My workplace from 1989 – 2001, until the buyout by Spirent in 2001.
In the summer of 1989, I was recruited by a headhunter to leave Atlantic Research Corporation, just as it was being acquired by Telenex, and join Hekimian Laboratories to become product manager of its new T::DAX digital cross-connect switch. That’s a mouthful that warrants some explanation.
First off, I’d had little experience with headhunters and wasn’t actively looking to leave ARC, but it was flattering to get noticed and recruited. We knew our Teleproducts Division at ARC was being shopped around for sale by ARC’s corporate parent, Sequa. Telenex Corporation of Mount Laurel, NJ, a direct competitor — particularly for my product lines — completed their acquisition in August 1989. Telenex made noises about keeping me regardless of what became of my product lines, but I was faced with the prospect of my job moving to NJ sooner or later. Other than access to better cheesesteaks, there was nothing attractive about moving to South Jersey.
Hekimian was an indirect competitor with ARC, in adjacent telecommunication markets, building test systems for similar types of networks. Hekimian did more business with the large phone companies whereas ARC largely marketed to corporate end users and government customers. The T::DAX was a new T-1 (or DS-1) digital cross-connect developed in a joint venture with an Israeli company, Tadiran. It represented an appealing chance to work on new technologies in a strategic new initiative for a new set of customers against a new set of competitors. I didn’t really know that all those “news” actually added up to a reduced chance of success, but it was a pretty easy choice to move ahead. I figured one way or another I would learn a lot and it was a step forward.
The interview process went quickly and I got an offer from Hekimian but it was a disappointingly small step up from my salary at ARC. I decided to hold out for more, wanting to crack the $50K threshold. After a tense few days, they came through and I started as a Product Manager at Hekimian in September, 1989. As a memento, they gave me a prototype of the DS-1 interface board that would be used in T::DAX. It didn’t work, but it looked cool. That should have been a clue.
Hekimian at that time was located in a single building at 15800 Gaither Road in Rockville, just off I-270 and Shady Grove Road. For the first several months, I commuted there from our home at Chrisland Cove in Falls Church, fighting traffic along the Beltway, crossing the American Legion Bridge into Maryland and up I-270. At this point, Barb had been commuting daily for several years to Baltimore in a vanpool that left at obnoxious pre-dawn hours and returned far earlier than she wanted. We loved our Chrisland Cove home but with us both commuting through nerve-wracking, often standstill traffic into Maryland it became clear something had to change. In the winter and spring of 1990 I did a lot of shopping for homes in and around Columbia, the only sizeable community that was more or less equidistant from our two jobs. By April, we chose our new home at 9808 Davidge Drive in Columbia.
Once we were in Columbia, I experimented with various commuting routes, eventually settling on a 45-minute cross-county back-road route across Brighton Dam, through Brookeville and down Redland Road. It was long and winding, and quite pretty except for when it rained and the bridge near Brookeville flooded.
When I joined Hekimian there were maybe 200 people in the 21-year old company. It was named for Dr. Norris Hekimian, who by the time I arrived had retired but would show up occasionally at company events. I never really knew him but he was deeply admired by the employees who had been there from the start. Norris founded the company in 1968 and sold it to Swedish conglomerate Axel Johnson, Inc. in 1983.
Axel Johnson largely kept its hands off the day-to-day workings of Hekimian. The company was actually run by one of the other co-founders, Dr. Bob Ginnings, who was a brusque, intimidating giant of a man. Dr. Ginnings kept his finger on the pulse of everything that happened at the company, sometimes oppressively. My immediate supervisor was Mike Tesoriere, the VP of Sales who had primary responsibility for the T::DAX joint venture.
I went on a crash course educating myself about telecommunications transmission standards, protocols and products. There were few others at Hekimian that could help much, either because they didn’t have time or had little exposure to the particular corners that I needed to know. I read lots and lots of magazines and began attending conferences and trade shows when I could. The folks from Tadiran were helpful about the particulars of their machine, but they were in Israel, hard to reach, and knew very little about the specifics of the US market — that was our job.
As Product Manager, it was my responsibility to develop marketing materials for the U.S. market and launch the product (once it was ready) to our sales force and potential customers. The T::DAX was a major new development for Tadiran and was targeted to be ready for initial shipments about six months from the time I came on board. That schedule proved to be optimistic as technical delays began to mount.
Tel Aviv Hilton
As the product got close to launch in 1990 (July?), I went with a team of Hekimian folks to Israel for a week of training and hands-on orientation. Tadiran was headquartered in Petah-Tikva, a suburb of Tel Aviv. We stayed in the Tel Aviv Hilton, a very nice hotel right on the beach. I enjoyed exploring the boardwalk that ran along the beach, and dinners in the nearby old town of Jaffa. I felt safe the whole time there, but was dismayed to learn a bomb exploded on the boardwalk a week after we left.
We had one day off during our visit and the Tadiran folks arranged a tour of Jerusalem. It was one of the most memorable single days of my life. Jerusalem was little more than an hour’s drive from Tel Aviv, giving a sense of the compact scale of the country (approximately the size of New Jersey) and the closeness of its neighbors (is that even the right word?). Seeing the Dome of the Rock, Wailing Wall and Church of the Holy Sepulchre all in close proximity was mind-bending. I’ve never felt so palpably aware of history and the weight of so many cultures coexisting warily on the same patch of ground. There were several spots where you could peer down 30-40 feet through layers of history going back to Roman occupation and beyond, further amplifying the immediate sense of history you were walking upon. I felt an almost tangible aura of one of the world’s most sacred spaces. It was remarkable, and I’m grateful to have had the opportunity to spend even one day there. I’m sure I took photos that day and on the whole trip, but they are somewhere waiting to be found.
Over the first year, we put together marketing material and technical descriptions to introduce T::DAX to our sales teams. They, in turn, began identifying decision makers in the transmission departments of the phone companies. Before long, however, it became apparent that selling test equipment — which our sales teams knew how to do — was a different proposition than selling mainline transmission equipment. Decisions were made in different departments so there were new contacts to cultivate, and we learned just how high and rigorous the hurdles were to introduce a new piece of transmission gear in the public phone network.
We got deeper into the market by exhibiting at a number of major telecom trade shows and attending standards-setting forums. Over the years, I participated in dozens of trade shows such as SuperComm, InterOp and Network World in cities including Las Vegas, Anaheim, Dallas, Houston, San Antonio, New Orleans, Atlanta, Orlando, Chicago, Washington DC, Baltimore and Boston. I’m hard pressed to identify which ones I went to in which years, but there were more than enough. Two of the first were WAVE Conferences in Baltimore in 1990 and 1992, my first visits to the Baltimore Convention Center. That conference, run by Bell Atlantic, gave us nice original prints which I framed and still hang proudly yet obscurely in our house.
One of the best industry forums specifically for digital cross-connects was held annually in Banff, Canada by Bell Laboratories. I was delighted to attend that one for several years in a row. Each trip included some time to wander around the incredible scenery of Banff and I got to know the town’s bars and restaurants pretty well.
We pushed hard on T::DAX from 1989 through 1991, and had some success with trials, but had little in the way of actual sales. It became apparent that cracking the North American market was going to take longer and cost more than Hekimian was willing to invest. Ultimately, Tadiran had some international success with its cross-connect, but it never gained much traction in North America.
Meanwhile, Hekimian’s main product lines of digital test equipment and network management systems were growing rapidly along with the newly deregulated market. It was decided by forces higher than me to close down the T::DAX effort in 1991 and I was relieved they wanted to promote me into marketing and product management for Hekimian’s line of network management systems. Like at ARC, the network management systems were kind of second fiddle to the digital test equipment, but sales were growing and there were few others at Hekimian in marketing roles.
Around 1991, we shifted offices to a nicer, newer building at 15200 Omega Drive, in Rockville, occupying most of the three floors. Happily, it included a cafe on the ground floor which made getting lunch much easier.
One of my early projects was developing the user interface for a new network performance monitoring system called the PM Integrator. One of the challenges at the time was that our phone company customers were locked into using IBM 3270 terminals and their limited set of characters. I spent months figuring out screen layouts and how to display results. I took prototypes to customers in St. Louis and San Antonio to get feedback, and later babysat initial trials of the system in Houston. It was gratifying to see veteran phone company techs get the hang of the system and generally praise it. It was even more gratifying when companies like Southwestern Bell decided to deploy the system throughout their region.
I took on responsibility for advertising and developing articles to place in trade magazines. One of the earliest ads I developed was this REACT 2000 fellow standing in the test unit. I cooked up the concept, wrote the copy, went on the photo shoot to get it right (including hiring the model, approving his wardrobe and figuring out his exact poses), and decided where and when to place the ads. In those good old days, it cost several thousand dollars just for the photography, more to get it all laid out right, and then many thousands more for actual placement in various magazines. No wonder the advertising industry imploded with the Internet.
Trade magazines were a primary vehicle for getting word out about our products, but advertisements were only a piece of the puzzle. Placing an article that explained your product in more detail, often built around a customer story, was usually more valuable. Advertising was kind of a quid-pro-quo for getting articles placed, though the magazine publishers always claimed that ads did not buy editorial content (they did). I placed lots of articles, often ghost writing and always editing them, sometimes getting a byline. Here is one under my own name (I didn’t choose the animal artwork, though I did work with the magazine editor on the jungle theme). There are more examples at the end of this post, extra credit for actually reading any of them.
By mid-1991, I became Director of Marketing for the whole company, with responsibility at various times for teams of people dealing with trade shows, marketing materials, advertising, technical writing, proposals, competitive analysis and internal communications. My own tasks shifted from developing materials myself to overseeing teams of others, hiring staff, identifying contractors and consultants, managing budgets and projects and developing longer term product and marketing plans. My boss, Mark Posluszny, VP of Marketing, who had been recruited from tech companies in California, was a good guide and mentor.
We worked to present customers with an integrated family of operations support systems that offered an end-to-end approach to network testing and operations. We cooked up a family of advertisements that Hekimian used for several years. They weren’t especially wonderful, but at least they all had a common look and identity that we could build on.
We put a lot of effort into a glossy brochure that painted a complete picture of our products and service offerings, featuring a number of our key people. I did most of the writing and design of this piece, and it became a very useful calling card for the company for a number of years. It had a long shelf life and did a good job painting an aspirational picture of what our company and products were about. I’m still pretty proud of it, and pleased that the people we featured were good folks and friends who stayed with Hekimian for most of the decade.
Hekimian’s customers were large Regional Bell Operating Companies such as Bell Atlantic, Southwestern Bell, Bell South, and US WEST, other large network providers like Sprint and WorldCom…basically many of North American’s largest telecom service providers except AT&T (which still used its own proprietary systems). Our systems enabled the carriers to troubleshoot digital services like DS1 and DS3 circuits they sold to large private end users. Our control systems were in large network operations centers, used by scores of NOC technicians at a time, while our remote test and access units were scattered in hundreds of central offices throughout the region.
As we became better at packaging and bundling our systems, our contracts grew from millions to tens of millions of dollars annually, and our proposals kept getting larger. We needed to project the image of a world class provider of equipment and services, hired a number of sales and technical people from our customers, and spent a great deal of effort getting to know our customers’ workflows and other operations support systems. We became consultants almost as much as equipment providers, though we did have our own manufacturing facility in Gaithersburg, a few miles from our headquarters, where we made all our equipment (no outsourcing!).
To train our growing salesforce, who were scattered all over the country, and get people on the same page for messaging and direction, we held annual sales meetings, usually in February or March. At first, these were in hotels near our Rockville office but before long we were able to hold them in warmer, more hospitable places. I was heavily involved in setting the locations, agenda, messaging and presentations, and even the recreation activities and menus for these events. We had successful conferences at resorts like the Don CeSar in St. Petersburg, FL, The Buttes in Tempe, AZ, Westfields Conference Center near Dulles, VA, Lansdowne Resort also near Dulles and Chateau Elan near Atlanta, GA.
My most egregious story from the sales meetings was at the Don CeSar in maybe 1993 or 1994. We rented a vintage yacht for dinner and an evening cruise and I managed to partake of way too much at the open bar. I’m not even sure how I stumbled back to my room but I was able to wake up early the next morning, staggered out to our pre-arranged golf event, discreetly puked near the first tee, and proceeded to shoot a very good round of golf. Then we went back inside for more presentations that afternoon. I’m not proud of my behavior but at least learned the lesson never to drink quite so much at a company function. It was, however, one of my best rounds of golf at a company event.
Mark Posluszny gave me 5-year service pin in 1994
In addition to the sales meetings, we exhibited at a number of annual trade shows that I mentioned above. I became responsible for selecting the shows, our booth design, messaging, staffing, and so on. I attended most of the larger ones, meeting with our sales folks, customers, prospects and media. These were also prime opportunities to research our competition and industry trends.
Trade shows were useful up to a point, but we wanted a more focused time with our key customers and prospects, so we started our own industry conferences, FutureTest, FutureOp and high level Executive Conferences. We invited outside experts to discuss industry trends, customers to discuss their own practices, and product experts to showcase our solutions, usually capping things with some elaborate demos. I’d work for months putting together these conferences down to the last detail. We held conferences at The Innisbrook Resort near Tampa (FutureTest 1995), La Costa Resort in San Diego (1995 Executive Conference), San Antonio (1997 FutureTest?), and The Buttes in Tempe, AZ (1999 FutureOp?). These conferences were elaborate and expensive but when you have a small, targeted customer base spending big dollars on multi-year contracts, they proved effective.
I still have the complete notebook from the 1995 Executive Conference that gives a glimpse at the detail of one of these conferences. We conceived of the Executive Conference to invite high-level executives from customers and prospects to hear from some top-level industry experts. It was a prestige event that cost us a bundle but we felt it was very successful in raising visibility for our company and systems. I lobbied for La Costa as the location both because it hosted a prestigious PGA tournament each year and I remembered that Dad and Mom fondly recalled attending an Exxon Board meeting there some years before. Also, I wanted to see San Diego and La Jolla.
Note the timing of this event, November 7-8, 1995, just one month after Allie’s birth. I don’t remember the specifics of how things overlapped, but I know I must have been fully engaged in preparing for the conference right during the time of Allie’s birth and first few weeks at home. I remember feeling overwhelmed some evenings, unsure how to handle the responsibility of taking care of this little, jaundiced bundle hooked up to a UV belt. But that’s a different story for a different post.
The calendar of Hekimian events and activities marched on. As we became more deeply entrenched in the network management world, we participated in industry organizations like the TeleManagement Forum and the International Telecommunication Union (ITU). I attended conferences in Barcelona, Paris and Nice. I remember hardly having time to get out of the hotel in Barcelona but I was able to bring Barb to Paris after the conclusion of that conference in 1998. The Nice conference lasted nearly a week and included a trade show so there was more time and a little more downtime. I enjoyed free time wandering the streets and beachfront, and finding some good food.
In April, 1996, I attended a week-long training class on leadership at the Darden Executive Education facility in Charlottesville. This was like a mini-MBA program. I appreciated the investment Hekimian made to send me; few others went to expensive programs like this. I later took another class there on finance. In general, Hekimian was good about sending us to seminars and training sessions on work-related topics. Over the years, I attended a number of training classes, particularly ones put on by the American Management Association, on marketing, program management, project management, public speaking and more.
Mike Tesoriere, Des Wilson, Mark Posluszny and me
In 1997, the US Open golf championship was held at Congressional Country Club in Bethesda, a few miles from our offices. Our sales VPs, Mike Tesoriere and Des Wilson, managed to convince the rest of the executive team that we should buy a sponsor tent at the event so we could invite top-level customers. I wasn’t entirely convinced it was a good use of funds, but it wasn’t up to me. Once the decision was made, however, I was more than happy to participate. I spent five days at the event, overseeing food and access to the tent. One of the perks was a round at Congressional a few weeks before the event and again after.
I mention all of these shows, events and travels partly because they were particular milestones that help me tag activities in time, partly to give a sense of what was taking up a great deal of my time (I was often on the road several times a month, sometimes for a week or more at a time), and I guess partly to brag about some of the cool places I went. But mostly it’s to give a sense of what occupied me through these years, balanced with continuing to oversee several departments of folks turning out technical manuals, proposals, marketing material, budgets, planning calendars and more. There was a lot going on, some of it interesting, a lot of it boring (especially to Barb and folks outside my Hekimian bubble). I wasn’t doing it alone but with a team of colleagues I mostly enjoyed and respected, and I think together we accomplished quite a lot within our particular field.
Over the decade of the 1990s, Hekimian’s annual revenues grew from around $30 million to over $400 million. We were relatively big fish within a specialized pond, though our company was dwarfed by others that sold mainstream transmission and switching systems. Telecommunications was a big, rapidly expanding ecosystem of service providers, equipment manufacturers and specialists like us. Wall Street took notice and funding started building for a whole range of Competitive Local Exchange Carriers, fiber optic backbone providers and new equipment suppliers (interesting academic summary of the boom and bust and another abstract).
As Hekimian grew and the telecommunications market as a whole got hotter, Axel Johnson, Inc. became more interested in the little company it had owned since 1983. Axel Johnson was a century old family-owned Swedish multi-billion dollar conglomerate with an interesting history. The family and company at that point were headed by Antonia Ax:son Johnson who was (and is) one of the richest women in the world (see her profile in FT at home article). We had very little interaction with her until around 1996 when she came with her husband and CEO, Goran Ennerfelt. It was very much like a royal visit — everything had to be shiny and just right, but she turned out to be warm and personable. Goran started spending more time with Dr. Ginnings and our executive team behind the scenes over the coming months. There’s definitely something to be said for a privately held company — they can afford a longer view of their industries and portfolio and take time to quietly make strategic moves.
In early 1998, we were pleasantly shocked by the news that Dr. Ginnings was retiring as President of Hekimian, to be replaced by Des Wilson who had been our Sales VP. It was part of a move to dress up the company and prepare to either be sold or go public. Des rejiggered the executive team, promoting Chris Swan to VP of Sales, luring Dave Gellerman back to Hekimian after a few years elsewhere, shifting Mark Posluszny to VP of Product Management and in 1999 promoting me to VP of Marketing. It was a new generation of leadership, putting a younger, more dynamic face on a 30-year old company.
Proofs of headshots for the website 
As a newly minted member of the executive team, I was quite astonished at the range of perks that suddenly came my way. In addition to a nice bump in salary (though I’m pretty sure I was at the low end of the scale compared to the other VPs), I received a new leased car, gasoline credit card, 100% paid health insurance including dental and eyecare for the family, multiple airline clubs, a deferred income option to lower taxes, and a bump in my Axel Johnson pension plan.
Most surprising was the increase in annual bonuses. As a Director, I received a 20-30% bonus in years the company did well, which I thought was very generous. It was great to get 5-figure checks at the end of the year — it beat the frozen turkey I used to get at ARC. As a VP, the bonus plan went to 100% or more of salary which just seemed outrageous. I finally understood what one of the VPs had let slip a few years before, that they were really just working to make the bonus levels. The compensation plans were structured to retain executives and keep them from jumping ship to competitors and public companies that offered stock options. I had worked for 10 years at Hekimian and had been pretty pleased to see my salary rise from $50K to over $120K. To suddenly find myself making three or four times that didn’t seem right, but I didn’t turn away any of the perks or bonuses.
A small perk that I earned on my 10th anniversary with Hekimian in September of 1999 was a commemorative watch, engraved on the back. I wore the watch daily for a long time, until cell phones finally supplanted watches as a timepiece. It now sits honorably in my dresser drawer, wasting time. I think this photo of me with Des may have been at the 1999 Christmas Party where I got a 10-year length of service pin.
Des giving me 10-year pin
A big piece of the 1990s telecommunications boom was deploying fiber optic backbone networks throughout the US and around the world. Hekimian’s main corner of the market was testing high speed private line services the phone companies delivered to large business end users. In the latter 1990s, one of the biggest issues how to deliver similar high speed data services to homes and residential customers. The phone companies bet on Digital Subscriber Line (DSL) technology to deliver digital data over their existing copper wire plant. At Hekimian, we cooked up a systematic approach to testing DSL services that would open the door to a much larger market and tighter relationship with our phone company customers. I didn’t come up with the technical strategy, but my group and I were tasked with helping explain the big picture to our salesforce and customers.
Over 1998 – 1999 I helped produce white papers which I eventually condensed into a Strategic Plan for Hekimian. The plan (I’m still looking for a copy) was a concise 20-page overview of our market, customer base, competitive environment, our product solutions and direction, and financial outlook. It was a good piece of work that helped shop our company to prospective buyers and to Wall Street, and helped cement the VP of Marketing slot for me in 1999.
During the same period, one of the first things Des let me do once he became President in 1998 was hire a Marketing Communications Manager. We wanted to overhaul the corporate image, improve our marketing collateral and strengthen our website and online presence. I hired Bayard Brewin, who had been (and is still) an independent marcom pro. I haven’t been in touch with Bayard since 2003, but he still keeps the work he (and I) did as samples on his website, for which I am grateful and stealing without permission. Between 1998 and 200, we overhauled the corporate logo and identity system, website, brochures, trade show presence and more. It was a ton of work — Bayard did most of the design, graphics and implementation while I guided the content, direction, final edits and budgets. We made a good team and accomplished even more over the coming years with Spirent.
One of the first tasks was updating the Hekimian logo, or rather coming up with a logo. The corporate identity for years had been simply the name HEKIMIAN. Des and Mark wanted a logo with a more modern feel. We ended up working with a corporate identity consultant to whom we paid thousands of dollars. She interviewed a bunch of us, did a lot of homework and came up with three treatments, none of which we really liked. Bayard and I adapted one of them to end up with the version below. Everyone else was tired of the process and went along. I ended up rather liking it and no one else violently objected, so we took that as a win.
New corporate identity in hand, Bayard and I tackled the Hekimian website. We did one round of revisions that basically replaced the old logo and put a new skin on the existing content. In these early generations of websites, I was the main content contributor/editor and I was guilty of overstuffing each page with lots of text (a design sin of which I remain guilty). Within a year or so, Bayard convinced me to do a second overhaul which more dramatically reshaped the content, reducing the amount of text, adding more graphics and generally making the website more friendly and up-to-date.
First generation website revision 
Second generation website
We developed a new family of advertisements, Bayard handling the design and me contributing much of the content. Mark also had a hand in the development of these ads. They didn’t win any awards but at least they were recognizable as a family and were distinct from our competitors.
We did a similar overhaul of our product literature, putting together a family of brochures and flyers to help explain our complicated product lines. These were important tools for the sales force, more so than our advertisements and some of the other things we did.
In October 1998, I attended another week of executive education, this time on negotiations at Wharton in Philadelphia. This was an intensive class, covering lots of tactics and techniques of negotiation. At around the same time, we were involved in a very lengthy set of proposals and contracts with Bell Atlantic for test systems in their newly acquired New York/New England territory. I became involved in the proposal presentations and recognized some of the tactics and language the Bell Atlantic contracts people were using. Sure enough, they had been to the same class. I was able to help our sales team a little and eventually we won what became one of our largest contracts, well over $20 million.
The International Telecommunication Union put on a massive quadrennial conference in Geneva called ITU Telecom World, sort of the Olympics of the industry. It lasted nearly two weeks and attracted 200,000 attendees. In 1999, we decided to attend as part of a USA Telecom pavilion run by the Department of Commerce. The October show was so huge and we got involved so late that the only hotel rooms we could get for our six or so folks were in Annecy, France, more than an hour by bus from Geneva. Annecy turned out to be a pretty little town on a lake in the foothills of the Alps. We had a small, old hotel in the Old Town, close to lots of restaurants. The only bad thing was it had a very limited hot water supply so it was a race each morning to get a warm shower before catching our very early bus. I had more than my share of cold showers and learned to get up even earlier.
We saw very little of Geneva, but quite a lot of Annecy in the evenings. We had one young employee with us who had a French background. He helped show us around and introduced us to raclette, among other Alpine treats. We introduced him to single malt whiskey over a number of evenings in a well-stocked bar, a fair trade. On our one day off, we rented a small van and toured Mont Blanc, Chamonix and Evian on Lake Geneva, a beautiful area and a long day. I’d like to get back and explore that whole region at some point.
In November 1999 I had my first direct touch with Wall Street IPO fever. There was a company in Texas called MetaSolv that we discussed partnering with. I don’t think things got much past the discussion phase, but for whatever reason they put me on their list of invitees to purchase stock at their IPO listing price. I decided to go ahead and put in $10K at $19/share. On the first day of the IPO, shares rose to $55. Within three months, they reached $126, making my stake worth more than $50K…briefly. The company was doing reasonably well, but after February the stock price started to nosedive. I ended up selling a month later and netted around $25K — still a great payout for four months of holding a stock, but the whole experience taught me to beware of the wild gyrations in tech stocks and IPOs. It was nothing short of gambling. MetaSolv survived long enough to be bought by Oracle in 2006 at $4/share.
Armed with a new management team, refreshed corporate identity and marketing presence, and a big new market opportunity in DSL testing, the shopping of Hekimian to Wall Street and potential corporate suitors began in earnest in 1999-2000. The effort was led mainly by Des and Dave, along with some hired guns I think from Goldman Sachs. I wasn’t involved on a day-to-day basis but sometimes helped with presentations. There were many dog and pony shows for potential investors. It was an open question whether we would be sold or go public on our own.
The telecom boom was in full, irrationally exuberant swing on Wall Street. It was an ecosystem bubble where New York and Silicon Valley money teamed up to create a whole new class of telecom carriers, the CLECs, and a whole new gaggle of equipment suppliers to sell to them. In turn, the financiers sold the world on these companies as a good bet for investment.
As an example, one of our direct competitors in DSL testing was a company called Turnstone Systems. The company was formed in January 1998 by some folks we knew in the industry, and they tried recruiting some of our better engineers and sales folks (though I don’t think they got any). We watched closely as they lost money their first year but still got financing and went public in February of 2000. The company announced they would sell IPO shares for $15-17, then upped the range to $23-25 before actually debuting at $29. By the end of their first day, their shares were trading over $90. The folks we knew at the company were suddenly worth $10-30 million each, though they couldn’t cash out for some months or years. It sure didn’t seem fair to us at the time, in early 2000, that they would be multi-millionaires while we had a much larger market share and better prospects. We wanted our piece of that pie. [More on Turnstone. Note that by January 2003 they were belly up.]
By early 2000 we were getting serious interest from several companies, including Hewlett Packard (at that point, actually Agilent, the name of their instrumentation and testing spinoff) and Spirent, in acquiring Hekimian. I can’t recall the exact timing and details, but we had an executive staff meeting to review the initial offers and the option of going public. The IPO route seemed the most risky and didn’t get many votes. The Spirent offer was generous but we didn’t know much about this British company or how we fit with its other holdings. Hewlett Packard/Agilent was very well established in test equipment as well as computers, printers and other electronic products, and had one of the most famous Silicon Valley origin stories. Their offer was not as generous as Spirent’s but I and a majority of the other executives voted in their favor. We headed down the path of becoming part of Agilent.
As we went through this process, one of the recommendations from the Wall Street types was that we trim our expenses somewhat to make our financial numbers look more attractive. That translated into cutting staff by about five percent. Every department was expected to make cuts, and I was pretty much told who to cut in mine. I didn’t agree with the decision and tried to offer alternatives, but in the end I had to let go one of my long-time colleagues. It was hurtful, much more for him than me, I’m sure, but I still regret having done it. I think his getting fired fed into the guy getting a divorce. The move also hurt my relationship with his friends and colleagues that remained at the company, even though his going meant that they all stayed. It was a dark day and I still question whether we really needed to take such steps.
I can’t remember if this was before or after this next episode, but it illustrates some of the folly and conflicting signals of the time. Our sales team once again became enamored of hobnobbing with clients at the US Open, which in 2000 was to be held in June at Pebble Beach. Once again, I didn’t agree with the decision but they went ahead and spent a bundle on a third party package for a dozen tickets to the event. As the event neared, I think we were in the throes of negotiations with HP and it turned out none of our key executives could attend. Similarly, most of our key customers were leery of traveling on such an obvious boondoggle. But a couple were interested and we had the tickets, so it became necessary for someone to be there to escort them. I was glad to take the assignment and ended up spending four quite glorious days watching Tiger Woods break all sorts of records, the “pinnacle of his career.” I think I was with customers just one or two of the days. Most of the time I was on my own and had a great time.
We got down to the wire with Agilent, putting finishing touches on joint press releases and making preparations for the actual announcement which I think was scheduled for September. Every communication went through our (very expensive) Wall Street advisors and (very expensive) lawyers. It became clear to me through this effort just how much money was going into the hands of the financiers and attorneys, earning their reputations as leeches sucking on the bodies of us mild mannered corporate citizens just trying to get our jobs done.
One or two days ahead of the announcement, the brakes began to squeal. At the last minute, Agilent tried making changes in the final package. Our folks, particularly Axel Johnson, balked and suddenly the deal was off. I never knew if it was simply a negotiating tactic (similar to what was taught at Wharton) or if Agilent actually got cold feet and changed its mind. Telecom stocks and the market as a whole peaked in March 2000 and had been sliding since, though we argued we were on the cusp of several great years with DSL contracts already in the pipeline. In any event, our ship wheeled around and discussions quickly reopened with Spirent.
Things went very quickly from there, and the acquisition by Spirent was announced on November 17, 2000 (see Washington Post article, Independent article, CNN article). The transaction was worth $1.6 billion, almost half in cash, the other half in Spirent stock. The acquisition was finalized in early 2001, and made for a pretty happy holiday season in lots of Hekimian homes. With the new year, we would figure out what came next.
Article reprints from the good old days of magazines. I had a hand in all of these, though a byline in only one.
Next job: Spirent Communications
Previous job: Atlantic Research Corporation
Work page: My Brilliant Careers
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