Kaplan an entrepreneur of a different stripe

March 15, 2004

BY MICHAEL KRAUSS

From a childhood in East Rogers Park, Ed Kaplan, CEO of Vernon Hills-based Zebra Technologies, grew up to become one of Chicago's most successful technology entrepreneurs. With a recent FDA ruling requiring computer bar code labeling on most prescription drugs, Kaplan might soon help prevent the estimated 7,000 annual accidental hospital deaths resulting from medication errors.

"The statistics are staggering," says Kaplan, 61. "You have the ability to save lives and lots of money," he adds.

According to the FDA, "the bar code rule, once implemented, will result in 500,000 fewer adverse events over the next 20 years." It will also eliminate an estimated "$93 billion in patient pain, suffering and extension of hospital stays."

Kaplan's company stands poised to prosper from the new FDA initiative. Anyone who becomes ill and visits a hospital is likely to benefit.

Blazing trails; bucking trends

Kaplan continues to blaze trails as a visionary, yet pragmatic, entrepreneur. He's delivering a record performance for his investors. He's successfully bucking trends. He's broadening his company's product line while simultaneously paving the way for a future generation of Chicago-trained entrepreneurs.

Kaplan launched his entrepreneurial career here in 1969, founding Data Specialties Inc, a manufacturer of high-speed electromechanical products. He changed the company's direction to on-demand ticketing and labeling systems in 1982, rechristening the company Zebra Technologies Corporation in 1986.

He took the company public in 1991.

Today Zebra is at the cutting edge of electronic bar code labeling technologies. Zebra manufactures bar code label printers, receipt printers and related software and solutions, generating net sales of more than $536 million in 2003, up 12.8 percent from the previous year.

Pass through a wireless checkout lane at Wal-Mart, return your car at Hertz or buy a ticket at the London Eye, and your receipt might be printed on Zebra's equipment. Kaplan's company sells to 90 percent of the Fortune 500 companies and his products are offered in more than 90 countries.

Not bad for a fellow who attended Hayt Elementary School and Senn High School on Chicago's North Side.

Investing in the downturn

In 2001, facing his first down year since going public, Kaplan "decided not to do what 95 percent of companies do." He increased spending.

"We spent on market development activities, new products and geographic expansion," Kaplan says. "In the middle of 2002 things started to turn. By 2003, every quarter was better. We zoomed thru 2003 with very positive numbers. Our competitors got weaker and we gained share."

As a result, Zebra's stock price soared to a 52-week high of $72.84 early last week before the market correction drove prices down. Last April, Zebra traded near $38.

Today Kaplan focuses on three areas: mobile wireless technology, RFID technology and business improvement applications. He's looking to apply his bar code printing and labeling capabilities to any industry where he can improve performance. Health care is his prime example.

Developing future entrepreneurs

Kaplan's a major donor to entrepreneurship programs at the Illinois Institute of Technology and the University of Chicago, where he earned degrees.

"Ed supported the creation of a business plan competition in 1996, well before it was fashionable," says Ellen Rudnick, clinical professor of entrepreneurship at the University of Chicago Graduate School of Business. "Over 30 new business ventures have been launched from this program."

Kaplan readily recalls his Chicago youth. As a boy of five, he routinely visited his father's furniture factory, learning to operate each of the machines. By his teenage years, he was investing in the stock market. Anticipating the potential of color television, Kaplan bought shares of Zenith and Motorola, doing "quite well," he relates. He credits his early investing skills with generating the seed capital for his entrepreneurial ventures.

Kaplan's only concern: "New business growth in Chicago in the technology area is pretty much non-existent. We educate an awful lot of people. Yet for some reason the companies that get spawned, don't get spawned in Chicago." Maybe some enterprising student at Hayt, Senn, IIT or the U. of C. will pick up that challenge.


Michael Krauss is a Chicago based tech writer and consultant, and senior vice president for Hostway Corp., Chicago.

 

 ©2004 Marion Consulting Partners