Editor’s Notebook: ComByte’s demise illustrates fragility of high-tech economy

The company didn’t employ a lot of people, didn’t occupy acres of office space, didn’t make a lot of headlines. Even the announcement of its demise was low-key — not even a press release, really, more like a note to a business associate.

“The computer industry, as we are all aware, is a rapidly evolving one. As such, it seems to transform on a daily basis with market shifts and a fiercely competitive environment often combining to doom innovative, strong products. That is why we regret to inform you that as of March 1, 1996, ComByte Inc. ceased operations at the direction of its board of directors.”

A few more lines, and that was it. Nothing more heralded the death of ComByte. The story didn’t even make its way into the local newspaper until days after the release. And the release itself wasn’t even on the company’s letterhead — and provided less information than you’d find in a short obituary.

But people seldom write obituaries for companies, especially small businesses that had not yet staked a claim to permanence, that had not yet captured the community’s attention, that had not yet fulfilled their promise. Usually, employees displaced from a failed company are left to seek perspective on their own, and the community in which they worked simply moves on, sometimes with a curious pause, sometimes not.

Why, then, should ComByte be any different? Perhaps it’s because of a word that jumps out a few lines back: promise. ComByte had it, but it didn’t have it for long.

Former Colorado Memory Systems executives Ed Harper and John Moinester founded ComByte in 1993. Other ComByte officials also heralded from Colorado Memory Systems, one of the great successes of this region The Business Report has dubbed “the West’s entrepreneurial heartland.”

Things looked brighter for ComByte in January. That’s when the company’s product, the Doubleplay dual media drive, was recognized by PC Magazine as a “Best of 1995” product. It also won a “Colorado’s Most Innovative Product Award” from The Denver Business Journal.

And, yes, the product was — and remains — impressive. The Doubleplay drive plugs into desktop and portable computers, allowing users to share, store and access large files on both tape cartridges and floppy disks. The drive allows direct access to files on tape, and each standard tape could store 800 megabytes of data. To use a complex computer term, the ComByte product is “cool.”

But not cool enough, it seems. As the company’s sketchy news release stated, “Although the company had sought additional financing and/or a buyer or corporate partner for several months, both proved impossible to find. The decision to cease operations was based primarily on the knowledge that the company as funded could not complete the work necessary to enter a different market and become a profitable business.”

And so it goes. ComByte’s failure illustrates this region’s lack of venture-capital financing. And it should serve as a warning to this community that tends to take its business vitality for granted. We can’t assume that this community will “grow” its own businesses if they can’t find financing.

Perhaps there’s a reason that other high-tech companies didn’t jump to absorb or partner with ComByte. Maybe its product didn’t truly deserve the accolades or potential ascribed to it by trade journals. Somehow, though, the evidence seems to indicate otherwise.

And while it’s true that the high-tech industry is among this country’s most volatile, it’s unfortunate that ComByte got swallowed along the way.