Ben Franklin “Alum” Company’s Journey from the Kitchen Table to the NASDAQ Exchange!
YORK, PA – In the early 1990’s, a small company founded in York, PA, called Turtle Beach Systems, approached Ben Franklin’s office in South Central Pennsylvania, for funding. Roy Smith and his partner, Robert Hoke needed the money to help bring a digital audio recording system to market. Turtle Beach’s innovation gave personal computers the ability to record and play back high-quality sound, and their 56K Digital Recording System allowed recording studios, radio stations, and film producers to record and edit CD quality sound – which was a “first” then.
Roy Smith commented, “At a time when there was literally no infrastructure to help technology startups in our area, Ben Franklin’s support of Turtle Beach was key to our success in launching our product. Local banks would not meet with us and venture capitalists would not drive from New York or DC to talk to us.”
With the successful commercialization of the 56K under its belt, Turtle Beach began developing its first PC sound card called “MultiSound” and soon attracted a buyer, Integrated Circuit Systems (ICS). The company made clock chips for the PC market and wanted to broaden its market to include the new multimedia chips and peripherals. With the addition of ICS’s resources, Turtle Beach was able to offer a full line of PC accessories and released eight new products within the next 18 months.
“We had about 12 employees at this time and grew to 65 before the company that bought us moved the business to California. We were generating about $16 million in revenue.” – Roy Smith
As often happens with corporate acquisitions, the original founders left the company when the operations were moved to San Jose, California in 1996. ICS ended up selling Turtle Beach to Voyetra Technologies who subsequently sold millions of sound cards to Dell Computer under the Turtle Beach brand. In 2001, Voyetra Turtle Beach developed one of the first stand-alone Internet audio receivers. The device enjoyed tremendous success in the first year of its release, but was soon faced with tremendous competition from similar products. The company re-grouped and decided to opt out of the network audio market.
Turtle Beach diversified its product line to include USB audio devices, video-capture products and a wide variety of headphones, including the Ear Force line of multi-channel PC and gaming headphones. Their products include headsets for current and previous generation consoles of Xbox and PlayStation, and they also sell headsets compatible with PC/Mac, mobile platforms and Nintendo consoles. These are not your ordinary headsets. They are all designed for two-way communication for those who want to speak with their fellow gamers in multi-player games.
So, where is Roy Smith and the company he and his partner started nearly thirty years ago?
“In September of this year, the company that was literally started on my kitchen table, Turtle Beach, merged with Parametric Sound and is now publically traded (NASDAQ:HEAR). The company has more than a 50% market share in headphones for computer gaming, and recent sales forecasts for 2018 are at $1 billion. When we went to Ben Franklin for help, I knew we had a good product, but I never dreamed the company would someday end up being traded on the stock exchange.”
As for Smith, the kitchen table planning sessions seem like a life time ago. But the then “up-and-coming” entrepreneur turned out to be a successful serial entrepreneur who has started several more companies. After cashing out of Turtle Beach, Roy continued to create new, tech-based startups through an incubator he co-founded, WellspringFV (http://wellspringfv.com). One of their most successful products, appMobi, sold its development tools to Intel in 2013. His most recent company, AgeCheq (www.agecheq.com) developed a cloud-based technology that enables mobile app and game developers to easily comply with COPPA laws that protect the privacy of children online. The Ben Franklin office in South Central, Pennsylvania is still there, and Roy’s latest startup company recently received a $125,000 investment from Ben Franklin. http://cnp.benfranklin.org/newsroom/bftp-news/member-ben-franklin-family-makes-gaming-safer-family/
Ben Franklin’s CEO, Stephen Brawley, commented, “In 1990, when I first met Roy and the Turtle Beach Team, they needed $50,000 in seed money to get their product to market, and they repaid the investment in just two years. To see this company now forecasting $1 billion in sales is gratifying not only to the original owners, but to us at Ben Franklin as well. With his years of business startup experience, I am confident Roy’s new company, AgeCheq (www.agecheq.com), will also take-off in a big way, especially with the FTC’s recent enforcement of child privacy laws in gaming.”
About Ben Franklin Technology Partners:
Ben Franklin Technology Partners/CNP, an initiative of the Pennsylvania Department of Community and Economic Development and funded by the Ben Franklin Technology Development Authority, provides funding, operational assistance, and entrepreneurial support to emerging tech-based companies and small, existing manufacturers for the purpose of creating and retaining jobs in Pennsylvania. Contact the Central office of Ben Franklin in University Park at (814) 863-4558 or see our website at www.cnp.benfranklin.org.