Son of Tesla!
By Bill Moore
The Transylvanian region of Romania is home to many legends: Count Dracula, Mary Shelly's Frankenstein, and a not unpalatable Pinot Gris. It is also the former home of one Andras Fazakas, now of Budapest by way of Sweden.
The first time I met Fazakas, who had fled from Ceausescu's Romania with his demure wife, was a luncheon here in Omaha. I asked him what he thought of Nikola Tesla, who prior to coming to America had also lived in Budapest. He smiled and through a thick eastern European accent -- he speaks eight languages -- said something to the effect that Tesla was a great man with brilliant ideas, some of which I suspect helped mentor and inspire the chain-smoking Romanian.
I had been invited to meet Fazakas by a long-time acquaintance, Charles Hoffman, himself a 1976 graduate of Stanford University's Business School and a successful entrepreneur who had taken the Romanian under his wing -- not an easy task with a skittish inventor who grew up under a brutal and repressive dictatorship.
That luncheon was several years ago and in the intervening time, Hoffman and his investors thoroughly vetted Fazakas' fast charge technology, established a solid business relationship with battery maker EaglePicher and lined up their first industrial client, Taylor Dunn. Now Hoffman is ready to raise the curtain on his private venture capital drama and talk on the record about his company's new fast charger and the people behind it.
I should add this caveat for my readers: I've known "Charlie" Hoffman for probably twenty years, though for a period time, we lost touch. Over those intervening years I kept hearing rumors that he was somehow involved in something to do with electric vehicles. But, strangely enough, it would be a telephone call from Switzerland that would reunite us and lead to that luncheon with Fazakas in west Omaha .
James Amann, a fellow Stanford alum and friend of Hoffman's, had tracked me down through EV World all the way from Switzerland, where he lives When he saw that the web site was located in Nebraska, he decided to get in touch, not realizing that I knew Hoffman. It took me about one minute to make the connection and within a week, Hoffman and I were having lunch at Charleston's, an upscale eatery on West Dodge Road across from famed Boys Town. It was during that initial luncheon that Hoffman briefed me on the concept behind Fazakas' wonderfully elegant and simple circuit, but more on that later.
Since leaving Stanford, Hoffman has made a comfortable living finding inventors with good ideas and helping them bring them to market, including the very first electronic bomb detection technology.
"We built some prototypes and sold those. That got me hooked on trying to find technologies that make a difference," he told me. It also created in him a "passion" for working with "crazy inventors who can think horizontally and not just vertically".
That passion led in the early 1980's to the "classic" Silicon Valley garage inventor who had a promising new polymer technology that would become the core of all modern time-release, encapsulation products for drug delivery. That company -- then called Advanced Polymer Systems -- went public in 1987. Tired of the constant weekly commute between the business in California and his home in Nebraska, Hoffman sold the company, which has since changed its name to Pharma and grown into one of top fifteen drug delivery companies in the world.
Hoffman sees himself a modern day "matchmaker," of sorts, who after gaining the inventor's trust, helps arrange marriages between inventors and investors. He commented that most inventors -- especially the ones with whom he typically works -- haven't the business acumen or necessary contacts to take their inventions commercial, especially if the inventor is a Romanian refugee living in Budapest, Hungary, a third of the way around the world from the Great Plains of Nebraska.
"Almost every inventor I've met is incapable of (fulfilling their dream on their own), and I am incapable of coming up with a novel idea on my own," Hoffman said, "but the combination seems to work well..."
Six Degrees of Separation
"Life is all about connections, " he replied when I asked him how a technology matchmaker in Nebraska ended up nurturing an engineer in Hungary.
As Hoffman relates the story, it was Amman, who was then the head of MCI in eastern Europe and based in Budapest, that put him on to Fazakas. Amman and Hoffman had worked in the same restaurant together as they helped pay their way through Stanford University in the 1970s, Hoffman as a waiter and Amman as a bartender. Hoffman would hire Amman as his sales manager when he founded Advanced Polymer Systems in 1984. The affable Amman would eventually end up in Europe where he continued to nose about for interesting new technology.
Despite their long-standing friendship, it would take Amman nine months to convince Hoffman to fly to Budapest to meet Fazakas. It would literally takes months more to earn Fazakas' trust and about a million dollars to verify the legitimacy of the technology.
Hoffman told me that on his first visits, he saw batteries charged in record time, including those he had brought along from the USA and was able to bring back to this country for independent analysis. "These were small batteries, lithium ion, nickel metal hydride, 1.2 amp hour-kind-of batteries."
Hoffman considers Fazakas as a "man of towering intellect," who not only speaks eight languages but has read thousands of books, including at least one on baseball. The Fremont, Nebraskan likes to recount how the inventor called him one night at 3 AM to report that he'd had a great new idea, but had been "thrown out at third."
"Okay, I'll bite," Hoffman replied wearily to his new friend in Hungary where it was nearly noon. Fazakas explained that he knew Charlie was from Omaha, so he'd read a book about Warren Buffet, whose hugely successful investment business -- Berkshire Hathaway -- is headquartered just a few blocks from where I office. In that book, Fazakas had learned that Buffet and some other local investors had bought the Omaha Royals, the AAA farm club from the Kansas City Royals. So, after learning this, the Romanian native decided to read a book on baseball. From that he learned the concept of almost making it to home plate, but getting throw out at third base; meaning his idea had looked very promising at the time, but didn't quite work out.
"That's good," Hoffman replied sleepily. "Now read a book on time zones!"
Eventually, Fazakas would not only learn not to call America between midnight and six AM, but would allow Hoffman to gradually, as he put it, "peel the onion" of Fazakas' technology. It would take moving the inventor and his wife into better living quarters, building them a laboratory and hiring a patent attorney -- at the cost of something like one million dollars over a year and a half -- virtually all that time without a formal agreement -- before the onion was peeled and a deal was struck. Hoffman admitted that this was not the normal way he does business, but it was the only way to build his friend's trust.
Clearly Hoffman is no fool, though he readily admits he hasn't a technical bone in his body. "But I do know what I don't know," which means he is smart enough to hire people that could vet the technology, including conducting a thorough, US patent search that alone cost $50,000.
No Prior Art or Algorithm
Eventually, after independent analysis of the invention and the completion of some expensive market studies, Hoffman was convinced that what Fazakas had discovered and engineered was for real, always an uncertainty in a business littered with the corpses of fraudulent claims and immolated investors.
For my long-time friend, the final confirmation came when the US Patent Office issued the first patent, citing no prior art, in just six months time. "That will tell somebody, alone, that this is a unique approach," he told me, emphasizing that "this isn't an algorithm."
"People have tons of algorithms in the rapid chargers that are out there now." Instead, the heart of Faztech -- which clearly seems to be an illusion (and tribute) to Andras Fazakas -- is an incredibly simple "ping-pong" circuit, at least that's how I describe it, though Hoffman's explanation is perhaps a bit more illuminating.
"He is able to produce a circuit that pulses into the battery, and if the battery doesn't want to accept the charge, all of the charge or any of the charge, it will sluff it off. Then the charger adjusts to that condition, and up to several hundred times a second without microprocessor interference, pulses back into the battery.
"What his charger does is create an equilibrium between itself and the battery," he continued. "At that state, you can transfer the most power into the battery. We have microprocessor control for temperature measurement, voltage runaway, etc., all those good things, which you have to have, but the intrinsic circuit just pulses back and forth with the battery and establishes an equilibrium.
"I've seen him put eight amps into a one amp lithium battery that will explode if pressed. That just can't happen under normal circumstances. He has a unique pulsing circuit that is not reliant on microprocess control."
In Hoffman's opinion, reliance on microprocessors only slows down the charging cycle. "You're going to wait a second or two to get a decision back on what the condition (of the battery) is..." and in that time, you can find the battery falling into a runaway voltage situation that can damage the cells.
In their testing, and that by EV maker, Taylor Dunn, batteries recharged using the Fazakas circuit simply do not overheat, a risk that accompanies any fast charger system. "They've noticed that their electrolyte loss is less with our 85 amp, 3kW charger than with their 25 amp standard charger.
Penetrating the Fog of Skepticism
With his FazTech technology vetted and the inventor happily inventing away, Hoffman's next challenge was to penetrate the thick fog of skepticism that seems to envelope the electric vehicle industry. Just as the bomb detection and pharmaceutical industries were largely unknown to him when he got into them, so too was the EV world. What he discovered very quickly, however, was perhaps more than either of his previous ventures, the EV business has been promised many things over the decades, far too many of which haven't been delivered, particularly on the battery side.
"I understand it now, " he confided. "I've seen people announce they're going to put fast chargers on the market two years ago, five years ago, and they're still not here. It's just a difficult area, fraught with failure and unfulfilled promises."
So how do you convince a respected EV maker like Taylor Dunn to take your claims seriously when you're tiny, virtually unknown company from Nebraska -- long-time manufacturer, Lester Chargers are located about 50 miles away in Lincoln -- with no track record and questionable technology?
You find a big brother in the form of military and aerospace battery maker, EaglePicher.
The Eagle Has Landed
Not well known in the consumer battery arena, EaglePicher -- which has its main manufacturing plant in Missouri and corporate headquarters in Phoenix, Arizona -- is a respected government contractor who has now set out to remake itself into a more consumer-oriented company.
According to Hoffman, the EaglePicher battery on the Voyager spacecraft -- the first man-made object to leave our solar system -- continues to work after 29 years. NASA finally replaced the EaglePicher battery on the Hubble Space Telescope after 14 years continuous operation. The original specification was for ten years.
"They have a tremendous reputation for quality," he emphasized. "They were locked in the military contracting world and were bankrupted in the asbestos trouble because they provided asbestos to (Navy) ships in the 40s."
An $800 million-a-year company, it was bought by a European group and organized out of bankruptcy to refocus their efforts from strictly military contracts to consumer products. It was again serendipity, Hoffman recounts, that brought tiny FazTech and EaglePicher together beginning with a chance meeting in a Starbucks coffee shop northern California, which Hoffman recounts in Part Two of the MP3 audio file at the right.
From his perspective, the match up has been ideal and at the same time absolutely extraordinary -- "like turning the Queen Mary down a bowling alley of your strategic plan." In exchange for rights to the technology for what is essentially the middle of the electric motive power market -- from Taylor Dunn-class cargo carriers to electric lift trucks, EP -- as it is also known -- is now providing what Hoffman calls the "heavy lifting." It has supplied both the capital and expertise to take FazTech's technology to market.
To get some sense of how determined EP was to nurture the relationship, within a week of the chance meeting between Hoffman's VP of business development -- Don Vogt, one of Silicon Valley's founding venture capitalists -- and the former chief of engineering for HP who was also the chief technology consultant for EP, the Missouri-based company sent their lead engineer to FazTech's annual meeting to give a two-hour presentation on EaglePicher's technology. It was at the luncheon following that presentation that I first meet Fazakas and his wife.
EP began testing Fazakas' circuit in the summer of 2002, finally signing a joint development and marketing agreement late last summer.
Hoffman, perhaps more than anyone else, appreciates the fortuitous nature of that coffee shop meeting -- and just plain damned good luck -- that has brought his enterprise to the point it is now. "You want to sound smart. Stanford MBA and you got everything figure out. No. It's so much luck that you can't believe."
He observed that he's played his metaphorical "cards" close to his breast, deliberately avoiding knocking on doors so as to not end up giving the technology away to what the industry has come to call "vulture" capitalists who say, "Give me all your technology, everything you think and do, and I'll get back to you." He added that EaglePicher not only respects intellectual property, but have given him direct access to senior management, something he realizes he would never have gotten with a company like Honeywell.
Sleepless in Budapest
Hoffman calculates he's made over fifty trips now to Hungary, so I asked him what its like doing business there. He replied that its a lot like the United States was 40 years ago. There's lots of vitality and forward thinking. Hungary is now part of NATO and is slated to join the European Union and adapt the Euro as its currency.
"There are more Nobel Prize laureates per capita in Hungary than any country in the world," he noted. "They've been cut in half three times, I think. It was the Austro-Hungarian empire. They have a national holiday celebrating a major military defeat. They've got this funny, pessimistic, but incredibly intelligent technology. We have engineers who are calling the inventor at 11 o'clock at night to see if they can go home (after putting in a 15 hour day)."
Hoffman says that once you win their trust, the flood gates of creativity and opportunity swing open. "I will never do another deal again that doesn't come out to Hungary," he said "because I've got stuff that's coming like crazy, but it took probably three years to get to that point."
Turning back to the EaglePicher Faztech charger, the very first product that the company will be unveiling at the MHA's Materials Handling show in Cleveland next month will be a 36-volt charger for lead acid -- both sealed and wet -- batteries. This will be followed in quick succession by 24-volt and 48-volt models.
"We're fairly voltage specific at this point," he noted, "but that's changing." The company has in development prototype chargers for all the major battery chemistries from lead-acid to NiMH to lithium-ion and lithium-polymer. While a single FazTech's charger can charge any type of battery, it can't do so optimally, as yet. The charger needs to be engineered for a specific battery chemistry and voltage to fast charge at the optimal rate.
Eventually, Hoffman hopes to see the creation of a battery recognition system, perhaps a bar code that gets read automatically, that allows the charger to adjust itself to meet the optimal needs of that particular chemistry.
But for now, FazTech and EaglePicher are delighted to have one of the world's largest electric vehicle makers -- Taylor Dunn -- as their first customer for their 36-volt fast charger, for whom they specifically designed their first commercial product, and it is at this point that I played a small role in bringing this meeting together.
Hoffman had asked me what trade shows he should attend and I encouraged him to attend the then-EVAA annual conference that was held in Sacramento in 2001. He not only attended -- along with Amman and Vogt and Fazakas, but he signed up as an exhibitor whose booth happened to be right next to Taylor Dunn. It was here they met the EV-maker's chief operating officer. They struck up a relationship that eventually blossomed into a contract.
What attracted Taylor Dunn to the FazTech system was the fact that it could recharge one of its Burden Carriers, which are typically 36 volt systems, in anywhere from two and a half to four hours depending on what is considered a full-charge. Hoffman explained that most of the chargers in this market niche take from 8 to 16 hours to recharge. According to the Nebraska native, Taylor Dunn is a very conservative company whose largest charger is 25 amps, but they are now willing to move up to the 85 Amp, 3kW FazTech charger, suggesting they are very comfortable with moving into fast charging using Fazakas' discovery.
"We've had a charger there on test since September (2003) and it performs like a champ: no off-gassing, less electrolytic loss than their 25 Amp charger, observing very rapid charging times, even reviving batteries that have been inactive for 18 months, getting 100 Amp hours into them the first charge, 150 the second, 200 the third. These are Trojan and Exide 180-240 Amp hour batteries."
Challenging the Gold Standards
I asked Hoffman how his technology stacks up against the completion in the fast charge field. He told me that he considers Aerovironment's Posicharge, Baker-Wade and Edison MinutCharge are the "gold standard" for fast chargers. He said they have huge machines in the multi-kilowatt range and the EaglePicher/FazTech 3kW unit is the little fast charger "that could."
He commented that as he understands it, these premium power units aren't really suitable for the 36-volt, Taylor Dunn-type segment of the market his charger was built to accommodate. He noted that Taylor Dunn chose to not go beyond its 25 Amp charger guidelines because they believe that doing so risks damaging the batteries, even though 30 and 40 Amp chargers available.
"We're comfortable competing in the one, to three, to nine kilowatt range," he said, adding that Faztech's architecture lets it "finish" the charging cycle better than the larger competitors. "The same charger that's putting in 85 Amps in to a battery, we'll drop down and put a two to three Amp flow charge at the end very elegantly, and the batteries seem very happy. We see, and Taylor Dunn has observed, an increase in useful amperage output of the battery of ten to twenty percent when fully charged."
Beyond the industrial mobility market, Hoffman sees opportunities in marine applications of 1-3KW chargers for small boats and in the burgeoning auto parts store market where his charger can handle a far wider range of batteries and conditions than currently available.
Finally in the Comfort Zone
Having known that Hoffman has been working on the venture for a number of years now, I asked him if he was finally comfortable with his decision to invest his time and money, as well as that of his backers, in this enterprise.
"Oh absolutely, absolutely. I have been for several years," he immediately responded, "but when I signed the deal with EaglePicher... I mean these people are serious, and (they) did tremendous due diligence. We went though a number of hoops and they clearly see the market opportunity and are putting millions of dollars behind it.
"You know, as long as we were just a small company with a Fremont, Nebraska office, a Hungarian inventor and a little lab in Budapest, you had to wonder. But an $800 million company has made a major bet on this technology..."
A bet that sounds like it is going to pay off big time, in large part due to the Amman's insight, Hoffman and Vogt's contacts, EaglePicher's vision, and the most importantly, the inventiveness of one Andras Fazakas, the "son" -- in spirit, at least -- of Nikola Tesla.
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