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Sybarus shows path to
rapid growth
"... from
day 1 we used budget allocations to fuel product development."
from the desk of Peter
Fillmore
October 1999
In January 1998 a start-up named Sybarus was formed in Ottawa, founded by
three expatriate Canadians, returning from California with marketable
skills in IC design. About 15 months later employment had risen to 35
people, and the employee-owned company was sold to Lucent Technologies,
one of the world's major technology corporations and a founder of the
modern semiconductor industry in its early days as Bell Labs.
Sybarus did a phenomenal job of positioning itself - to customers,
recruits, and ultimately to a major investor/customer. To get the inside
story, I talked recently with Richard deBoer, founding President, and
Nizar Rida, founding Vice President of Technology.
Richard opened by commenting 'The first day we opened up we had art on the
walls of our boardroom. We got two responses - we looked like a large
company, and we were managing our money wisely. Also, we got
state-of-the-art engineering workstations, so we could work efficiently.
We believed in what Terry Matthews was quoted to say, "Act like the
company you want to be," and we wanted to be a leader in our field.'
Nizar added 'We started earning money with consulting. But from day 1 we
used budget allocations to fuel product development: 30% of revenue to
product design, 50% to the consulting resources, and 20% to administration
and overheads. We believe in focussed work, so we had teams dedicated to
the different projects. The product developers did not have to worry about
consulting contract deadlines, and vice versa.' Sybarus were in their
offices 5 months before they had a bank line of credit. We discussed
several key success factors:
Marketing Strategy - 'We have three core beliefs about
this,' said Richard. 'First, be the best at what you do - concentrate on
what you are good at. Second, be confident. And third, be honest -
marketing is all about trust, since customers don't have time to fully
evaluate you.'
Niche Selection - Sybarus chose to specialize in design
of ICs for SONET (Synchronous Optical Networking) applications. As Richard
commented, 'This is the technology used today for fiber-optic
transmission, usually anything going further that 20 kilometers.' They
focussed on advanced designs for chips in the strategic 10 gigabits/second
speed range. Also, they offered fast development, setting up
infrastructure to be the most organized, efficient design house in this
niche.
Infrastructure - Nizar observed that 'Time to market was
very important - we worked hard on deciding how we could get things done
in an expedited manner. So we put a lot of expertise into setting up our
infrastructure. We had 5 people dedicated to setting up tools and
automating things to support the other 30 people. In one year we had built
a phenomenal critical mass.' Richard added 'Lucent and our Japanese
customers were amazed. Companies of 1000 to 130,000 employees were behind
us in their organization to do IC design work.'
Human Resources - Richard commented, 'A lot of our
marketing was done on the recruiting side. We told people that we were
going to do things first class, and we did it -set up a stock option plan,
a performance compensation plan, a real board of directors. Even things
like our choice of legal firms (we use Labarge Weinstein) was important to
send a signal that we think big. All these things gave confidence to our
recruits.' Sybarus never advertised; people just started showing up
through referrals. Applicants included married couples, willing to risk
the entire family income on a start-up.
Sales - Sybarus had no problem finding customers - they
visited prospects, but had no formal sales or marketing organization.
Their strong positioning came from focused team-building of expertise that
was in demand around the world. Richard added 'We were competing against
big companies like Cadence and Viewlogic. Part of our strength was to
point out that we had invested everything in this company, and had no
choice but to succeed.' The approach was to be totally open and honest.
Initially they listed credentials with previous employers. 'We didn't spin
the story - that may work for bigger companies, but it can't work for
start-ups. Lucent was an early client, trusting us that we had good
expertise. And we proved ourselves. Within a month, they expressed
interest in investing to help with growth financing. We put the offer
aside, but came back to them a year later when we had decided to seek
outside capital.'
In summary, Sybarus focussed on key strengths, giving good value to
customers and recruits, both in perceptions and reality.
Your comments, questions, and suggestions for future articles are welcome
fillmore@westpark.com
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