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Fast 50 Secrets
Good products + good people (divided by a specialized market = rapid growth
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Business New Haven
12/13/1999
By: Susan Banfield
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Local high-tech companies which made it onto this year's Connecticut Technology Council Fast 50 list are as varied as they come, ranging from a biotech firm to a software manufacturer to a mechanical engineering group.
But the blueprints which in each case led to the 30-percent-or-higher growth rates that earned them their places on the prestigious list are not quite so varied as their products. While some characteristics are unique to each company - certain marketing approaches, for example - the firms outlined below all share a specialized focus on a carefully chosen niche market, and an insistence on the highest quality in both staff and product.
TranSwitch Corp.
An especially talented and well-matched group of engineers has been key to TranSwitch's impressive rate of growth (see related story, page) The Shelton firm was founded in 1988 by a group of engineers who had worked together in ITT's advanced technical lab, also in Shelton. The lab had been purchased by the French company Alcatel, but then closed by the parent firm shortly thereafter.
A few of the center's engineers regrouped and formed a company to develop, market and sell microchips for telecommunications applications. "I was able to collect a team of known quantities," says Sandanu Das, TranSwitch's president, CEO and chairman of the board.
Das recalls that while it was not easy to convince venture capitalists that the group's idea was one worth betting on, investors eventually were won over by the exceptional quality of the team of people that had been assembled.
"We have a deep understanding of the telecommunications market," Das says. "We have certain skills that have helped us to emerge as leaders."
As TranSwitch has grown, the company has made a point of expanding into areas where good engineers are easy to find. Today there are TranSwitch offices in Raleigh, N.C. (near Duke and the University of North Carolina/Chapel Hill), Boston, and in New Delhi (where the Indian Institute of Technology is located).
"We are now working on opening an office in Lausanne, near the Swiss Federal Institute of Technology, a world-class institute," says Das. Today TranSwitch employs 140 people in Connecticut and 60 people worldwide.
Also central to TranSwitch's growth, however, has been its decision to remain highly specialized and very focused. The company is one of very few that make microchips for telecommunications.
"Every time you send an e-mail or make a phone call, very likely you will use one of our chips," says Das. "There are few other competitors."
TranSwitch has also positioned itself as a company that can provide customized solutions for tough problems. One example Das cites is that of a customer who sought to bring optical fibers directly into its system, and needed a chip that could handle the resultant extremely high speeds, yet have very low power requirements. TranSwitch would make them just the chip they needed.
After two decades in the industry, Das has still advice for fellow high-tech companies looking to achieve rapid growth: "In order for a company to be able to grow rapidly, it has to be very time-to-market conscious, be able to bring new products very quickly to market. You must be very flexible, as technology changes very fast."
Precision Combustion
Precision Combustion Inc.'s team of scientists have developed products that are mire than specialized - they are unique.
PCI's two main products are catalytic combustors (burners) for gas turbine engines that burn at a temperature low enough to prevent the formation of the pollutant nitrous oxide, and fast lightoff catalytic converters for automobile engines that kick in within ten seconds of ignition, thus eliminating the bulk of automotive pollutants, which are produced in the 60 to 120 seconds that typically elapse before standard converters kick in.
"We had some ways in which we could have grown," says Precision Combustion President Kevin Burns. "It's hard, when you have a group of scientists, to stay focused." But Burns points out that making sure PCI did not "grow uncontrolled" has been one of the keys to its growth. The company has been focused on products using catalysts since its founding in 1986.
PCI has won several awards for the quality of its technology, another factor in helping it to grow. Its chief scientist, William Pfefferele, holds over 70 U.S. patents. The quality and importance of PCI's work has also been recognized with sizeable government R&D grants, and by a commitment from Westinghouse to work with the company on the combustor.
In addition to having superior technology and a disciplined focus, Burns says good people has been the other key factor in PCI's growth. The company currently employs a staff of 38, 12 of whom hold doctoral degrees.
Burns believes that the firm's Science Park location has been helpful in attracting and retaining a high quality staff, as it makes for an atmosphere in which people enjoy coming to work. Other Science Park advantages include the ease of acquiring more space when needed, and the ability to learn from neighbors who themselves were experiencing rapid growth.
Burns looks forward to still more growth in the future. He hopes that some day PCI converters will be used in all automobiles, and is confident that the gas turbine combustors, currently in the development stage, will soon make their way to market.
Nature Plus
Founded in 1992 by Sheldon R. Murphy and Brian P. Murphy, Nature Plus is a biotech company producing a variety of enzyme products used in a wide range of applications, from odor control to cleaning and clarification to cosmetics and toiletries. The company markets both branded and private label enzyme-based formulations, supplies both single ingredients that are used to enhance an existing formula as well as entire formulations. "What we're doing is unique," says Nature Plus sales and marketing director Colin Stauffer. "We provide an alternative to what's out there - a natural, safe alternative that appeals to the environmentally conscious market. Sometimes we feel we're a superior product, other times we're a safer alternative."
Nature Plus' NaturCare line, for example, consists of a range of cleaning, odor control and clarification products for use in homes, health-care facilities, pools and with pets. The products work by breaking down the substances that cause odor and grime, rather than by masking them.
While Stauffer believes that the quality of his company's products has played an important role in its 540-percent sales growth from 1992 to 1998, he says marketing has been even more important. "We have a very good marketing process," he says.
Realizing that several of its products (particularly its soil stabilizer, which increases longevity and decreases maintenance on dirt roads) are in demand in developing countries, Nature Plus has concentrated particularly on international marketing. It has also made use of services provided by the U.S. Department of Commerce and the state's Department of Economic & Community Development to help qualify distributors and forge connections abroad. Also, Stauffer adds, "We have a very competent multilingual marketing staff."
The result has been an export sales increase from seven percent of total sales in 1994 to 49 percent in 1998. In 1999, the company won the Governor's Award for Excellence in Exporting.
Nature Plus' Stratford location has likewise been an advantage, Stauffer says. It's close enough to New York to conduct an international marketing campaign, yet its low cost makes manufacturing viable.
Stauffer says the company anticipates continued growth over the next few years. "A lot of time has been invested over the last two or three years," he says. "We will see the capitalization of our efforts of the last few years." He adds that the emphasis will continue to be on international marketing.
Information Marketing Associates
"We focused like a laser on something we could really be good at," says Al Subbloie, president and CEO of Information Marketing Associates (IMA), speaking about his company's 15-year history. What IMA chose to focus on was call centers, and the software that runs them.
IMA found a way to set its product line apart from other call-center software on the market. It did so by maintaining a strong customer focus.
"Customers care about speed, accurate information and not having to repeat themselves," says Subbloie. "Every piece of technology we've built has been created with the customer in mind." He cites as an example software that, when a customer's call is transferred, transfers the computer screens for his account along with the call.
Currently IMA is transitioning toward a whole new suite of Web-based applications. "The Internet and the Web are a huge growth engine for us going forward," says Subbloie. "They are a huge impetus to growth." Still, IMA remains focused on providing solutions that, even in the realm of e-commerce, will facilitate customer interactions.
Subbloie notes that much of IMA's growth - which has averaged 31 percent annually over the last five years - has come through geographic expansion, rather than from new product lines. The company currently has customers in Europe, Latin America, Asia, Australia, the UK and Japan.
"People are everything," Subbloie says in speaking of the factors that account for rapid growth of technology companies. "In technology, people and ideas are mostly what you have. And knowledge and ideas come from good people."
He acknowledges that the technology labor pool in Connecticut is "sometimes a challenge," with unemployment so low it is making it difficult to find quality trained people. Subbloie believes IMA has done well in the personnel arena, though, because the company's distinctiveness has attracted good people. He describes IMA's 280 employees as "a great team."
Another often overlooked, yet major, factor in rapid growth, says Subbloie, is the culture of IMA.
"Companies have cultures, and they permeate heavily." He says the kind of culture he has tried to foster at IMA has been one of teamwork, creativity and hard work - but with enough room for employees to have a life. With a track record of successive annual growth (except for 1999), for IMA, the formula seems to be working.
Bassett Computer Systems
Bassett Computer Systems was founded in 1984 by Richard Bassett, the firm's president and CEO. Over the last five years, the company has grown several hundred percent. With dozens of other companies in the state providing similar services - business computing solutions - how has Bassett pulled it off?
The company did make the wise decision to specialize in companies with between five and 50 computers, a segment of the market that tends to be underserviced. Still, Bassett attributes most of his firm's growth to marketing.
"We've had a very proactive marketing plan," he says. "We made a decision we're going to do this for real. If we're going to be known, we have to spend." He has used TV, direct mail, fax and e-mail to get the word out about the company. He makes it a point to talk to the press every chance he gets.
In addition, Bassett is convinced that no computer firm will be successful unless the owner or general manager is willing to work at least 80 hours a week, and to read everything he can, talk to everyone he can, go everywhere he can.
"This is a very difficult business," Bassett says. "Things change very quickly." Needless to say, Bassett has followed his own advice, putting in long hours in order to keep abreast of his rapidly changing field.
The result has been a client base that covers all of Connecticut. (Bassett says his company's North Haven location is ideal, enabling him to reach just about anywhere in the state within 45 minutes.) Recently, the company has begun moving into Massachusetts and New York state as well, and has done a number of roll-outs for national companies based in Connecticut.
Bassett has been able to retain clients and attract quality personnel because of its focus on professionalism. "Where we do extremely well is we actually show up, we're extremely professional," says Bassett.
What does the future hold? True to his aggressive approach, Rick Bassett says his next goal is to make the Inc. 500 list. The nationwide one.
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