There's Big Money in Fear

Security is the watchword in the United States these days, and companies that can provide it stand to do pretty well. Manny Frishberg reports from Seattle.

SEATTLE -- "Homeland security" is the latest market for startups in the Pacific Northwest. A number of small Washington companies have expanded their product lines, or retooled the way they market them, in response to the call for heightened security in the wake of Sept. 11.

President Bush has proposed spending more than $5 billion in 2003 alone for implementing anti-terrorism safeguards. Much of that money is going to local police and fire departments and other "first responders" to help them detect biohazards.

But there's plenty left over for companies that can help the United States fight off its enemies, real or imagined.

One government group that handles bioterrorism purchasing solicited technical ideas in January and got 8,000 responses. Companies are rolling out devices designed to sniff out telltale signs of anthrax spores, explosives and other weapons of mayhem.

Before letters with mysterious white powders in them became a national phobia, Jim Flemming's main business was finding unwanted microbes in cheese. Last August, shortly before the United States learned to fear what might be in the mail, Flemming's company, GenPrime, had just expanded to checking for microbes in beer. His entering into the mail-screening business "was just a response to industry demand," he says.

"We had a lot of people who started calling us during mid-October last year -- especially after the Daschle and Brokaw letters were received -- who said, 'You people know how to measure microbes rapidly. Can you do anything for this anthrax problem?' It was not something that we wanted to do. We had a visit from our congressman, and a lot of big companies called."

Flemming said they did not have the expertise to identify anthrax definitively, but they could come up with a rapid screening test for microbes in general.

"A number of people saw the significance of that in terms of being a hoax-buster," he said.

They came up with a kit about the size of a pair of laptop computers stacked together. Called Prime Alert and bearing the advertising slogan "Bringing Home Security home," the kit contains a sample bottle for the suspect powder, a chemical solution developed for the test and a reader that indicates the presence or absence of microbes in five seconds. Their next step, Flemming said, would be to refine the test to identify particular bacteria or spores.

"Right now we're going to be doing direct sales, and we have some reps around the country. We're targeting haz-mat type operations, fire departments and also security departments in a lot of large companies."

Even with the strong interest, Flemming said, "it's still a difficult sales cycle." He admits that they have not sold any to date.

Despite that, GenPrime has all but stopped trying to sell its products to breweries, choosing to focus on the homeland security market instead. "If this product takes off," Flemming says, "it will dramatically change our business, because the market is so large compared to our other products."

MesoSystems, which makes handheld air quality monitors, was founded nearly five years ago by Charles Call, an engineer who was working on miniaturizing air-sampling devices for the U.S. Army.

"At the time, the smallest air samplers that were available to the military used about a kilowatt of power and were about the size of small refrigerator," Call said. "They weren't things that could be worn or be carried around in your hand."

MesoSystems introduced its first commercial monitor, the BioCapture, late in 2000. Until the attack on the World Trade Center, the company's biggest customers were firms worried about "sick building syndrome," where molds and chemical contaminants can circulate through the air conditioning and heating systems.

"Prior to 9/11, clearly there was a market for bioterrorism (protection), but we didn't think that it was the biggest market that was available to us," Call said.

Since then, the market has boomed for machines that can detect anthrax in mailrooms, whether in post offices or in commercial office buildings. It has become the focal point of MesoSystems' marketing and product development efforts.

"We've put a lot of effort into developing larger, higher flow-rate, sampling systems for the post office and for the corporate postal world and the commercial pre-sort world," Call said. "Every building has a mailroom ... every bank, every insurance company. It doesn't matter if you are in the software industry or the banking industry, you have an issue of security now in your mailroom."

Selling what he says is the only system on the market capable of detecting anthrax in the air, Call sees markets everywhere he looks, from Fortune 500 companies wanting to protect their mailrooms to local police and fire departments that are just waiting for the money from Congress to make its way down to the local level.

In addition, MesoSystems has sold 100 monitors to Japan and is negotiating a marketing agreement to sell them in the Middle East. "I think (with) terrorism," Call says, "we're really just scratching the surface right now."