By Barry Kawa,
© Astromart, LLC
In 1997, Meade Instruments Corp. stood at the top of the telescope market. It went public that year, and was the darling of smaller issues. Its products were innovative, industry changing and in demand, such as the Autostar Computer Controller and the ETX 90 Astro. The Meade 90 ETX had been introduced the year before and, at $495, the waiting list to get one was incredibly long. John Diebel, the company founder and, at that time, chief executive and chairman, welcomed a visitor in his office at Meade headquarters in Irvine, Calif. If there was anything like a rags-to-riches story in telescope companies, Diebel embodied it.
He had gotten his bachelor of science and master of science degrees in electrical engineering from Cal Tech. Then, he earned his Ph.D. in electrical engineering from the University of Southern California. He got his first job at TRW Inc. in Redondo Beach as an electrical engineer but he was immediately unhappy, never having had a job before. “I was not happy working for someone else,” Diebel recalled some 25 years later. “I didn’t know why. Here I had spent all this time and money on my education.” After TRW he went to work at Hughes Aircraft for a year, but was “really miserable” there, admitting he did not like being directed and told what to do.
Diebel remembered one Saturday morning when he went to the Los Angeles public library in November 1971. He started poking around in the library, looking for some ideas on a business he could start up. He looked through several magazines and even one called the “Importer” magazine, which had a small ad offering small refracting telescopes made in Japan.
Diebel made up a letterhead and sent off about 20 letters to various companies, some for hardware kits and calculators and other products. Out of the two or three responses he received, one was from the telescope company that sent him their catalog and price list.
Diebel was no novice astronomer. He had built three telescopes as a teenager, so he was well-versed in astronomy and telescope making. Growing up in Pasadena, he started with a 6-inch reflector, then a 10 inch and came close to finishing a 12 ½ incher before heading off to college. Like many people, he lost interest in the hobby for many years and didn’t find his way back until later.
The telescopes seemed like a good business opportunity. He went to Bank of America and tried to borrow $500 to buy some sample telescopes, but the bank turned him down. “The fact I had a negative net worth might have had some role in it,” Diebel smiled. Diebel still had some college loans he hadn’t paid off, and was paying $50 or $100 a month on those so he went to the Hughes Aircraft credit union and borrowed $2,500 at 12 percent interest. With that, he bought some small refractors as samples and put an ad in Sky and Telescope magazine. He made up a little catalog, operated from a post office box in Canoga Park. He was still working at Hughes Aircraft and slowly started to sell a few telescopes. He recalled the sales were about $7,800 the first year of operation, which meant a $700 profit.
By April of 1973, he was making about $300 a month from Meade Instruments. He was still single and living in a tiny apartment about the size of his office at Meade in 1997. The monthly ad in S&T cost him $115. He was making about $20,000 a year at his day job at Hughes Aircraft. Being frugal, John could live on $300 a month, about what he was making from his Meade mail order sales at the time. “It was at this point, I said, ‘All right, I’m going to leave Hughes and do this full time,’ and I never looked back,” he said.
Diebel started Meade at a time when a new astronomy magazine was also making its debut. Astronomy Magazine came out in April 1973, and offered some attractive initial ad rates. Astronomy was offering half the ads for free if a customer took out a one-year contract. He recalls talking to Steve Walther, the founder of Astronomy magazine.
“He was very anxious to get some advertising in his fledgling magazine, and I kind of identified with him,” Diebel said. “I was just starting out, too.”
In November 1973, Meade moved to Costa Mesa, because Diebel’s father, Herbert, was retired in Newport Beach and lived nearby. Herbert Diebel had owned a church furniture company and could teach him how to operate a business. His father would also help him in the business, typing invoices and helping his son find some industrial space to rent. They found a place at $340 a month in rent on 16th Street in Costa Mesa. The only way Diebel could afford it was to move into a loft above the warehouse, where he would live for a year to save on rent. “It was a very sparsely furnished room,” he recalled.
Meade sold a few telescopes from its showroom. Diebel’s father did a lot of calling on the phone, while his son worked on designing telescope accessories. Diebel designed some focusers and took them to Japan to Towa Optical Manufacturing, the company he was buying the small telescopes from.
Diebel showed them his crude drawings and some crude prototypes, and the company president looked at the earnest man facing him. He would tell Diebel years later that he admired him for coming in, a one-man company with a dream. “He said, ‘You know, I looked at you and I saw a lot of myself. I said, ‘You know, this man reminds me of myself when I was younger.’ And also, he said, ‘You were honest. You told me, you were one man trying to build a little business. You didn’t try to be something you weren’t. So, we hit it off.”
The president brought in his chief engineer, who looked at Diebel’s focusers and said they could make those. So, Diebel spent a few days in Tokyo and returned in a few days. “I went back, I sat down in the president’s office and he had three of these beautiful focusers that his chief engineer had hand made.” He said, ‘Would these be acceptable? I said, ‘Oh, are you kidding? These are beautiful.’ If you go back and look in Sky and Telescope, maybe in late 1973, early 1974, you’ll see the three rack-and-pinion focusers.”
From there, Diebel started offering telescope accessories, such as viewfinders, color filters, orthoscopic and Kellner eyepieces, camera adapters, and Barlow lenses. By early 1975, Meade was making a large assortment of accessories for the amateur astronomer. The increased sales allowed Diebel to move into a one-bedroom apartment about a mile from his office. He could put all his profits back into his company. Diebel discovered that he loved running his own business. He would work all night, working on focusers and Barlow lenses. He also found out he had a talent for writing, and would write all of Meade’s ad copy and catalogs..
By 1977, Meade was still developing accessories, and had won a steady clientele. Along with Diebel and his father, the company now had a secretary and Ron Ezra, a graduate engineer who packed boxes in the warehouse. Diebel recalls promising Ezra to “hang in there, when we get enough money together, we’re going to do something important. I promise it will be financially rewarding for you.”
By 1977, Meade had the funds to start producing the company’s own telescopes for sale.“We could buy these piers outside, we had no optical manufacturing capability, but Ron and I sat down at his desk with a ruler and a pencil and designed an equatorial mount that became the model 628 and 828 mount, with a little spur-gear drive,” Diebel recalled.
Diebel said he felt there was still a market for a good 6-inch and 8-inch reflector. Diebel said, while other companies were still making those telescopes, their quality, delivery time and customer service were dismal.
“They treated their customers in a cavalier, disdainful fashion,” he said. “I remember thinking, ‘My gosh, what a way to treat the most valuable people you have. If you sell a telescope to a customer and he’s happy with it, and he takes it to a star party, 10 other people are going to buy your telescope. That’s the best advertising.”
In December 1977, Meade produced its first telescopes, a dozen reflectors, which they sold after they were placed in a tiny showroom at the 16th Street factory. The scopes cost $400 to $500, and featured mirrors made by Coulter and from some amateur mirror makers who could make a well-figured mirror. “Any place we could get a good quality mirror at a reasonable price,” Diebel said. After sales took off, Diebel knew he had a winner.
At first, the company continued to buy mirrors from Coulter and from amateur makers. “But we knew we ultimately had to start our own optical shop,” he said. “We couldn’t find any optical shop that could make the combination of high quality and reasonable price and high quantity that rapidly became the requirement.”
Diebel called the Newtonians “one of those rare products” in which sales exploded right off the bat, much as his company’s ETX 90mm Maksutovs would some 20 years later. He remembers the letters pouring in from satisfied customers. “We would get more letters, ‘My friend brought my ‘Brand X’ or whatever, and gosh, it’s twice as much, my Meade 6-inch reflector outperforms it.’ It was very gratifying.”
But with success, came a tremendous backlog on the scopes. Within a few months, Diebel had to write every customer who ordered one, apologizing that his company could not deliver on the promised 6-week delivery time in their advertisements. Diebel wrote that the wait could be as long as four months, and promised anyone a full refund right away, if desired. “A couple of people said yes, but a great majority stuck with us,” Diebel recalled proudly. “And, in fact, we added some people, worked some overtime and weekends and nights, and we got out almost all the telescopes in a lot shorter time than we had anticipated and kept our customers happy.”
Diebel pointed out that this came at a time when other telescope companies were taking as long as a year to fill their orders. “That philosophy, more than anything else, has made Meade Instruments what it is,” Diebel said. “We’re not perfect, but we try awfully hard to do the right thing and keep people happy.”
As soon as the 6-inch reflector became successful, Diebel’s fortunes also rose. By 1978, he estimated his net worth was about a million dollars. He started looking at the Schmidt-Cassegrain design and dreaming about making a Meade SC. Diebel decided to manufacture the crucial corrector plate differently than Celestron, to avoid the time-consuming and costly litigation snarl that was still ongoing with Criterion.
Diebel bet everything Meade had made on its new Schmidt-Cassegrains. He brought Steve Murdock aboard, who was a master optician. He started looking at methods for making the Schmidts.
Diebel realized that there was a huge market for the Schmidt-Cassegrain telescope, and “frankly, we didn’t think the market was being well met, because of the absence of competition.”
“You would see things like worm-gear drives available as options for competing Schmidt-Cassegrains, and I thought, ‘Why does the factory offer it as an option?” They were a very successful competitor, competition is what tightens up your thinking process.”
That opening gave Meade the opportunity to put a worm-gear drive as standard equipment into its original model 2080 8-inch F/10 Schmidt-Cassegrain. The correcting plate design was completely different from Celestron’s. Diebel knew that Celestron had sued Criterion over its corrector plate design.
“We were a small company and had no desire to get into litigation to prove that we were right and they were wrong, or their patent was, in fact, invalid. We couldn’t afford to take a risk like that. So, we simply stayed miles away from what they were doing and we never had a problem. We never even got a letter from them or anybody or nothing.”
Diebel said with satisfaction there was nothing for Celestron to sue about.
Diebel said Meade put a million dollars into the 2080 and a 4-inch version, the 2040. The Meade 2080 made its debut in September 1980, but was only moderately successful from the start. “It took a few years for us to perfect the optical manufacturing process, and for the first couple of years, we didn’t make any money on the telescopes we sold,” he said. “We were selling them at either zero profit or at a small loss. We were still making money on our reflecting telescopes and accessories.”
Step by step, Meade added new features to its Schmidt-Cassegrains. In 1984, it brought out the 2080 LX-3, combining for the first time the electronics of the drive corrector in a separate hand controller. The 10-inch 2120 had come out in 1981, along with the DS 10- and 16-inch Newtonians around that time. By 1986, Meade enjoyed annual sales of $13.6 million and was very profitable. Diebel decided to sell his beloved company at that time. Why? “I wanted to spread my financial risk,” he admitted. “I owned 100 percent of the company. Every day, I came to work, everything I had in the world was at stake. It was a little bit intimidating.”
|Inside Meade Instruments Today|
Diebel agreed to stay on as president and was well-compensated by the new owners, Harbour Group of St. Louis, to remain, he said. After two years, he left Meade, since he differed in philosophy from the new owners. Diebel was a risk-taker, he said. If his company looked at a new product carefully and liked it, it would bet the farm on it. That was not the case with the new owners, he said.
From 1987-1991, the fortunes of Meade declined, as stagnation in the product line set in. On Feb. 28, 1991, Diebel and three other Meade executives bought the company back for $1,000 and assuming $2 million in debt. “We had a big job to do,” Diebel recalled. “Our product line had become somewhat obsolete.”
Meade started developing the computer LX-200 series, a line of apochromat refractors, and even the line of inexpensive 6 to 10-inch Starfinder Newtonian reflectors, along with an upgrade of the accessories. In February 1992, Meade announced the new line in six pages of advertising, featuring the Newtonians.
“Even though they were not high-tech telescopes, it was a very important price level at high quality, and many other accessories,” Diebel said of the company’s Starfinder Newtonians. “We had to do those first.”
Diebel said when they bought the company back, the optical quality in Meade products was not what it had been. So, in 1991, Diebel and the new owners decided to make the best optics an amateur astronomer could buy.
“We decided we would make the optical quality on a Zeiss or a Nikon level,” Diebel said. “Whatever it took to do that, so that no one could say in any way that we had cut corners on the optical quality.
“Over the next few years, I think the astronomy community started to recognize that.”
With the new line of scopes and the glitzy catalogs and eye-catching ads in the two major astronomy magazines, Meade stood at the top of the telescope market along with rival Celestron, which it once tried to merge with, before the Federal Trade Commission blocked that in 1990.
That was when Diebel had been out of the picture at Meade, although he agreed with the attempt.
“It was a good idea,” he said. “Both Meade and Celestron were not doing as well as they wanted to. In those days, the economy was not good in general in the late 80s. That was difficult times for both companies and the idea of a merger had a good deal of merit.
“But ultimately it was disallowed on an anti-competitive basis. Looking back, it probably happened for the better.”
Becoming the first telescope company to go public allowed Meade to fund its employee stock ownership plan and to pay off all the debt associated with it and gave the company the cash to develop new products.
Diebel got a twinkle in his eye talking about the ETX.
“We were absolutely determined, and it started right at this desk, the optics in that ETX are the best they can buy anywhere,” he said. “Questar, Zeiss on down, we are not going to cut any corners on the optical quality, and we didn’t and it took a lot of work, even with all the talent in our optical factory.”
The story of the ETX started with Diebel pacing back and forth across the floor in the late 1980s, thinking about the company’s product line. The big telescopes were designed for a very narrow market. Meade didn’t sell small telescopes, they started at around $500 or $600, and then quickly went up to $1,500 or $2,000.
“I asked myself a simple question: What is a telescope that we can make that would appeal to a wide market? To a wide range of people, not just the amateur astronomer.”
Diebel thought about what was out there, the legendary Questar, a 3.5-inch Maksutov, and thought about putting in the electronic systems that Meade was working on at the time.
“One thing that occurred to me, when I looked at the Questar. You know, this is a beautiful telescope, but it cost $3,500. I mean, how can people afford to have a $3,500 telescope? It was a very limited market.”
So, Diebel started talking to his optical people.
“Look, if we tooled to make thousands of 3.5-inch Maksutovs, that we absolutely insisted be the best that anyone can make, if we spent the upfront money to do it, to do it the most efficient way possible, can we make a 90mm Maksutov system at a price the average person can afford. And basically, the answer came back: ‘Yes, if we make enough of them and spend enough money upfront.’ I presented the idea to our owners at that time and they rejected it soundly. ‘How much is this going to cost?’ The answer at least $300,000 or $400,000 for the entire project.”
In the late 1980s, with a recession looming, the new owners said no.
So, when Diebel and the three others bought the company back, he remembered that 90mm Maksutov. Around 1993, they were ready to begin work on a small Maksutov. “We had decided on the aperture, we hadn’t really finalized the optical design,” he said. “I had a good image in my mind, and I kept bouncing ideas off our engineering and design staff. What should this product be? Is it a product that can appeal to everybody? This has to be everybody’s telescope. It has to be a telescope that everybody, not just amateur astronomers, would enjoy having. And so, we started calling it the ‘E.T.’ (Everybody’s telescope) just to have something to call it, ‘So and so is working on the E.T. project.’ We later changed it to ETX, it has a more mellifluous ring to it. That’s all it was.”
When it was done and the final prototype was put on a conference table, all the design staff gathered around.
“We all looked at it, this is a winner, this is an incredible product,” Diebel recalled. “It met every goal we all had for the product. It cost over $700,000 to develop and two years of intense effort, optically, mechanically and electronically. But when we looked at it, we said this is a winner.”
Using ABS plastic kept the ETX lightweight and gave a nice feel to it. The ETX had to pass a lot of criteria. It did that, and then some.
“It had to pass what we called the ‘coffee table test,’ ” Diebel said. “It had to look nice sitting on somebody’s coffee table or on a bookcase. You can’t do that with a product made from cast aluminum. It simply looks too much like an instrument, something that doesn’t belong on a piece of finished furniture.
“The ETX was designed to be very friendly in its environment and in its application.”
Once again, Diebel had another winner. The telescope industry would never be the same.