Amps, Business, and the Innovation Center

There was a story recently about a tenant at the Whitewater Innovation Center that makes a device for controlling a guitar amplifier.

The story’s notable for four reasons: (1) it under-reports the actual cost of the Innovation Center and Tech Park by about half, (2) the current uses of the Innovation Center are so different from the stated purposes of the main federal grant that those uses are wildly odd, (3) the tenant’s product is similar to one that Neil Young created years ago without subsequent market interest, (4) the rent-free deal that the tenant received is a bad idea.

The Innovation Center is a ‘business incubator’ with few actual businesses.

The Cost of the Innovation Center and Tech Park so far.

The story reports this public cost as “$5.7 million,” but that’s nowhere close the cost of a project that received a $4.7 million-dollar-grant and then additional millions in local municipal bonds (debt) to which the City of Whitewater is now obligated. The total cost is over eleven million in public money, not $5.7 million. Reporting of costs in the story conceals the true public expense.

What was this Center for, anyway?

It’s been described along the way variously, as public relations needs have shifted. This was a slapdash effort, where officials took grant money as soon as they could, and then thought up uses (tenants, descriptions, etc.) only afterward. Here’s what the Economic Development Administration proudly declared when the Tech Park Board took a multi-million-dollar grant:

September 7-September 11, 2009
….$4,740,809 to the Whitewater Community Development Authority, the University of Wisconsin Whitewater, and the City of Whitewater, Wisconsin, to fund construction of the new Innovation Center and infrastructure to serve the technology industrial park, including a road linking the project with the University of Wisconsin’s Whitewater campus. The goal of the project is to create jobs to replace those lost in the floods of 2008 and those lost from recent automotive plant closures. The Innovation Center will serve as both a training center and technology business incubator and will be constructed to meet Leadership in Energy and Environmental Design (LEED) green building certification standards. A portion of the project’s cost will be funded through EDA’s Global Climate Change Mitigation Incentive Fund.

This investment is part of an $11,051,728 project which grantees estimate will help create 1,000 jobs and generate $60 million in private investment.

The goal: “….to create jobs to replace those lost in the floods of 2008 and those lost from recent automotive plant closures.”

Here’s what tenant Renwig wants to do:

The founders of Renwig have added robotics to a tube amplifier that allows guitar, bass and piano players to change the volume, tone, gain and equalization of their amps with the press of a foot switch. An initial design features four switches allowing four preset sounds to be used. Future designs could allow for dozens of preset sound changes.

One wishes Renwig well – sincerely — but there are reasonable questions to ask about their venture and their tenancy at the Innovation Center.

Neil Young’s Whizzer.

It was Twain, I think, who famously quipped that the Ancients stole all our ideas from us. If not the same ideas, then perhaps similar ones.

Guitarist Neil Young created something for amps, called the Whizzer, that’s similar to Renwig’s described design. My point is not that Renwig copied the idea, but merely that Neil Young’s idea seems similar — and there’s a market implication to that similarity.

See, from an article that originally appeared in Guitar Player magazine, a description of Neil Young’s Whizzer:

On top of the amp is a Whizzer, a device that physically turns the amp’s knobs. Neil came up with the idea, and Sal Trentino, his amp tech, made the first one. This was a 2 position Whizzer that he used starting on Rust never Sleeps in 1978. The new one was made by Rick Davis in 1991. It’s got four presets that completely control the three knobs on the top of the amp. He locks in the preset he wants, and it will always go back to that particular spot. We find that when you have the volume and tone all the way up, by turning that second volume knob up to about 10, it starts to fade away. But right before it starts to fade away, something else happens, and that has to be in exactly the right position. You can’t breathe on it, or it fucks it all up.

Here are Neil’s Whizzer settings: For the highest volume, we have both the tone and the main volume on 12 and the second volume knob is at about 9.9. When it really compressed and breathing and screaming, that’s whats going on. You can hear it on “Cortez”. If we push it past 9.9 the sound goes away. The next button down moves his volume to 10, which just cleans it up. It’s still broken up but its less garbled. The third button sets his volume on 6 with his that other volume still at 9.9 and the tone just down a little. The fourth preset moves one volume to 3,the other volume to 0, and backs the tone off a bit, its really bright and clean, almost country sounding.

He activates the settings via foot switches on the red box that’s always in front of him. Across the slanted part that’s always closest to him are five buttons: Four for buttons control the volume on the Whizzer, and one for the reverb kill. Inside the box are all these relays and the actual effects devices. There are seven buttons on the top plateau of the box. The one on the left hand side is mute and tune: You step on that and no sound comes out of the amplifier. We have 5 Strobe-O-Tuners up there, one for each note in standard tuning. The next one is for a green, AC powered MXR analog delay that’s mainly used in conjunction with the next button, an ancient Mutron octave divider. That’s used for ” Out of the Blue”, when we really want to fatten up the octave divider. The next button is for a master loop that switches any of the top devices in and out, except the tube reverb. The next one is for a real strange unit, a large very old Boss flanger in a blue cast metal box. He hits that only when he wants to get totally crazy.

Other guitarists have remarked on the Whizzer (dating it from decades ago) and one has remarked that the Renwig device seems similar.

There’s mention of robotics with Renwig’s device, but this may be a distinction without a difference.

These similarities to Young’s Whizzer — a device dating back decades — are significant because it’s a good way to measure market demand for Young’s device, or similar devices.

Quite candidly, the Whizzer is known to guitarists, yet decades after it was first described, there’s still no robust production of a device like that.

There are two principal possibilities: (1) the time wasn’t right until now, or (2) the time’s still not (and may never be) right for commercial production of the kind Renwig contemplates.

That doesn’t make Renwig’s idea inauthentic (I am sure they arrived at it on their own). It does make it commercially questionable. Had demand been greater these many years, there would likely have been an earlier Renwig by now, so to speak.

That’s a reasonable– in fact almost obligatory — observation when thinking about their prospects.

Rent and Equity.

One reads that Renwig has three years’ free rent at the Innovation Center in exchange for a 5% equity stake in their business. I’m opposed on principle to a deal like this: government should not be taking equity in private business ventures. Private funding should support private deals.

There’s vast private investment money in America (the wealthiest and most technologically-advanced nation on earth). Businesses should not rely on taxpayer subsidies in a society where banks and private investors can back ideas like this.

In any event, I think that any equity stake in lieu of rent reduces the Center’s immediate revenue on the highly speculative hope that there’ll be something valuable years from now.

Officials make these deals with only limited accountability. They offer public officials the shiver of excitement from wheeling and dealing without private accountability.

One can easily understand public money for public safety, the administration of justice, or emergency needs for the poor.

Commercial speculation should sit beyond those uses, in the realm of private risks and private rewards.

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