Benny Landa is a visionary. Decades ago, he pioneered digital printing and revolutionized the industry. Now, after a 10-year hiatus, he's back and calling on his disciples to take note. The future of printing is in nanotechnology, says Landa, promising to make printers faster, greener, more efficient and more cost-effective than ever before.
He has the ink; he has the printer. He even has a batch of pre-orders and a slew of manufacturing partners. Landa has been here before and he's not about to repeat the same mistakes.
Indigo, his first printing company, was founded in 1977 based on decades of research. Its revolutionary innovation enabled printing houses for the first time to print directly from the computer to paper, without having to first create printing plates. In 2002, after years on a financial roller-coaster, he sold the company to Hewlett-Packard and took leave from printing.
Now he's back, and aims to achieve everything he wasn't able to accomplish at Indigo with his new company, eponymously named Landa.
The new venture made a splash last month at Drupa, the world's largest printing-industry fair, which Landa dubs "the Olympics of printing" because it takes place every four years in Dusseldorf, Germany.
He last presented at Drupa 12 years ago, while still at Indigo. This year, Landa took on the role of prophet once again, foretelling the next revolution: nano-graphic print.
Over the two weeks of the exposition, Landa appeared five times a day to greet attendees and present a show as only he knows how. Landa's booth, designed to resemble a theater, quickly became the central attraction of the expo.
A huge splash
According to Landa, the marketing buzz generated by the expo was greater than anyone at the new company had anticipated.
"During the expo we signed deals to sell hundreds of printers worth hundreds of millions of dollars," he says. Customers plunked down security deposits of €10,000 per machine even though Landa won't start production until late 2013, he says. Also, these are machines without a track record, he points out. "Usually, you come to a trade show after you've already drummed up some business. But these printers haven't been previously shown anywhere else, not even in photos. Nevertheless, people lined up to sign orders."
At Drupa, Landa presented six different models: three sheet-fed machines and three roller-fed; three of them are for packaging print and three for commercial print. The equipment sells for $1-3 million per unit.
The S10 model in the B1 format was the most popular and most expensive: It boasts the highest degree of functionality and can print 13,000 sheets per hour. But according to Landa, orders were more or less spread evenly among the models.
Several days after the expo ended, TheMarker Week met Landa to discuss the next digital printing revolution, what surprises he's cooking up in his mysterious lab at Rehovot's industrial park, and why he decided to name the new company after himself.
"This time, I decided to put my personal reputation on the line," he says. "People in the industry recognize and remember me, and this generates faith in the company."
Only 2 percent of the global printing market
Benny Landa's role as a digital printing visionary first became apparent in 1993 during the IPEX exhibition in the United States, where Indigo unveiled its first printer, the E-Print 1000. Despite that success, he feels the digital printing revolution hasn't reached its full potential.
"Has the printing industry shifted to digital?" Landa asked the Drupa audience. "Trillions of pages are printed every year using digital printers. That may sound like a lot, but it accounts for only 2 percent of the global printing market.
Nano-graphic printing is on its way to becoming mainstream and to competing for the remaining 98 percent."
That remaining 98 percent comprises mostly mass printing jobs, for example newspapers and magazine requiring tens of thousands of copies. It relies on the traditional offset printing method and uses printing plates that cannot be altered once they are produced. Digital printing, on the other hand, goes directly from the computer to the page (think of your home printer) and allows for customization. As such, it tends to be used for shorter runs of 7,000 copies or less.
"The trend in publishing is smaller and smaller print runs," says Landa. "The average print-run today is less than 10,000 copies, with runs sometimes going below 5,000 copies. Every run requires preparing adjustable type blocks and a lot of ink and paper are wasted. As print-runs decrease in size, the up-front investment grows in relation to expected revenues. Thus, publishing houses will find it difficult to turn a profit."
As easy as operating an iPhone
In an age when print media is taking a dive and most magazine and marketing materials are produced online, it may seem odd to take a risk on investing in new printing technologies. But Landa isn't worried.
"One day, with the exception of packaging, print will not exist - that is clear," he says. "In 200 years people will no longer communicate with each other using tree pulp. Commercial printing will almost certainly be replaced by digital media. But the phasing out of print media will take dozens of years and printed packaging will always be around."
"If you are involved in the printed packaging business, your future is bright," he continues. "Packaging today represents almost a third of the total print market. Food will always be sold in pretty containers. There is a great opportunity here."
Landa's new printers are characterized by their sophisticated design and user-friendly interface. They are operated by a giant touch-screen and can be activated from afar. According to Landa, a single operator can simultaneously run four different printers.
Each machine is equipped with cameras that keep an eye on what is occurring within its bowels.
"If the user knows how to operate an iPhone, he can operate one of our machines," Landa says.
Turning ink into liquid gold
To understand the history of how Landa became a believer in the power of nano-ink technology, one has to backtrack into the history of Indigo, his previous company, where initial R&D was taking place in photocopy machines.
"The idea originated as far back as the 1970s to create a photocopying ink instead of powder, which would allow the machine to operate at a higher speed. After several years we achieved a breakthrough with an ink that could copy pages at a speed of 100-150 sheets per minute, 10 times the speed of other copiers on the market at that time."
To create such a copying machine, Landa needed a high-speed paper-feeding mechanism to supply it with fresh sheets of paper at high speeds, which didn't exist at the time. So he developed it and registered the patent for this innovative process, which he later licensed to other companies in exchange for royalties. Those payments in turn funded the development of Indigo's revolutionary printers.
Machines aside, Landa realized he had stumbled onto something potentially more valuable. "A short time after we developed the ink, I said to myself: 'Wait a second, if ink is the magic behind photocopiers, why not also use it for digital printing machines?'" Shortly thereafter, the company abandoned photocopier efforts and shifted its focus to printing machines. This entire process occurred over a 17-year period.
Living off royalties and an angel named Soros
"During this entire period we didn't have any investors," Landa says. "We didn't receive grants, we didn't take out loans and we didn't have any revenues from the printers. All of our financing came from the patent royalties we received for developing high-speed photocopiers. Companies like Xerox, Kodak, Cannon and Minolta began developing their own high-speed photocopiers, and paid us $200 million combined to license the technologies."
Indigo continued to develop without any external financing until it reached the stage of mass commercialization, at which point it required additional investors.
"In 1993, we were like panting dogs, with our tongues hanging out of our mouths. Then George Soros said he was ready to invest in the company, but on condition that Indigo would eventually hold an initial public offering."
Soros paid $50 million for a 14-percent stake in the company, putting the entire company's value at $350 million. That same year, Indigo's first digital printer hit the market and was an immediate success.
One year later in 1994, Indigo was listed on the NASDAQ stock exchange in the U.S. The Israeli company's initial stock offering set its market cap value at the impressive sum of $1 billion, which soon surged to $3 billion.
Overnight Landa became a billionaire on paper and his image was plastered on the front-page of leading business magazines across the globe.
Growing pains that lead to philanthropy
Just as Indigo's rise was meteoric, so too was its fall. The company had problems meeting the great demand for its products. The first machines that it put on the market proved unreliable and the flood of orders Indigo saw soon slowed to a trickle. The company's stock, which peaked at $60 per share, nosedived, losing 90 percent of its value in more than two years.
Landa, who enjoyed the company's early success, suddenly faced continuing disappointment, mounting losses, and an endless need for additional financing. The company undertook several rounds of fund-raising but still had difficulty in regaining growth and profitability.
Landa firmly believed that Indigo would be an industry leader, but after several years of ups and downs he decided to accept a friendly takeover bid by Hewlett-Packard. In 2002, he sold Indigo to HP for $830 million, but stayed on in an advisory capacity.
"When I sold Indigo, I thought I would be leaving the world of printing for good," he says.
Using the money he had earned from the sale, he set up the Landa Foundation, a philanthropic organization aimed at promoting higher education among disadvantaged youth.
"I felt like it was my obligation," says Landa. "I grew up poor but I had a lot of lucky breaks, and I thought I should give something back to society. Thousands of students have earned their degrees because of this foundation and I am really proud of that."
At the same time, Landa established a venture capital fund, Landa Ventures, which invested in high-tech start-ups. The fund focused largely on companies in the fields of energy, imaging and medicine.
"We provide them with the means to grow," he says. "I don't see it as a purely financial investment, but more as a means toward promoting an entire industry."
Among companies that Landa has invested in are ColoRight , HighCon and HumanEyes in the field of 3-D imaging, as well as other companies such as Kaizen International, GenCell, Xjet Solar and Michel Mercier.
Energy that violates the laws of nature
Meanwhile, R&D at Landa Labs has continued, with a focus on alternative energy solutions, particularly generating electricity from atmospheric heat. Landa recruited top scientists in Israel, and enticed several Israeli scientists working abroad to come home.
The research into alternative energy sources is based on nano-structures (a nanometer is one billionth of a meter, or one millionth of a millimeter). According to Landa, when materials are reduced to nano-structures, their physical properties change.
Metallic substances, for example, can be heated using much less energy at the nano-level. To use these materials, Landa Labs found it necessary to manufacture small particles in-house.
"We couldn't buy these particles because no one manufactures them," says Landa. "So we had to make them ourselves. The moment we succeeded, and because my DNA comes from the field of printing, I said maybe we could do something similar with nano-pigments. We attempted it and succeeded. I said to myself: 'Wow, this is the solution the world of digital printing has been waiting for.'"
Over the course of five years, Landa Labs has been developing the technology behind nano-pigments and fitting them for use with digital print heads.
At his Drupa presentation, Landa explained that one of the properties of nano-graphic ink is that it dries immediately on paper; no heat is necessary. This enables printers to run at much faster speeds, as the drying stage becomes extraneous. Nano-graphic ink can also be printed on a variety of surfaces, which benefits the printed packaging market in particular.
The labs then shifted from focusing on ink to building the machines that would use it. Over the last two years, the company has increasingly turned its attention to engineering new machines.
Today, Landa Labs employs more than 200 workers, with roughly 50 employees developing new nano-graphic printing machines and about 50 employees focused on researching alternative energy as well as several new interdisciplinary fields. This is another reason for Landa's ongoing deliberations about if and when to seek external funding for the company.
In addition to the nano-graphic printer line, Landa will need to set-up an ink factory in the near future. This production phase will require additional financing and there is no guarantee that Landa's personal wealth alone will suffice.
Factories and financing
"The first factory will be established in Israel," says Landa, adding that in the future, more factories may be needed elsewhere. "It would be illogical and not cost-effective to ship ink from Israel to China and North America because the quantities that would need to be shipped could be quite large. Moreover, we would need a factory outside of Israel to minimize our risk.
As for the machines themselves, they will be largely produced by contract manufacturers, in contrast to Indigo. "This time I don't have 30 years to build up the business," Landa says. "It's better to progress more quickly through the use of strategic business partnerships."
"We have learned from our past experiences," says Landa. "This time we intend to bring complete products to market. We need the highest level of quality, the highest level of reliability, the highest level of functionality – and this all takes time."
However, Landa sounds confident about his plan – at least until the issue of financing comes up. Then he begins to squirm. And he obviously doesn't divulge the numbers. ("One of the advantages of being a privately held company is that we don't need to discuss how much we have invested," he says.)
However, judging by the number of people he employs, the space he rents and the amount of expensive equipment in his labs (just a single nano-microscope can cost as much as $1 million), it's safe to assume that the last 10 years of R&D have cost him somewhere between $150 million and $250 million.
Landa is a wealthy man, but it is hard to believe that he can bear this financial burden single-handedly. The transition from the R&D stage to commercialization, marketing and mass production will of course be that much more expensive.
The question of financing becomes more essential as the need to set up a production facility arises. Surely no private individual could self-finance such a large expense?
"Warren Buffett could," is Landa's cryptic response.
So once again, the search for investment is on and the possibility of going public must be considered. "I am not overjoyed at the thought of becoming a publicly owned company," he admits.
"If we were a publicly owned company, we wouldn't exist today and we wouldn't have a single product. No publicly owned company can permit itself to undertake the risks we have, a massive investment with a long term until maturation."
Thanks to the success at Drupa, Landa says, a lot of opportunities and financing options have opened up that weren't previously available. An updated business plan is on the way.
"Indigo is still in my soul"
Landa's new company may soon find itself competing with his previous company, Indigo.
"Indigo is still in my soul," he says. "I love that company and the people who work there."
In addition to promoting products in the same market, the proximity between the two companies is also physical. Indigo's R&D staff work at a location across the highway from Landa's current offices. Landa claims he has no intention of poaching.
"The ties between Landa and HP are very good," he insists. "HP is a wonderful company that is at the forefront of technology. What is good for the entire industry will also be good for HP."
"I am not saying there won't be any overlap between Landa and HP's target markets. But the market niches are very different," he says. "When people asked me at the expo what they should do until the new printing machines arrive, I advised them to buy an Indigo."