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Who's who: Charlie East

Charlie East has already created one successful niche product, an ATM demonstrator sold by his first company, DSI. The chief executive officer of GTI thinks a through-the-wall machine called the TTW 1000 may be the new niche he's been looking for.

March 11, 2002

Charlie East is a man in search of a niche.

He's already enjoyed success with one niche product, an ATM demonstrator/instant PIN issuer that is sold by Demoteller Systems Inc. or DSI, one of two companies he runs with his daughter Teri.

Charlie East

He hopes to replicate that success with his second company, ATM manufacturer Greenlink Technologies Inc. or GTI.

East created an ATM demonstrator in his garage after his then-employer, Diebold, took a pass on the idea. He recalls pitching the concept to his wife, Carol. "I told her, 'All we have to do is design it, learn how to program it and put our life savings into it.'"

Carol's consent set East on an entrepreneurial path that, even at age 60, he doesn't see leaving anytime soon. "It's been fun, it's been great, and I'm not ready to give it up," he said.

East's upbeat attitude has served him well throughout a life that began with a hardscrabble upbringing in Oklahoma. After enlisting in the Marines at age 17, he was sent to California where the military "slapped me into shape," he said, and where he met Carol and fathered Teri.

The new family returned to the Sooner state, where East studied electrical engineering at Central State College and the University of Oklahoma while working at the Oklahoma Safe Company in the early '60s.

In late 1967, Mosler bought that company and sent East to Dallas, where he designed, built and installed security systems for high-rise buildings. Mosler moved East and his family two more times, back to Oklahoma and then to Ohio, before he asked for a transfer to Dallas in 1972.

"When you've lived in the sunshine of Texas, it's really tough to give it up," he said.

Birth of a salesman

In Dallas, East convinced a supervisor to let him try sales "because sales made more money than the rest of us," he said. He began selling security equipment to financial institutions along with high-rises - often making calls with members of Mosler's ATM group, although he never sold the machines himself.

At one time, East's territory with Mosler covered 24 states. He still has the receipts to prove that he took more than 300 commercial flights in 1975. "It was a phenomenal job," he said. "At that time, the entire Sunbelt was going through an incredible growth spurt - and I was there to enjoy it."

Mosler's ultimately unsuccessful foray into ATMs made an impression on East.

Mosler got into "a philosophical battle" with competitor Diebold over what an ATM interface should look like, he said. "Mosler and some of the other early ATM companies like Docutel thought an ATM should have push buttons telling the customer what to do - the bigger the buttons, the better - rather than a screen."

After this approach failed and Mosler abandoned ATMs, the company embarked on a massive reorganization effort that East saw as his cue to move on. He was hired by Diebold to sell ATMs and other financial equipment in 1983.

An idea is born

The first thing he did was take Carol to First Texas Savings & Loan, where they were issued two brand-new cards. Unfortunately, Carol forgot her PIN on their first visit to an ATM. The couple was told it would take three weeks to get a new one.

That incident, combined with a fateful sales call a short time later, gave East the idea for his demonstrator.

East was taken aback when a bank president in Sherman, Texas tried to convince him to buy back a $65,000 drive-through ATM because customers weren't using it. East was convinced that if customers were shown how to use an ATM, they would visit the drive-through rather than coming into the bank - and the ATM would pay for itself with labor cost savings.

Yet East's bosses at Diebold didn't share his enthusiasm - even after he told them about the experiences of a bank executive named John Chiles. The  president of Tyler (Texas) Bank & Trust took every customer with an ATM card out to his drive-through machine and walked them through a transaction - which resulted in an uptick in ATM usage.

In the first quarter of 1984 - "because they got tired of listening to me," East said - Diebold produced a demonstrator. It was 2 feet tall and made of cardboard.

A business is born

Convinced he could do better, East decided to turn a Commodore 64 computer, a device that seemed almost laughably low-tech a decade later, into a device that looked and functioned like an ATM.

With the help of a programmer named Todd Stine, East produced what he thought was a winner. He quit Diebold in April of 1984 to devote himself to the demonstrator business full-time.

The first customer: John Chiles, the same bank executive who had convinced East his idea was a winner. "He bought serial #1 and we gave him free service for life," East said.

Other customers followed and, in late 1984, East bought 300 Commodore 64 computers from Toys R Us and turned them into demonstrators. "I sold all of them," he said with obvious pride.

Inexplicably, one of the demonstrator's biggest fans was a sales representative from Diebold, who convinced executives there to buy the devices from East. He began making a private-label version for the manufacturer in 1985. "They've sold 8,000 of them for us over the years," East said.

Because he was working so closely with his former employer - "I worked more for them when I wasn't technically working for them," East said - he needed someone else to market the demonstrator to other companies. He asked his daughter Teri, who had just received a business marketing degree.

Though she found the offer "somewhat overwhelming," Teri East accepted, largely because her dad had told her she could accomplish anything if she worked hard enough. "It was like living with my own Zig Ziglar," she said.

Teri, chief executive officer and majority owner of DSI and co-president of both DSI and GTI with her father, said she has never regretted the decision to abandon the idea of graduate school and follow him into business. The partnership made an already close relationship even closer.

"It's an amazing thing to have a business partner you known you can trust completely," she said. "Aside from being my mentor, he's one of my best friends."

Another business is born

In 1996, East met Lyle Elias, an entrepreneur who convinced him to form an ATM manufacturing company, Greenlink Technologies Inc. (GTI). The company introduced its first machine, the T1000, in 1997 shortly after the surcharge-fueled retail ATM boom began.

"We sold a few thousand, but not enough to get ahead of the curve," said East, noting that Greenlink entered the market after Triton and Tidel and, like those two companies, faced stiff competition when Tranax Technologies (formerly Cross Technologies) introduced a lower-priced ATM, the MiniBank 1000, in 1999.

Elias and East tried to find a niche with such unusual concepts as connecting several of the T1000's modules to video poker machines so they could give instant payouts. None of the ideas was a clear winner, however.

In 2000, GTI hoped to capitalize on the market's apparent interest in advanced ATM functionality with its launch of the Merlin, a machine equipped with Internet technology. Yet the response to Merlin wasn't as strong as East had hoped. That, combined with Elias' exit from the company to pursue other ventures late last year, caused East to rethink his strategy.

His plan is to "outlast everybody else in the low end of the market," East said, by producing low-cost, reliable ATMs and improving efficiency. This when competitors such as Triton and Tranax are introducing more advanced machines.

Danny Langston, GTI's national sales director for the past year-and-a-half, believes East's plan is a winner. "He feels there is a still a need to be filled at that low end of the business, and that we can fill it by keeping our costs low and driving them even lower. It's a vision I agree with, and I'm happy to be here with him."

Noting that price erosion seems to be hitting the market hard, Langston added, "We're making money in the low end now where a lot of people aren't."

East is also excited about a new product, a through-the-wall machine called the TTW 1000, because it offers a chance to invade what he calls "the last bastion of NCR, Diebold and Fujitsu."

Based on a positive early reception to the TTW 1000, East said GTI may have discovered its niche. The company will soon introduce a version with a Level 1 vault.

East hasn't forgotten his other company, DSI. New software called Trism will allow financial institutions to use his demonstrators to instantly issue debit cards. He's already lined up his first customer, the Credit Union of Texas.

"You'll be able to open an account and walk out with a live Visa or MasterCard in your hand," he said. "Where we go from here, we don't know. But it will be fun."

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