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SPIE Professional October 2006

Continuous Improvement

Growing an optics business beyond its early years.

By Robert E. Fischer

So, you want to start an optics company, eh? Well, read on and learn about starting and growing an optics business, including the speed bumps and minefields that stand before you, as well as the gratification that comes with your hard-earned success.
The Early Years
Ever since I can remember, I wanted to start a company, and to do that in the optics field that I love so much -- that's incredible. I have been interested in optics since before I was in junior high school when I bought a Criterion cardboard tube telescope. I wouldn't trade optics for any other field.
When the thought of starting a company first hit me for real, I had been out of school (the University of Rochester) for nearly 20 years and was an optical designer/engineer at Hughes Aircraft Company. One day I asked myself whether having an assigned parking spot and a simulated walnut desk would provide me with sufficient career goals and incentives, and the answer was clearly no.
As I thought further about the analogy of jumping out of a plane without a parachute, though, reality immediately set in. I quickly realized that I needed a stable and reliable paycheck. At the end of every week I needed someone at my door with a check in hand for $1000. This would result in a salary of approximately $50,000 per year, which was not too bad for the late 1980s. This check had to be there, with no exceptions, every week of the year, "come rain or shine." If I wanted to go on vacation for two weeks or attend an important SPIE conference, the checks would have to continue to arrive. This initial realization was quite an eye-opener, and made me think very carefully about cash flow and cash management.
Fortunately, I had other plans emerging. I had been in discussion with Ernst Leitz Canada, now part of Raytheon, for several months about opening an office in the Los Angeles area for technical marketing and customer liaison work. When I brought it up for serious discussion, I found that they were thinking along the same lines. The result: in January of 1987 OPTICS 1 Inc. was born as a California corporation.
Maturing Nicely: Years Three through Five
Most memorable during years three through five were our first exhibits at SPIE and the excitement of preparing a captivating table-top exhibit, our first brochure, and the best part was that it was all real and all happening, right in front of my eyes. I almost had to pinch myself a few times to confirm that it was not a dream.
For most of this time period, people coming by our booth would stand in the aisle looking at the display, and invariably ask: "Now, just what do you do?"
This was a key question we had to answer not just for potential customers, but also for ourselves and the company's direction as well.
While we had been on a constant search for viable products, our stronghold from the outset had been in optical system design and engineering. After working with Leitz as our primary customer for our first two years, we then became independent and grew rapidly mostly through consulting work. In effect, we were like "guns for hire," an image I've never liked. Breaking out of this image was partly responsible for moving into higher-level system work and hardware.
In our field of optical system design, engineering, and production, opto-mechanics plays a critical role in producing hardware that works, and this synergism has proved to be a natural segue into the hardware arena.
Ultimately the answer to our customers was: we deliver innovative, cost-effective engineering solutions along with hardware that works. So, while we continued our search for our own viable products, this became a real business model.
Rolling Right Along: Years Six through 10
A key ingredient to our long-range success has been the U.S.-government-sponsored Small Business Innovation Research (SBIR) program. We have won approximately 26 Phase I programs, 11 Phase II programs, and one significant Phase III program.
Our Phase III program with the U.S. Navy is a multispectral imager for surveillance applications. It has been highly successful, and it shows clearly how the government can obtain low-cost, quality products quickly by using the talents present in a small business.
While SBIRs are truly a wonderful vehicle, they can sometimes dilute your efforts in areas critical to your growth. A careful and flexible balance between SBIRs, product development, and hardware and manufacturing is required. Do keep in mind that SBIR topics are to a large extent government and military, which means funding opportunities are not necessarily perennial guarantees, and may not be for every business.
Healthy Expansion: Years 11 and Beyond
Once a company has sufficient momentum, you can relax a little. Let's face it, though, this is a 24-hour-a-day job. This brings me to two very important keys to a successful business: growth must be carefully planned, and you need a superior team to execute the plan.
Perhaps the most important strategic move I made in recent years was to bring in Dane Hileman as our new president, a talented and seasoned business professional in the optics field. Dane and I get along splendidly, and his professionalism and honesty is surely felt by our customers and employees. I knew Dane professionally for at least seven years prior to his joining us. I've always believed that the management in a small business should be shared between two people talented in their respective technical and business management disciplines.
I subscribe to the philosophy that to be successful you should surround yourself with people who are smarter than you.
One single item that perhaps causes me the most concern and keeps me up at night is the recruiting and retention of high-quality technical staff. The amount of time and energy that it takes to bring a new employee up to speed can be well over a year or two, and sometimes a small salary increase is all it takes for them to move. People are indeed your biggest asset.
For me, one of the greatest joys of the job is the opportunity to work on state-of-the-art projects with highly talented people on our staff and with our customers' staffs. This experience brings a new and exciting challenge every day.
Advice Given and Gained
Shortly after starting in business you will find that suggestions will be offered by your friends, relatives, and almost anyone you meet on the street. Some of the more memorable and valuable I have received are:
"Always appear bigger than you really are." For example, when you exhibit at an SPIE conference, your company is making the statement, "This is who we are." Use the opportunity to show the world that your company is a major player in your field. At OPTICS 1, we went from a table-top exhibit to a booth, and have just begun using double booths at selected shows. Even better than this is an island space.
"While you must be firm, you must also be tender. After all, you either win or you lose." Managing people is not easy, and you have to be strong yet diplomatic. No waffling here, you win or you lose, and you really want to win.
"Do what you do best." After all, you are an expert in your field, so take advantage of this.
"Would've, should've, and could've." Hindsight is diffraction limited!
"When hiring, look for someone who is willing to work a good solid 7, 8, or 9 hours a day, and a half day on the weekend." If your employees put in a good, solid effort and are willing to "go that extra mile" when required, then you are in fine shape.
"Hire people who have 'fire in their bellies.'" Your best employees will be enthusiastic and professionally aggressive -- strong team members who want your team to win are the folks you want on your side.
Excellent advice that I've discovered myself is that professional societies and organizations can be an immense help to your business.
Having served as president, symposia chair, treasurer, and other roles within SPIE, I feel strongly that SPIE, specifically, can help you a lot in your entrepreneurial efforts.
Perhaps one of the more significant reasons that you should consider participating actively with SPIE is the networking opportunities that you will be able to take advantage of. Throughout my working career, and especially after founding OPTICS 1, the ability to network with and get to know people on a professional as well as on a personal level has allowed me to meet some of the most talented people in the optics field. This is gratifying and just plain awesome.
You will find that with a little bit of socializing during coffee breaks or at a reception you will be able to meet scientists and engineers as well as dozens of experts in virtually every aspect of the optical technology field, both technical and business related. I, personally, may never have had the opportunity to meet and get to know luminaries such as my dear friend Warren Smith if it were not for networking at conferences.
And here's a little hint: when given the opportunity at an SPIE luncheon, sit next to someone you have never met before. Or sit at an empty table -- it will fill in with people. And take my word, you will occasionally meet people who make the whole trip worthwhile. It has happened to me many times.
Ultimately, to be successful you should surround yourself with a talented business person and a highly talented, dedicated, and motivated engineering staff. Work hard, participate in SPIE activities, and if all goes well, your goals and objectives will come to fruition.

Coast to Coast
Prior to starting OPTICS 1, I worked at ITEK in the Boston area, home of the famous Route 128 High Tech corridor. I also worked in Southern California during this time. You will find (surprise, surprise) that certain people and certain technologies tend to migrate to one coast or the other, with Silicon Valley being the best example.
With an office on each coast, the advantage of being close to more potential customers is undeniable. The inevitable extra travel required, as well as sharing of equipment and in some cases personnel, can be a challenge. However, if I had to do it again, I would probably do it the same way.
We chose to have our home office in California handle primarily commercial industrial and medical systems, and our East Coast office handles primarily military and government work. This has proven to be quite successful.
In the end I think having two different offices, one on each coast, was a positive move for our company as it gives us greater opportunities. However, you have to live with your decision, so think it through carefully.

Robert E. Fischer
SPIE Fellow Robert E. Fischer is the founder and CEO of OPTICS 1. With offices in Westlake Village, CA, and Manchester, NH, the company designs, develops, produces, and supports precision optical assemblies, subsystems, and integrated systems.
Fischer holds a BS and MS in optics from the University of Rochester (Rochester, NY). Prior to founding OPTICS 1 in 1987, he was assistant manager of the Lens Design Section at ITEK Corp. and then chief scientist at Hughes Aircraft Company.
Fischer has served SPIE in a variety of roles including president in 1984, chair of multiple committees, and has been the SPIE treasurer since 2002. He was awarded the Gold Medal of the Society in 2000 and the Albert M. Pezzuto Award in 1986.

DOI: 10.1117/2.4200610.007