A measure of success

After a bumpy start, Ocean Optics of Dunedin has passed the acid test of entrepreneurship with its myriad devices.

[Times photos: Libby Volgyes]

Mike Morris, president of Ocean Optics, peers through a color wheel, that was made in Largo, used in digital light processor, or DLP, televisions. It’s one of products the company is turning to for diversification.

Ocean Optics founder Mike Morris envisions myriad uses of his company’s palmsize spectrometer, from tracking a pool’s chemistry to telling a dishwasher how much water is needed to rinse the dishes.

Making measurements with light Click for graphic

DUNEDIN - In Mike Morris' home of the future, an Ocean Optics device changes the colors of the bedroom walls from sunrise yellow in the morning to serene aquamarine at night. Another device keeps track of the pool's chemistry. Another, tucked in the dishwasher, sends just enough rinse water over the glasses to get them clean.

"Is it necessary?" asks Morris, founder and president of Ocean Optics. "No. Is it fun? Why not?"

Anyone tempted to laugh at such uses of Morris' gadgetry might want to think twice. This is a guy who started a company 14 years ago with a pH sensor for home aquariums. This year, Ocean Optics expects sales to rise 35 percent to nearly $23-million, most of that from sales of the company's miniature spectrometer, which splits light into a rainbow of colors to test for a variety of properties.

The Dunedin company's spectrometers originally were designed by Morris to test the pH in sea water. But the device was a thousandth the size and a tenth the cost of traditional spectrometers so uses quickly proliferated.

Scientists at corporate research and development labs and teachers at universities everywhere suddenly thought of thousands of ways to put the $3,000 instrument to use.

Today, Ocean Optics' spectrometers and related devices are used to measure everything from the amount of air in the top of potato chip bags to damage in copper pipes at a nuclear reactor to ultraviolet patterns in bird feathers. The company's spectrometers have been put to use on the Mir space station, in the Amazonian rain forest and on the slopes of a Nicaraguan volcano.

The Army has contracted for a backpack-size device being developed by Ocean Optics that will identify potentially hazardous materials, whether acid or anthrax, from a safe distance using an infrared laser and spectroscopy.

The Air Force wants to use Ocean Optics' sensors to track oxygen buildup in jets' fuel tanks. The sensors would control a system that replaces oxygen with inert nitrogen, preventing accidental explosions.

Though spectrometers and related instruments accounted for $15-million of Ocean Optics' $17-million in sales last year, Morris is encouraged by the growth of its optical filter division, started in 1999. The layered glass filters, made in Largo, have been used to create crisp images in everything from high definition TVs to the virtual scenery projected in Disney theme park rides. Another big customer: stage lighting companies, including the ones responsible for the kitschy spotlights on Who Wants to Be a Millionaire.

Morris, 52, sees no end to possible applications for Ocean Optics' product line, which grows at the rate of one new item a week. A former college professor who still prefers jeans and sneakers, Morris said his business is driven by a constant stream of calls from R&D tinkerers with problems to solve.

After Ocean Optics introduced a product recently that measured moisture in soybeans, his company's engineers got a call from a scientist who wanted to know how to take such a measurement while the soybeans were flying by in a chute. Done.

"If you're flexible and clever, you can respond to anything," he said. "There are lots of problems that need to be resolved. It just comes down to a lack of time, money and people."

Morris, who started his business in his kitchen, knows what it's like to nearly run out of money. His mother, Marguerite Morris, was his first investor, putting $10,000 and a lot of faith in her son's business.

"I'm a first-generation entrepreneur," he said. "My parents were Depression-era people who thought you got a good salaried job and held on to it for life."

Morris' mom was a homemaker, his father was in charge of buildings and grounds for a school district outside Philadelphia. Morris got a bachelor's degree in biochemistry from Rutgers University, then headed to the University of South Florida to get a master's in marine science.

In school, Morris had stumbled on a way to determine the acid or alkaline content of water, known as the pH, with testing paper coated with a permanent indicator dye. Before that, researchers used electronic pH testers, which were not as precise or convenient, or old-fashioned testing papers that could be used only once because the dye faded.

Unable to find a commercial application for his discovery, Morris took a job at USF's office of technology transfer, promoting inventors. After four years, he took the plunge and went into business for himself, using his invention in a home aquarium water meter called the pHish Doctor.

Though a Texas distributor was soon selling thousands of the little devices, Morris was making only 50 cents on each one. On the hunt for something better, he came across a request from the Department of Energy for more efficient ways of testing the pH in sea water. Morris, who once spent 42 days on a ship testing sea water, knew exactly what the Energy Department wanted.

Working with his former professor at USF and two other experts, the group won a $500,000 federal grant to develop a prototype in 1989. Unable to find a spectrometer small enough to fit into their pH-monitoring instrument, they built one. By 1992, Ocean Optics had introduced its miniature spectrometer to the commercial research and development market.

Family and friends stepped up for the first round of major financing in 1993; a second round came through colleagues, customers and distributors in 1999.

In mid 2000, Morris started trying to interest investment bankers in taking his company public. Since telecom was the buzzword du jour, he recast Ocean Optics as part of that wave. Though telecom accounted for only about 5 percent of its business, the company's spectrometers were used to monitor and diagnose the intensity of wavelengths on telecom companies' fiber optic lines.

Despite Morris' efforts, he said investors never understood his business, criticizing it as too diversified. The IPO effort went nowhere and a planned factory in Oldsmar, to serve the telecom market, never materialized.

Snubbed by Wall Street, Morris turned his attention back to Ocean Optics only to discover profits had disappeared while he was distracted. "In a small company, everything can be going along fine, but when you take your eye off it, suddenly it isn't," he said.

An acquisition, one of several planned, began losing money instead of adding to the bottom line. Then, in early 2001, his longtime bank decided to call Ocean Optics' loan even though the company was current on its payments.

"I didn't think they could do that," said Morris, who was told the move was motivated by the bank's change of marketing strategy. "I really thought we were going to lose the business."

Luckily for Morris, another bank stepped in, allowing him and his crew of about 100 employees to keep cranking out spectrometers and customized accessories such as special fiber optic cables and aluminum probe holders. The bursting of the telecom bubble only reinforced Morris' gut feeling that focusing on a single industry was foolish.

"Niche marketing is glitch marketing," Morris said. "Telecom is my favorite example of that."

Ocean Optics keeps stretching its customer base by hauling its instruments to more than 70 trade shows each year on topics from art restoration to homeland security.

"We've got different signs and different experiments for every show," Morris said. "It's all about getting the technology out in front of people. Then, when they ask what our spectrometer can do, we tell them, "Everything.' "

While he wants to extend Ocean Optics' sales worldwide - he has a wholly owned subsidiary in the Netherlands to promote European sales - Morris wants nothing to do with the trend in transferring manufacturing overseas.

Burned by vendors in the late 1990s who were too busy chasing telecom business, Morris brought the manufacturing of all parts for Ocean Optics' equipment in-house. Fiber optic cable is formed from glass at the company's plant near Sacramento, Calif. The Orlando plant makes the spectrometers. At its Largo facility, a $1-million machine layers colors on glass to create optical filters. Today, the company has about 106 employees, including 65 in Pinellas County.

"A lot of value of the company is in our manufacturing know-how," Morris said. "Once it's overseas, it's gone."

Now that business is booming, Morris wants to shake things up. He's toying with the idea of creating a new kind of marketing program that would encourage entrepreneurial techies with a flair for sales to develop new applications for Ocean Optics' products.

"It might involve using our instruments to grade gemstones, in the home decorator market or in architecture," said Morris, who is astonished to see so many well-educated professionals out of work. "I'd give them a discount on our technology and they could start their own company with a business card and a phone. What do they have to lose?"

Morris also is considering selling the company. His early investors want an exit strategy. Greater access to capital would push developing projects ahead faster.

"There are a couple of active verbal offers," said Morris, who puts the chances of sale at about 50-50. "We want help developing new products and new markets."

Meanwhile, Morris keeps spinning out dreams, of using Ocean Optics' devices to find arsenic in playground equipment or traces of depleted uranium in soil or simply changing the color of bedroom walls.

- Information from Times files was used in this report. Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.