Turn Around Series: Jerry Rawls, Finisar (Part 3)

Saturday, March 10, 2007 | 6 comments

To support the company initially, Finisar relied on providing consulting services. It’s a very common way that companies bootstrap themselves. I have done it myself.

SM: What kind of Consulting did you provide? Like System Integrators? JR: Well, actually, the first customer would be Raynet themselves, but we would have to get others soon enough. We did not have any outside investors, so it was clear that we did not have enough money to support both of us in the company. So, I stayed at Raychem and he went off and got started. At the end of the year I left Raychem and joined him fulltime.

Now, in the mean time I had worked nights, weekends, vacations. I made calls on customers, I visited several places to try to generate business, and I thought we had some opportunities for success. Anyway, this is getting to be a long story, but off we went, and we had a company and it was two guys, then it was three, and four and five and that was about it for a while. We did a lot of contract design services in those days to keep ourselves afloat. It was our money, we had bootstrapped the company, we had to be profitable, so we had to be able to cover our costs and that meant we could not expand much.

SM: So you were bootstrapping the company by doing consulting for a while, how long was that? JR: While we were doing product development we supported ourselves, probably, for four years doing mostly consulting work.

SM: Four years, that’s a long time. JR: We were doing product development in high speed fiber optics. Our product goal had become trying to develop high speed fiber optical links for computer networks, not telecommunications networks. At the time Alcatel, Nortel and Lucent in collaboration with Bell Corp, pretty well controlled the telecom market for optical components and we did not think we could really compete with those guys given the limited investment that we had in this company.

So, we had to find a place where there was a need that was not filled, or need that we could see coming that wasn’t filled, and some innovation that we could bring to the opportunity. We targeted high speed networks, that is gigabit links for computer networks as opposed to telephony. We spent a fair amount of time with the workstation manufacturers at the time. Daisy, Apollo, IBM, Sun, and they all had very similar outlook and their outlook was “we’re going to need more bandwidth for these workstations than we have today”.

The fastest connection they had at the time was fast Ethernet. So, we could see that Gigabit per second for connecting networks was a big deal, and our dream at the time was to be able to put an optical device on every PC and we still haven’t gotten there.

Along the way, in the early 90’s, IBM was defining a fiber optic link for computer networks they called fiber channel. These were the days when Akers was the CEO of IBM, and fiber channel, their vision, was going to replace Ethernet, token ring, SCSI. They would have one protocol and that would be fiber channel. Well, Akers got fired, Gerstner came in, and they decided this project wasn’t as strategic as they previously thought and they disbanded the project. Fiber channel persevered, and it evolved into a storage networking standard, and it was the basis of the SAN market.

This segment is part 3 in a 14 part series Segment 4 →
Jump to part: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14

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