Businessman stays one step ahead of law

March 28, 1999

Laser and radar-scrambler company took in over $5 million.

He runs his "little" company from an old, scratched-up desk in a no-frills Doniphan Drive office building, with just seven employees. And last year, his 'little' laser- and radar-scrambler company took in over $5 million.

His scrambler technology disables radar and laser guns used by law enforcement, preventing them from getting a speed reading on a vehicle.

Michael Churchman, owner of Rocky Mountain Radar, saw his company's revenues jump 140 percent in 1996-97! while fighting off a then seven-year attempt by the FCC to shut him down.

"I'm suing them (the FCC), so we'll be tied up in the U.S. Supreme Court for a while," Churchman says. "And until the court makes the decision on whether or not to hear the case, and unless laws are changed, I will continue on with business as usual."

The lawsuit challenges the FCC's ability to shut Churchman down because of the regulation they're trying to use to do it, says Rocky Mountain Attorney Kim Seter.

"The FCC contends that Churchman's product broadcasts a signal which would be under their control," Seter, a Denver-based attorney says. "But his products don't broadcast a signal. So if the FCC wants to take his products off the market, they can do so, but they need to devise new rules to do it."

Are scramblers legal?
Until the issue is decided, Churchman's radar scramblers are legal in all states except California, Minnesota, Nebraska, Oklahoma and Virginia, and Washington, DC.

How?
"I designed this technology specifically to be legal," Churchman says. "The scramblers comply with all FCC regulations. They are reflective receivers, not transmitters, and leak no radio energy into the atmosphere."

So if they're legal, why aren't more people making them?
"This is technology I invented that no one else has," he says.

What do they do?
The difference between detectors and scramblers is that detectors beep to alert you that the radar is in the area. Scramblers won't alert you, but they scramble the signal, making you invisible to radar so the gun can't get a reading.

Two of Rocky Mountain's products are the Phazer Laser & Radar Scrambler and the Phantom Laser & Radar Detector and Scrambler.

The Phazer disables the X, K, Ka (superwide) and laser guns and runs $199.95.

The Phantom is a 360-degree combination radar detector and a forward radar/laser scrambler and runs $349.95.

Churchman is so confident about the effectiveness of his product, he offers a ticket rebate for speeding fines up to 15 miles per hour above the speed limit and a 3-year warranty. Out of the 50,000 units sold a year, he pays only about 100 tickets.

Churchman says that though he's in a business some might consider unethical, albeit legal, he sees it differently.

"Law enforcement using radar detection is strictly money-making driven in spite of what they say about it being used for safety," he says. "If they were being used for safety, detectors would be made mandatory in every vehicle and every officer could have a laser gun in their vehicles so drivers could see how they're doing and make adjustments. There wouldn't be any of this "hiding behind barriers" stuff or trying to catch them by surprise."

How'd he do it?
Churchman's foray into entrepreneurship began in the basement of his Colorado home in 1990. By day, he worked as a systems engineer for Texas Instruments in Colorado Springs, then he'd go home at night and work 'til 1 a.m. on the scramblers assembling and packaging each unit himself. The next day, on his lunch hour, he'd ship his orders.

He said he had purchased materials and equipment on credit cards accumulating about $80,000 in credit card debt at 20 percent interest.

Then, with wife Laurie Paternoster about to pull the credit-card plug, Churchman spent his last $300 on an advertisement in Wheeler Dealer magazine. He got about $1,500 in orders the first month, which he put toward more ads in other used-car national publications.

And the business began to grow.

It took Churchman about three years, he says, to get his company self-sustained and debt free.

He built his primarily mail-order business, he says, by selling his products cash in advance first and then by COD until he started seeing enough steady revenue to begin taking credit cards, which increased sales dramatically.

He has distributors nationwide that sell his product in nationwide publications such as Damark, magazines like Inc. and Fishing, and retail outlets such as Brookstone and national truck stops.

The company has sold about 300,000 units so far. Last year, Rocky Mountain sold 50,000 units and Churchman expects that number to double in 1999.

So if the FCC eventually succeeds in shutting Rocky Mountain Radar down, what's to prevent Churchman from moving his offices into Mexico or Canada and distributing from there?

"Absolutely nothing," he says.

Churchman says he's already a step ahead of the game in the event a change in venue - and with that, the inevitable loss of national distributors - becomes necessary. Rocky Mountain recently began a new "word of mouth" marketing campaign that offers monetary incentives to customers who refer business its way.

Truckers' little helper "We had truck drivers coming in all the time, saying how they told all their friends about the products and wanted to know if they could get some kind of referral fee," Churchman says. "So we decided to supply our customers with brochures and give them $25 per referral and the buyer a 10 percent discount."

Churchman said he's already seeing enough new business from the campaign that it's become necessary to add new phone and fax lines, and he plans to add two new employees in the coming weeks.

Churchman says in spite of all the difficulties running a business such as his, it does have its appeal.

"It's a real interesting business," he says. "When you're on the edge, you get to play with more advanced technology. It's electronic warfare for the consumers. We're just trying to level the playing field."