Leadership Profile: Tom Werner (Part 7)

SunPower went public in 2005, which is a monumental moment for most firms. It is always interesting to take note of firms who do not press the IPO, rather they wait for banks to begin courting them. Tom revisits that timeframe and explains SunPower’s progression during that period in thehistory of the company.

SM: You went public towards the end of 2005. What followed? TW: TJ Rogers is a Libertarian, and a big believer in Capitalism. The deal I had with TJ was that if we were successful we would take the company public. Sometime during 2005 a banker took notice of us growing. Our first quarter of 2005 was almost the same amount of revenue as our entire year of 2004. So the growth rate was beginning to catch attention, which brought banks circling.

In the summer of 2005, we did a bake-off of banks, and we went public in November 2005 which by most measures was a successful public offering. We were wildly oversubscribed and virtually everybody we met bought in.

SM: The stock was scheduled to start the day at $18. Well, when the stock started trading it opened up at over $27. TW: That gave us the funding to quadruple production in 2006. Again, we were buying equipment. We only had one line running, so we bought equipment for three more lines in 2006 with the funding from the IPO. Additionally, one of our customers liked our product so much they loaned us money to build one of the lines, so we really had two sources of funds.

SM: Who were your customers at this point? TW: Demand was incredibly high. The market was taking off, in part because of Germany and we can talk about that in a minute. Also, we had a unique product, and people really wanted it. There was a little hesitation because there have been so many false starts in solar technology which have never gone into production.

We matched up with some forward looking channel partners; one of them is Solon in Germany. They were making large, two axis solar tracking systems that needed high efficiency solar cells. Another one was Conergy, and a third one was Power Lite, which was North America’s largest solar systems company and two years hence we bought Power Lite.

We were able to have a very focused customer list, and that was very good for us because when you are growing so fast, if you can have a small group of customers to work with, it allows you to manage your outbound channel more efficiently. By Q4 2005 and 2006 we became public not only in terms of financing, but also in term of publicity.

Interestingly enough there was more attention in Europe and the Near East than in America, because that is where the markets were. Through 2006 we made some aggressive moves in terms of capacity expansion which turned out to be correct. We quadrupled production in 2006, and this year we will be doubling it yet again. Of course the number of people and the amount of revenue we have has gone up dramatically.

(to be continued)
(Part 6)
(Part 5)
(Part 4)
(Part 3)
(Part 2)
(Part 1)

This segment is part 7 in the series : Leadership Profile: Tom Werner
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