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August 13, 2003

Eden Prairie's hearing-aid pioneer is a good listener

From: Minneapolis Star Tribune, MN - Aug 13, 2003

William (Bill) Austin has been inside the heads of four U.S. presidents. He has helped George W. Bush hear the faint chirp of birds and allowed actor Karl Malden to listen to waves again. He has assisted Ozzy Osbourne and, recently, flew out to fix a hearing problem for Paul Newman before a car race.

And when Austin, founder and CEO of Starkey Laboratories, Inc. of Eden Prairie, holds his third annual charity fundraiser Saturday at the Minneapolis Hilton, featuring a dinner, music and comedy, some of his celebrity clients and friends will help him gross more than $1 million to help the company give free hearing devices for poor children around the world.

Scheduled performers for the sold-out gala (only corporate tables are left) include comedians Steve Martin, Norm Crosby and Red Buttons. Journalists Larry King and Walter Cronkite, and stars such as Tony Curtis, Robert Culp and George Kennedy will also attend.

Bill Austin fine-tunes a hearing aid.

Jeff Wheeler

Star Tribune

Austin says the celebrities volunteer for the event, which benefits the Starkey Hearing Foundation, a nonprofit founded in 1973.

Austin, a 61-year-old hearing-aid pioneer, may be the wealthiest and best-connected Minnesotan you've never heard of.

He has made hundreds of millions of dollars -- and he has spent a considerable amount of it on those who can't afford hearing aids, primarily through his "missions" to poor countries.

"It's fun to help a movie star," Austin said. "But the missions are the best work we get to do. You see these kids react when they first hear, and it's like you snapped on a light switch and let them hear the world."

Bill Austin's soundproof chamber

Jeff Wheeler

Star Tribune

Astronaut Buzz Aldrin, one of the first people to walk on the moon, is a client and friend. "We've been very supportive of their charity and we're really impressed with the things he does, not just in the United States, but around the world," Aldrin said in an interview.

Heather Whitestone McCallum, who in 1995 became the first deaf Miss America, uses a hearing aid designed and fitted by Austin to supplement her cochlear implant.

When she was touring the country as Miss America, Austin called, offering to help with her hearing. He met her at an airport.

"I really like the hearing aid, and I love the work he does," McCallum said. "What really impressed me was all the time he is willing to take to go on those trips to help poor children hear. He's not one of those business owners who sits around in his office smoking cigars."

A top entrepreneur

One business publication estimated Austin's personal net worth at $269 million in 2002, which places him among the top entrepreneurs in Minnesota. But many entrepreneurs have more familiar names and more public personas than Austin, who spends his time between his Minnesota headquarters and homes in Dallas and Rancho Mirage, Calif.

Austin says the wealth estimate "is fantasy," although he acknowledged that he has been offered more than $1 billion for his business.

"Forbes tried to put me on their list and I had to fight that," he said. "My wealth is all in my company, but my company is my spirit, my heart and my soul, and it's not for sale. So my wealth is meaningless."

His company, the leading hearing-device company in the United States, has revenues of about $400 million a year and employs more than 4,000 people, about 1,000 of those in Minnesota, according to Austin.

A lanky, soft-spoken man with a starch-white pompadour, Austin looks and sounds a little bit like a preacher. But he doesn't preach in poor countries, where he has given away more than 76,000 hearing devices to kids who may have never heard the sound of their mother's voice before.

"I'm kind of an ecumenical guy; I just believe in showing all people respect," he said.

A recent Fox Television news segment showed how Austin, his wife, Tani, and company employees volunteer to set up hearing clinics in Mexico.

As Austin personally molds each new earpiece to fit, the children shout with joy or cry out of fear when the device is turned on. One scene followed a boy who had never been able to hear back to his house. He discovered the bark of the neighbor's dog, marveled at the whir of a blender and squealed with delight over the sound of a flushing toilet.

"It's a disability that can be fixed," said Austin. "That's the tragedy. Hearing should be a birthright."

Starkey Labs is a quirky place where people with double or triple Ph.D.s work on futuristic audio devices in soundproof studios, and where Austin often pauses from his CEO duties to adjust someone's device on a grinder. One day recently he paused to examine the hearing aid for Walter Cronkite before it was shipped to Martha's Vineyard.

Despite its corporate size, there's a mom-and-pop feel to Starkey. (Tani works there, as do Austin's son and stepson.) Everyone calls him Bill. A nun on staff handles domestic requests for hearing aids for the poor. They don't outsource anything, and they even make their own tools and office furniture. "It's kind of old-fashioned," Austin said.

Justin Osmond, son of Osmond brother Merrill and the spitting image of Donny, works in the marketing department.

"Starkey has been very, very supportive of my family," said Osmond, who, like other members of his family, was born with a hearing defect. He joined the company 2 1/2 years ago.

One of Osmond's favorite stories is of a kid in Vietnam who was struggling with school before Austin and volunteers visited eight years ago and gave him a hearing device. The boy recently graduated as valedictorian of his high school class.

Humble start

Austin was going to be a doctor, but he dropped out of medical school while working part time at a hearing-aid repair shop. He saw hearing difficulties as an ignored part of medical care whose technology lagged behind other fields.

"There was a lot of room for improvement in the industry, and there was no morbidity," Austin said of his decision to quit medical school. "I wasn't going to kill anybody."

Austin eventually started his own repair shop, then bought out a struggling hearing-aid company, but kept the name. Since then, Minnesota has become somewhat of a destination for hearing-device companies, with several Starkey competitors located here.

Still, Starkey remains an industry leader. The company pioneered the hollow shells that fit flush in the ear. It was the first to offer a 90-day trial for products -- at a time when some hearing-aid marketers were seen as "unscrupulous," Austin said.

Austin's business has grown steadily over more than 40 years. But that changed when President Ronald Reagan acknowledged he wore hearing aids -- from Starkey's company.

"I had no idea one person had such an impact on an industry," Austin said. His company was overwhelmed with orders -- so many that they fell behind, overworked the staff and irked old customers.

"It actually cost us money and probably benefited our competitors," Austin said. "We weren't prepared for the sudden growth."

Austin's celebrity client list also continued to grow. Today, about 80 percent of the hearing aids are custom-fitted, and Austin personally fits all of his star clients. Sometimes, they come to the Starkey plant in Eden Prairie. On some occasions, Austin will fly to see a client. He also goes to Washington, D.C., and works on U.S. senators and congressmen (though he's "somewhat apolitical").

Austin has had the ear of Presidents Gerald Ford, Reagan and Bill Clinton, fitting them all with hearing devices. For the current president, Austin designed and fitted a piece that allows President Bush to hear the soft sound of a quail while he hunts, but which shuts down at the loud clap of his shotgun -- a way to protect the president's hearing.

"I consider this an art," Austin said. "And I consider myself the best fitter of hearing devices in the world. That makes me useful."

Unlike most heads of family-owned businesses, he said he won't turn his company over to his sons just because they are family. "They are very capable at what they do, but they are not capable of running the company," he said.

A public divorce

Despite his skills, and scores of humanitarian awards that line the hallways at Starkey, Austin's biggest media blitz might have come from his split with his first wife in 1992.

The case, which took nine years to settle, was featured in business and law publications because of its size and unusual nature. Austin tried to have the divorce heard in Texas, where he believed he would get a more favorable settlement. The case reached the Texas Supreme Court, where a jury decided Austin's ex-wife had no real connection to the state.

A trial was eventually held in California, where the couple owned a home, and where, because of the proximity to Hollywood, he first had met many of his clients. A jury awarded Austin's ex-wife, Cynthia Lee Dawson-Austin, $60 million plus interest in 1998, saying she was partly responsible for the company's success.

"I had my business long before I met her, and I'd told the family all along that they wouldn't inherit it," Austin said. "It was a crazy deal."

Austin would rather talk about the friends he has made while helping people hear. He became best friends with Gene Autry and was at his bedside when he died.

In general, Austin says, the bigger the stars, the nicer and more unpretentious they are. He has learned that comedians aren't very funny in person ("Steve Martin is very intelligent and serious"), and that the famous are often surprised by Austin's refusal to judge other people.

"When I was at [evangelist] Robert Schuller's Crystal Cathedral, I mentioned that [Playboy Magazine founder] Hugh Hefner had called me," he said. "You'd have thought I'd spoken of the devil himself."

"Judging people is God's job," Austin said.

Copyright 2003 Star Tribune. All rights reserved.