Berkeley Varitronics CEO Scott Schober Says NJ Has to Cut the Red Tape

We continue our series on the state of the tech business climate in New Jersey, this time interviewing Scott Schober, CEO of Berkeley Varitronics Systems, a family-owned firm that celebrated its 40th anniversary in 2014.

Berkeley Varitronics Systems, based in Metuchen, is a privately owned contract engineering firm, primarily in the RF space, that has changed and adapted with the times. The business was founded in Berkeley Heights (thus the name) by Gary Schober, who remains the CTO.

“We are not a design company or a product company,” Scott Schober, CEO, told NJTechWeekly.com, “but a complete solution provider. We can fabricate in our machine shop, we can do schematic captures of boards, we can design printed circuit board layouts and we can handle the production and the testing and calibration.”

Schober points out that the company has been able to thrive because the RF engineers understand the wireless aspect of design. Also, the company gets some interesting assignments, and “many of the offshoots of those assignments lead us to novel ideas for security tools” that Berkeley sells to diverse industries.

One of those products is the PocketHound, a device that can detect the existence of cell phones in areas that have been designated cell-phone free. Several other versions of the device are available, targeting different industries and markets. Schober says the government uses PocketHound to perform security audits in government installations. Moreover, in education, test proctors are using the device to make sure no one is cheating by using a cell phone.

Another product developed by Berkeley that has gotten some publicity lately is YellowJacket, a Wi-Fi tool that can sniff the airways and figure out that an item has a MAC address registered to a drone. The device can find both the drone and the pilot.

Schober has recently made a name for himself as a security expert, appearing on television, on CNN, Fox News, Fox Business, MSNBC, CNBC and other networks. We asked Schober:

How many people do you employ and what do they do?

Berkeley Varitronics employees about 30 people, primarily software engineers, RF engineers and hardware engineers. The company has a few people who help in the assembly of its products, but primarily contracts out assembly to a nearby manufacturer with high-speed pick-and-place capabilities.

Tell us what you like about New Jersey as a place to have a tech business?

What I love about New Jersey, and I myself grew up in Edison, is that everything is centrally located. That works out well for our staff. We are easy to get to. I know New Jersey gets a bad rap, but it is ideal for us to be close to New York City but not stuck in the mix of New York City with its expenses and traffic.

Also, as a wireless company, we benefit from the great legacy of wireless companies who were located here in the past or are still here, such as Verizon, Lucent, Avaya, and Motorola. There is a lot of good talent here in New Jersey. When divisions moved or downsized, we had a great pool of talent to pick from. These employees were able to pick up and contribute on day one. We really benefited from that great expertise.

 What do you find is difficult about running a business here?

Two things: red tape and taxes. We have a heavy tax burden. We own our building outright and we bought an acre next door and expanded on that. A number of years later we bought another acre adjacent to us. Metuchen’s taxes are expensive and so are the taxes for our employees.

How do you retain employees?

We are very careful to provide good benefits for our employees, and we want to invest back into our healthcare coverage. We have a 401K with a matching profit-sharing plan, both short- and long-term insurance and generous paid time off. We have a one week shutdown in July that everyone gets paid for and we have an 11-day closure during the holiday period. But it’s not just compensation that keeps our people happy. We don’t have layers of management. We pick team leaders or project leaders depending on the job. People come to the company and can be in charge of their own destiny. They can be integrated into a project and see the success of it.

What do you think of the universities and colleges in New Jersey?

We do hire right out of school sometimes, and we find that how well-prepared the graduates are depends on the discipline. From a security perspective, the majority of graduates right out of school have no clue of what’s going on. Some schools are remedying that now, but they are way behind. As far as RF design, very few schools have that expertise. There are a lot of good schools for EE degrees. Math is strong, physics, engineering and mechanical engineering.

Recently we needed to hire a programmer, and I couldn’t find local talent within New Jersey that had the skill set we needed. I found a couple of good candidates in California. Ten or 12 years ago there was a surplus of software engineers, but now most of what is available are contractors. I don’t want contractor help. I want to hire someone.

Do you outsource overseas at all?

No. People are surprised that we design things in the U.S. and don’t outsource to other countries. They ask me, “Do you really ship from your door? Do you really build it here?” I’ve had customers come to our facility just to check it out to make sure we really manufacture and design out of New Jersey.

If you had one thing to say to Gov. Christie what would it be?

While the biggest complaint from us and our employees is about taxes, business, corporate and local, he should know that doing business with the State of New Jersey can be very challenging. We sell to school systems, we sell to prisons. We have a PocketHound demo at a correctional facility. It’s not that they don’t want our products. It’s the red tape, the bureaucracy, the budgeting and the games they have to play to actually get a purchase accomplished. Our customers are frustrated with it. I hear this every time I go to a State facility. It shouldn’t be a long, difficult procedure to purchase a security device that can save people’s lives. Yet it gets pushed aside and denied. I can sell instruments to Indiana, and they are bought with a phone call. They see a problem, we have the solution, it’s within their budget, and they purchase it. In New Jersey, it’s very difficult.

Have you ever taken advantage of any of the programs offered by the State or the New Jersey Economic Development Authority to help businesses here in New Jersey?

No, we never have done that. We are organically grown and self-funded. We haven’t had to fire people or lay them off, and we run lean and mean. We work long hours, but we only buy what we can afford.