Leadership Profile: Tom Werner (Part 4)

During its early phases SunPower was, out of necessity, not as focused of a company as it is now. It engaged in several other business areas to ensure positive cashflow, yet such activities detracted from the development of high efficiency solar cells which became one of its core competencies.

SM: Did SunPower engage in any other markets during the early years?
The company, while it was working on its concentrator technology, did other things for revenue as well. Among the things it did was make high-efficiency solar cells for race cars, high efficiency solar cells for the Helios Aircraft, which flew to the highest altitudes of any aircraft ever.

They also realized that if they could turn light into electrons, so they could use that technology to make sensors. You are probably aware that many electronic devices such as laptops and cell phones have infrared sensors in them. SunPower realized they could make the sensor end of that, and became a significant player in that market. The unfortunate thing is that the market, in terms of revenue, is not that big.

Along came 2000, 2001, and the company was going from project to project to earn revenue while pursuing concentrator solar power, and they realized this was getting to be a long road and began looking for new ways to proceed. They wrote a business plan and were selling it to VCs in 2000, and were getting a cool reception. Somewhere towards the back half of 2001, they were almost ready to give up.

They had lapsed the previous project they were working on to the point that payroll was in danger. The founder of SunPower went to school with the CEO of Cypress semiconductor, and they knew each other in an intellectual capacity, and ran into each other every five or ten years. TJ Rogers, the founder of Cypress, would generally be helping Dick Swanson along with ideas and support.

When they ran into each other again in late 2001, Dick told TJ about the new high efficiency solar power which they used for concentrator solar power. He said, that he can take the high efficiency solar cell to the main stream voltaic market, but the challenge was to make it low cost.

One of TJ’s claims to fame is to be able to compete in difficult, low priced semiconductor markets. He had been able to compete successfully in the memory market against the Asian firms, which in the 1980’s and 1990’s were the Japanese. Since TJ had enjoyed success against some of the best competition in the world in semiconductors, he knew he could get the costs down.

Two weeks later TJ wrote a personal check which allowed Dick to meet payroll, and then TJ pursued his board at Cypress over a course of three board meetings and a year to get Cypress semiconductor to invest in a two step acquisition of SunPower. The first step was to buy 60% and then provided SunPower hit certain milestones, they would buy the minority shareholders at a predefined price. That happened in 2002, and I showed up in 2003.

In 2004 we materially hit the triggers to buy out the minority investors and became wholly owned by Cypress with the exception of the employee ownership. In 2005 we took the company public. We sold 15% of the company to the public, and subsequently we have raised funds twice and sold another 20% of the company.

(to be continued)
(Part 3)
(Part 2)
(Part 1)

This segment is part 4 in the series : Leadership Profile: Tom Werner
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