Cowell was already considering branching out and establishing U.S. Robotics as its own superior brand name when a sudden industry slowdown made it necessary to make difficult business decisions. He laid off 75 of the company’s 275 workers and approached Mesirow for funding for a new project.

Cowell’s idea proved fruitful. Instead of buying software to run their modems, U.S. Robotics began developing it themselves. This made it possible to run the devices on virtually any computer, and it kept costs down, which made their products more competitive. To help focus on this new direction, chairman and CEO Cowell hired a product development whiz, a chief financial officer, and a marketing director. These three newcomers helped replace the original founders of U.S. Robotics; Muka died of complications from Hodgkin’s disease in 1985, and the other three founders had left in 1978 to follow other paths.

By 1990, U.S. Robotics had achieved approximately $60 million in sales annually. Cowell set the lofty goal of reaching “5 by 5,” that is, sales of $500 million by 1995. In 1994 he told Gary Samuels of Forbes, “People have been trying to figure out when we are going to stumble. Especially given that so many of our competitors have stumbled.” With a three-tiered effort reaching into business computers, home buyers, and large corporate customers, U.S. Robotics reached sales of almost $1 billion by the target year, nearly double its stated goal.

Cowell then set his sights on the $5 billion mark in sales by the year 2000. In 1997, three years before Cowell could realize his new goal, networking giant 3Com bought out the Skokie, Illinois-based U.S. Robotics for $7.3 billion. Since the buyout, Cowell acts as vice chairman for the board of 3Com, but it is not clear if his generous compensation as CEO of U.S. Robotics continues. In May of 1997, the Chicago Tribune reported that Cowell was the highest paid CEO out of the top 100 publicly traded companies in the Chicago area, with annual salary, stock options, and bonuses totaling close to $34 million.

Social and Economic Impact

Although there are other modem producers, “No company symbolizes the dramatic advances in modem technology more than U.S. Robotics,” according to Alan Stewart of Communications News. “And no executive articulates his vision with more enthusiasm than U.S. Robotics’ President and CEO, Casey Cowell.” Cowell was one of the first to foresee PCs as communications tools, and he worked diligently to increase the speed at which data could travel, thus improving the technology greatly. Under Cowell’s direction, the firm also slashed prices of their home PC modems in half in 1993, from $520 to $260, opening up the market to a much greater number of buyers. By 1997 U.S. Robotics sold 40 percent of all modems in North America. That year, when they were bought out by 3Com, they became part of a giant conglomerate that employed 13,500 people around the world.

Modems have had a major impact on both business and personal communication in the late twentieth century. They make it possible for computers to connect to each other, allowing people to send data in the form of words, pictures, even video clips, over telephone lines or cable. Businesspeople can share entire databases with an office across the country, and apartment hunters can take virtual walks through model apartments online. People around the globe can hold real-time written conversations in “chat rooms,” or actually speak to one another “faceto-face” by holding video conferences. Thanks to modem technology, a wealth of information and entertainment is available via the World Wide Web, to which more and more people have access each day.

Chronology: Casey G. Cowell

1953: Born.

1975: Received B.A. in economics from University of Chicago.

1976: Cofounded U.S. Robotics.

1996: Named Executive of the Year by Crain’s Chicago Business.

1997: U.S. Robotics merged with 3Com.

Along with being a boon to business, education, and consumer information, modems have also led to an online pornography industry, unscrupulous business practices, and crime. The world continues to struggle with regulating this powerful technology which is in its infancy. However, Cowell sees even more potential in the field of modems that may bring the world closer than ever to the futuristic world depicted in films and television shows of old. He told Crain’s Chicago Business that modems may eventually have household appliances talking to each other: “I can imagine a world in which your alarm clock tells your coffee pot when to start and tells your garage door to open.”

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