Herbert M. Dwight

Bromberg:

I’m at Spectra-Physics with Mr. Herbert Dwight (Chairman of Spectra-Physics) who is going to be talking to us; and my name is Joan Bromberg. Why don’t we begin with the founding, coming out of Varian. What were your reasons for starting the company? What were you thinking of in terms of product lines?

Dwight:

OK. Let me give you just a bit of historical perspective on Spectra-Physics as it relates to that period of time. You spent a lot of time looking at the early history and as you know, the technologies that impinged on the laser business at that time were things like atomic clocks, frequency standards, nuclear magnetic resonance, electron paramagnetic resonance, and the like. It was in these latter areas that Varian was very much involved. Varian had acquired the sole exclusive patent rights from Felix Bloch, who had done his work at Stanford, and as a result of that early work and some close ties between people at Varian and Stanford, (such as Martin Packard, who had done his thesis under Felix Bloch), there was a very large community of interest in nuclear magnetic resonance and electron paramagnetic resonance at Varian. This resulted in Varian’s having introduced the most extensive line of NMR and EPR equipment for analytic work in the mid to late 1950’s. And so the people who wound up becoming the founding group of Spectra-Physics were all associated with that work or offshoots of that work as a result of this earlier history.

Bromberg:

What were you doing? I’d like to get a little idea of your background.

Dwight:

There were five people who ultimately came to become founders of Spectra-Physics. The initiator of the concept of founding the company was Bob Rempel with whom you’re going to have a discussion this afternoon. Bob was a PhD from Stanford (received his PhD at Stanford in or around the subject of nuclear magnetic resonance), and had worked at Varian as a graduate student and was engaged at Varian, when I came to know him, in what I think was probably the first effort to commercialize the ribidium frequency standard into an atomic clock. He was engaged for an extensive period of time in a very successful effort to bring that product to market. Bob had an entrepreneurial bent, which I think was something that he probably inherited from his father. His father was also a bit of an entrepreneur, and had been fortunate enough to invest in Varian stock while still a graduate student at Stanford. I think he had made a relatively modest investment but it had multiplied many fold and so he found himself at that time as a relatively young man in a reasonably lucrative position, and the combination of some financial resource and an entrepreneurial drive led him to think about leaving Varian and forming a company of his own. The product concept of which had not totally jelled in his mind at that time.

Bromberg:

What was your reaction to all that?

Dwight:

In my case, I had graduated from Stanford in 1953, with an undergraduate degree in electrical engineering. I had been able to go to school through the auspices of something called the Holloway Program which is — in other words, an NROTC scholarship — so I as a result of that scholarship, was obliged to spend three years in the active Navy, which I did.

Bromberg:

In a technical capacity?

Dwight:

No, it was just as a line officer in the service. That was immediately after the Korean War. I received my commission just about the same time that the Korean War was winding down, so we spent the next three years in the Western Pacific in the Post-Korean period both in Japan, in Korea, and patrolling the China Sea during a postwar period. I got out of the Navy in 1956, and went to work for Hewlett Packard as a design engineer. I spent three years at Packard and became interested in diversifying my technical and professional experience. I decided for a number of reasons that that was not going to be as likely at HP as it might be somewhere else, and wound up interviewing for a job at Varian and spent three years at Varian, initially as a design engineer, and during the last year as a sales and marketing person responsible for obtaining government contract support for research and development in the instrument division where all of the other founders wound up being employed. So that was how I came to know all the other four founders of the company, all of whom were also employed at Varian in various research capacities within the instrument division. I had a year previously been engaged in — a year before Bob Rempel approached me about the thought of starting a company — I had been engaged in an effort to get my own company off the ground in an unrelated area. And so Bob was aware of the fact that I had had similar thoughts to his. I had also served for several years on the board of directors of a local Savings and Loan association and as a result of that, obtained some business-related experience which I think Bob felt would be valuable as a founding member of the team, as well as having had a marketing-related position at Varian, had complementary experience relative to the other people who were involved in starting Spectra-Physics.) So I think that those were the things that led him to engage me in a conversation relative to starting the company.

Bromberg:

What led you to look with favor on this?

Dwight:

Well, I had a strong entrepreneurial bent as well, for reasons which I can’t really necessarily identify, but it was something — let’s say, doing something on my own was something that I’d had an interest in for at least a couple of years, and so, the thought fell on receptive ears at least. So, Bob and I, over a period of a couple of months, had a series of discussions which revolved around what, when, where we might do something on our own. We also thought about who, what people might make good additions to the founding team, and in the process of thinking that through, we approached several people, at least one of whom chose not to join us, a person who is not, at Varian, but in any event, the net result of which was having obtained commitments from three additional people who were employed at Varian at that time, and those people were Arnold Bloom, Earl Bell and Bob Rempel. Now, I think you have made arrangements to speak with all these people before you’re through. I don’t know whether you’re speaking to Earl Bell today, is he around? He’s in Arizona, I believe.

Bromberg:

I wrote to him. I haven’t heard anything yet.

Dwight:

The other founders were Bloom and Bell who had created for themselves quite a reputation as a team at Varian in the field of nuclear magnetic resonance, and what was becoming a popular field at that time, the optical pumping, so to speak, as it was becoming known in those days, and the concept of optical pumping formed the basis for the ribidium vapor frequency standard, which Bob Rempel was working on in terms of trying to commercialize that whole concept. Arnold and Earl were providing much of the theoretical and experimental research that was done in support of that project. They had earlier done a lot of the work that supported the evolution of the nuclear magnetic resonance and EPR product lines that were more mature at Varian at the time that I came on the scene. As I say, they had formed, they had gained recognition pretty much internationally as a team, in that. Arnold was a very gifted theoretician, and Earl was an extremely talented experimentalist. Earl may have graduated from high school but he didn’t have any further formal education than that, and yet he was extremely knowledgeable technically and had the ability to communicate with people like Arnold. Bloom who had this intense theoretical background and translate the theory into practice. So it was the attractiveness of that team, in a sense, that led Bob and I to approach Arnold and Earl to join us as founding members. Ken Ruddock with whom you are speaking this afternoon was a Canadian, as was Earl Bell, went to school in Toronto, University of Toronto, got his Master’s degree in electrics from MIT, and was working at Varian as an engineer. So in a sense, Ken and I were the two engineers out of the five. The other three I would put in the scientist category, if you will. Ken had done his early work with Newmont Mining Corporation as a geophysicist, as an explorational geophysicist, and had carried that interest to Varian, where he was engaged in the application of quantum electronic concepts to geophysical prospecting. He had developed a system for Texas Gulf Sulphur that resulted in one of the most significant ore body finds in Canada, and based on that reputation, had come to Varian and was working on ribidium vapor magnetometers for use in aerial prospecting. He had done some very impressive work and because of that we approached Ken as a co-founder based on his engineering expertise, being a complement to the scientific abilities.

Bromberg:

This was all going on in the early sixties?

Dwight:

All of this was going on in the late fifties. I joined Varian in ‘58 and we founded the company in September of 1961. So I joined that research group as a marketing representative in, I would guess, early 1960 and so I was a co-worker in that group for something on the order of a year, year and a half. In fact, just immediately prior to joining that group in a marketing capacity, I’d had the responsibility for doing some experimental work with a ribidium vapor magnetometer and which resulted in the first successful flight of a ribidium vapor magnetometer for anti-submarine work. We took one of these devices up on a PTB at, over at Moffett Field, and went out and looked for submarines and tried to obtain submarine signatures that ultimately resulted in the award to Texas Instruments of a series of contracts for use of similar technology in anti- submarine warfare.

Bromberg:

It sounds as if, by the time the company was founded, laser was one among many possible quantum electronic devices you were interested in.

Dwight:

Well, I will say that the thought of lasers was really — the topic of lasers was, as you suggest, maybe one of many things on the platter, but it was almost secondary to our early conceptual focus, when we sat at Varian and thought of starting a company. The — of course, the early work on lasers, well, let’s see — the state of the art, at that time, as I recall it, was that, of course, Charles Townes had published his conceptual work in 1957 or thereabouts. There was kind of a scurry of activity to produce a practical reality out of this early theoretical thesis by Townes and others, Basov and Prokhorov others, and as you know, Ted Maiman was the first to conduct a successful experiment, but there were a lot of people who were simultaneously conducting similar experiments and Maiman just turned out to be the lucky one. Some of that work was being done at Varian under the auspices of Irwin Wieder. In fact, Wieder claims I think to this time that had Varian not imposed a capital equipment moratorium by virtue of their financial straits, he would have invented the laser instead of Ted Maiman and that may or may not be the case.

Bromberg:

I didn’t realize Wieder was at Varian. I thought he was at Westinghouse.

Dwight:

Wieder came to Westinghouse to conduct experiments which he hoped would lead to a successful optical laser, and he was there for a period of one or two years. Had in his mind all the concepts which were necessary to produce a successful laser. Was down in the laboratory with flash tubes and polished ruby crystals trying to observe stimulated emission at the very time that Ted Maiman reported his results.

Bromberg:

So I ought to see Wieder.

Dwight:

Yes, you’d get a very interesting perspective on the laser business from Irwin Wieder. Wieder was within, you know, just a fraction of being the first to produce successful results. That was my sole exposure to laser technology, because I was in that group just at the time that Irv was being frustrated in his attempts to put together a successful experiment, but I also recall that Bennett, Javan and Herriott produced their first successful gas laser results in early l960, I believe.

Bromberg:

Late ‘60, early ‘61.

Dwight:

Early 1961 is what I meant to say, because Ted’s work was in late 1960, I believe.

Bromberg:

Yes, his announcement came out July of ‘60.

Dwight:

And as I recall, the first translation of that technology to any other laboratory was to RCA, and RCA had duplicated the early work of Bennett, Javan and Herriott, and had publicized some structures, some physical structures that they had put together which played in part upon this work by Bennett, Javan and Herriott, and those physical structures were circulating around the research group at Varian, and I know that Earl Bell was, close to, if he had not done any work, on trying to in turn duplicate the RCA structure at Varian, about this time that we were thinking of starting a company. But the thought of working on things like ribidium vapor frequency standards and ribidium vapor magnetometers was I think foremost in our minds as opposed to lasers at that time. And it was more around these technologies that we had intended to create the nucleus for a commercial enterprise than lasers.

Bromberg:

Of course one of the questions I’d like to ask, I might just go by one thing. That is, this article in Fortune says that you used your own money on this company. The initial was $150,000 that came from your own pocketbooks, so I won’t, unless there’s a reason, ask anything more about financing.

Dwight:

Well, let me just touch on that briefly. We put together the founding group. We began to think about how we would capitalize the company. And venture capital in those days was at its very early inception. There was some venture capital around. There was some history of venture capital financing. And therefore we took it upon ourselves to make some contacts at places like the Rockefeller Brothers and other groups that had been involved in some form of venture capital and after a series of initial discussions with one corporation, Newmont Mining Corporation, and Rockefeller Brothers, specifically Laurence Rockefeller, and a couple of other groups, we concluded that our assessment of our worth was greater than the venture capitalists’ assessment of our worth, and that we would be better advised to simply pony up the money of our own for an initial, for the initial stage of our company, and try to kind of play during that period of time on our own money, in hopes that we could prove our value and extract a higher rate of capitalization from the venture capital community at a later time. So we went through a phase where we explored other alternatives but we finally concluded that we would put up the capital ourselves. As I explained to you, Bob had the bulk of the money, and out of a gesture of total unselfishness, he volunteered to put up half of the total capital, and the rest of us agreed to put up the remaining half of the total capital, but we came up with a formula for assessment of individual value which was, that partners assigned equity to the founding partners on a basis which was not nearly as disproportionate as the contribution of capital. And as you suggest, we did raise initially $150,000, and we subsequently raised another approximately $75,000 or more from friends and founders to raise that initial capitalization up to I think somewhere around $225,000.

Bromberg:

What did you physically do? You rented a room, I understand.

Dwight:

Our initial thought was that we would use the contacts that we had developed while at Varian with people like the National Science Foundation, the National Aeronautics and Space Administration, and the Naval Research Laboratory to obtain contracts, in the area of quantum electronics and hopefully over a longer period of time translate some of this government-sponsored technology into a commercial reality of one form or another. All conceptually vague, very vague. Our primary motivation was to start a company and control our own destiny. Our product concepts were not well thought out. They were very vague, and relative to most of the companies you see starting today in today’s venture capital world, relatively ill- conceived.

Bromberg:

Did you start writing out these proposals for contracts?

Dwight:

So, as you suggest, we arranged for our orderly departure from Varian, which resulted in four of us departing simultaneously, as a result of an impassioned plea on Varian’s part for Ken Ruddock not to leave immediately, he agreed to stay, I believe, with Varian for something on the order of six months after we had started the company because he was involved in a project that they regarded as very crucial, and so he worked part time for Spectra-Physics and part time for Varian on a transitional basis. So the four of us plus a part time effort on Ken’s part set up shop down on Commercial St. in Palo Alto in the industria1 slums. In a room down there, for a period of several months, and we began to assemble apparatus and desks and the like, and we began to write proposals to both local industrial concerns to the government for support of one form or another, primarily contractual in nature. Our first contract, as I recall, came from a company called Radiation of Stanford which is now part of the Aydin Corporation for doing some consulting work. I can’t even remember exactly what the consulting work would have been.

Bromberg:

Part of Itek, did you say?

Dwight:

Aydin. Aydin Corporation now. It was called Radiation of Stanford at that time. We submitted some contracts to the Air Force. I can’t remember exactly which contracts came through initially, but we did, we were ultimately successful in getting some small contracts out of the Naval Research Laboratories. We received a contract from the Air Force for building a satellite-borne horizon sensor and about a year after the founding of the company, we were successful in obtaining a major contract, a major contract at that time being $837,000 as I recall, from the National Aeronautics and Space Administration of Greenbelt, Maryland, for a simulated space facility, a facility that was to simulate the gravitational atmosphere on the moon for use in testing some of the early space vehicles.

Bromberg:

And these other NRL contracts, Air Force contracts and so on, how much would they have been, 50 thousand?

Dwight:

Oh, they were in the 50 thousand dollar range. In fact, in those days it was relatively easy on an unsolicited proposal to go out and get a relatively nominal contract with somebody like the Naval Research Laboratory. I might add, a process which unfortunately does not exist today. But a well -known researcher with a good idea could sit down with a top representative of the Naval Research Laboratory and pretty much on word of mouth commitment get money to do work on, in promising areas.

Bromberg:

I find that absolutely fascinating. Maybe business historians understood all of this; the role of government contracts in starting new businesses is new to me.

Dwight:

So, at that time, there we were, five guys sitting around in a one room office, in a single room, that we had rented, pretty much staring at each other wondering what we were going to do next. And out of the blue, we were approached by John Atwood of the Perkin-Elmer Corporation in December of 1961, 2½ months after we were founded, to become part of the Perkin-Elmer Corporation. Perkin-Elmer had long sought to enter the nuclear magnetic resonance spectroscopy business, and had, I think, harbored a bit of jealousy toward Varian in terms of their position, and had looked for opportunities to enter that business, and the founding members of Spectra-Physics represented to them an avenue for entry into that business.

Bromberg:

Atwood had just heard of you?

Dwight:

Atwood had just read in the newspaper that this group of people had left Varian. He was familiar with the backgrounds of several of the founders, and so he just wandered in the front door one day and sat down and said, “I’d like to talk to you about the idea of you guys forming the nucleus of a NMR development team at Perkin-Elmer.” We responded by saying that we’d just left one big company and we didn’t have any great desire to go to work for another one, particularly in the light of the fact that our primary motivation for starting Spectra-Physics was one of expressing our own entrepreneurial interests and furthermore, we were suitably impressed with Varian’s patent position that we felt that Perkin-Elmer would be taking a substantial business risk in starting an effort, particularly with our services, because Varian was not too happy with the fact that five of us had marched out of Varian with what they considered to be a lot of proprietary technology, and we personally had no real interest in competing directly with Varian. We’d kind of made a pledge among ourselves that we were going to try to avoid competing directly with Varian as much as we possibly could in that we were aware of the fact that we had taken a substantial chunk out of Varian’s research capability, and we really preferred to work in areas that Varian was not interested in, as opposed to working in areas that Varian was directly concerned with. So we told John that that idea did not appeal to us very much, but on the other hand, the thought of working with a company with the very fine reputation that Perkin-Elmer had gained at that time, particularly in the field of optics and other quantum electronic related areas, had a certain amount of appeal, so as a result of that discussion, we mutually concluded that there might be some basis on which the two companies could cooperate, and become more familiar with one another. In fact, John Atwood proposed a kind of honeymoon period where if maybe we worked together on a project for a period of time, the thought of joining Perkin-Elmer would be more, would evolve as being more attractive than it was at that time. And as a result of a series of discussions, we, that were designed to try to identify some sort of project, we came upon the thought of commercializing the gas laser as a…

Bromberg:

Now, did that have to do with Perkin-Elmer’s optical expertise? What were the elements in getting to that?

Dwight:

The elements of getting to that point were, there was Perkin-Elmer with an in-place optics capability, marketing capability, manufacturing capability, and here was a nucleus, rather a group of engineers and scientists that could perform the nucleus of a development team that could translate the ideas that had been born at Bell Labs and translate that into a commercial reality. It was around that thought that we came to put together an effort with Perkin-Elmer that resulted in the introduction of the first commercial gas laser at the IEEE show in March of 1962, just 5½ months after the founding of Spectra-Physics and just three months after the first idea that was born out of John Atwood and Perkin-Elmer.

Bromberg:

What was the patent position on that? What was the proprietary position?

Dwight:

Well, Bell Laboratories had filed for all the patents that emanated from Bennett, Javan and Herriott’s work as well as subsequent work from people like Rigden, White and Lethers. But on the other hand, AT&T was viewed in very much a humanitarian light in those days. As you’re aware they were subject to a consent decree, and they were viewed as a benign behemoth.

Bromberg:

I don’t understand what you mean by subject to a consent decree.

Dwight:

Well, AT&T was a legalized monopoly, and as a result of being granted monopoly status by the federal government, they had agreed to make their technology available on reasonable terms to anybody who applied, and so we knew that the technology resident within Bell Labs would be available on reasonable licensing terms. We didn’t know what those terms would be, but we knew that it would be available. So it was typical in those days to not fear the threat of being enjoined by AT&T. We knew that whatever was ultimately done would result in a license on favorable terms. And in fact we were approached shortly thereafter by Bell Laboratories licensing people, and after a very protracted licensing negotiation, four or five years we took out a license from Bell Laboratories and have paid them a royalty ever since.

Bromberg:

And meanwhile you were manufacturing.

Dwight:

Right.

Bromberg:

Now, how did that work? You had no manufacturing capability at this point?

Dwight:

We had no manufacturing capability. We really just had a development capability. So we conceived a joint venture with Perkin-Elmer. That was a joint venture to last for a period of two years or the sale of 75 instruments, whichever occurred first, and Perkin-Elmer was to have manufacturing, marketing, and optics responsibilities and we were to have the development responsibility. And we were to share the revenues from this joint venture in the proportion of the expended effort on behalf of the joint venture. The joint venture agreement provided for all of the negatives and none of the positives. In other words, it made provision for Spectra-Physics going bankrupt and the joint venture failing and all those kinds of things, but it made no mention whatsoever of what happens if this joint venture is successful. So as the joint venture evolved, we at Spectra-Physics became increasingly frustrated with having to cope with the bureaucracy of a larger company, and we found that we could move much more rapidly in Spectra-Physics than was possible within the structure of Perkin-Elmer and that led us to assume increasing degrees of responsibility in this joint venture.

Bromberg:

Now, when you say you could move more rapidly, do you mean, do technological modifications?

Dwight:

Right. We found that we could just simply get things done. When we had an idea and we needed to reduce that to a practical reality, it could happen. It could take place much more rapidly within the environment of the small entrepreneurial enterprise than was possible within the larger company. A large company meaning that Perkin-Elmer was about 25 million dollars in total value at that time.

Bromberg:

So how was this going on, that you were devising — for example, Bell and Bloom, for example, were working out new kinds of lasers? What was going on? You know, when I ask that, I want to get a little bit of the technological progress, process.

Dwight:

The critical elements of the first gas laser were a vacuum vessel, a resonator structure, optics that were suitably coated, and some form of electrical excitation. So we put one team of people together, I think headed by Ken Ruddock, responsible for developing the power supply. We had a lot of experience in RF excitation of gasses, and so, and Earl Bell particularly had a lot of experience in RF excitations, so our first gas laser at Spectra-Physics was excited with a radio frequency power supply, meaning that there was a coil wound around the tube, and the gas inside the tube which was in an isolated vacuum vessel was excited inductively through the walls of the vessel from a power supply that was external to the vessel. And the resonator structure in this case was a heavy walled glass tube which was cut off on the ends with a highly parallel cut, and the mirrors were just simply glued onto the end of the tube, with epoxy. The tube was evacuated, filled with the right mixture of gases, and that in a sense was the first gas laser. So some of the technical issues at that point were; producing a reliable power supply, which was relatively straightforward getting optics which were suitably reflective at the wave length of interest and not sufficiently reflective t other wavelengths so that we could get selective calculation; and getting a vacuum vehicle or vessel that would sustain a discharge for an extended period of time without some form of contamination. And this was one of our major problems. The windows had to be secured onto the tube using what we call a soft seal, in other words, a plastic seal or an organic seal which could not endure high temperatures, so it was impossible for us to use what are called bake-out techniques to clean up the vacuum vessel. So we had to use things like RF discharges to scrub the inside of the vacuum vessel before it was tipped off, or was made independent from the vacuum pump, and this was probably the area of most challenging technical work that was undertaken at that time. So these were the kinds of activities that were being undertaken, initially simultaneously at Perkin-Elmer and at Spectra-Physics, but as the project moved from inception to completion, more and more and more of this activity took place at Spectra-Physics because it was just simply easier to translate ideas into reality within the environment of Spectra-Physics than it was at Perkin-Elmer.

Bromberg:

I see I’m assuming that you’re branching out of this one room at this time?

Dwight:

Yes, about six months after the company was formed, we moved over to another, a larger one room commercial building on Terra Bella Avenue in Mountain View, 738 Terra Bella, which is very close to where our laser products division is located today. We had I think 5000 square feet at that point, so we had plenty of room, and that lasted us for a couple of years.

Bromberg:

Also it sounds as if you are getting some proprietary material of your own as you begin to develop these things. Were you patenting?

Dwight:

Certainly some proprietary know-how. There were some patents during those early days having to do with refinements on the technology, but nothing particularly fundamental.

Bromberg:

There are a couple of things I’d like to ask you before we get to the place where you and Perkin-Elmer part company. One of them is to get some feeling for who was buying these lasers. Was it government labs? I assume it was mostly researchers, but was it medical people? Was it university people? What was your market?

Dwight:

Our market, for the sale of the first 200 instruments, was almost equally split among industrial laboratories, government laboratories, and educational institutions. So people like the Naval Research Laboratory, Battelle, Ohio State University was very active in propagation studies in those days and so they were interested in lasers as a source for coherent optical radiation, for propagation studies. University of California, Stanford, companies like Xerox, Bell Laboratories I’m sure was one of our first customers. Because it was relatively cumbersome to have to build the laser if from scratch, so if somebody could buy one off the shelf, so to speak, it was a very attractive alternative to having to go through the process of building one for oneself.

Bromberg:

You were also selling it or Perkin-Elmer was involved with selling it, marketing?

Dwight:

The first thing we became frustrated with at Perkin-Elmer was their manufacturing capability. We found that it took a very long period of time for things to get through the fabrication shop and through their metal bending shop and through their paint shop and so on and so forth So we began to assume more and more of the manufacturing responsibility, and by the time that the joint venture came to conclusion, we were manufacturing the entire device, with the exception of the precision optical work.

Bromberg:

I see. Who did this? Did you bring in technicians?

Dwight:

We brought in technicians. We brought in people with manufacturing experience. We did a lot of it ourselves.

Bromberg:

You must have been fairly large.

Dwight:

Well, we had 10, 15 people by that time, I would guess. Then — the product development work was almost entirely done at Spectra-Physics. The marketing and sales remained at Perkin-Elmer for the duration of the joint venture. It was just at the very final stages of the joint venture that we began to also get frustrated with the amount of effort that was being put into the marketing area, and we hired our own marketing manager, a fellow by the name of Gene Watson, who subsequently became the founder of ??? We were preparing to become more involved in the marketing, but we were still totally dependent upon Perkin-Elmer for marketing and optics fabrication and coding. In terms of value added at that point, we were splitting the revenues about 50-50 or 60-40 in favor of Spectra-Physics.

Bromberg:

And you were also going on with these government contracts at the same time?

Dwight:

At the same time we were doing government work. In fact, we continued to do government work until about 1964 or ‘65, when we concluded that it was impractical for us to sustain both government and commercial work under the same roof, and we consciously phased out of the government contract work.

Bromberg:

The government work was classified?

Dwight:

We did not have any classified, government work, nor have we to the best of my knowledge ever had any government classified work.

Bromberg:

Should I assume that the main overwhelming effort was on the lasers and the government contracts were sort of sma1ler or what kind of breakdown was going on here?

Dwight:

At the very early stages, the bulk of our effort was government, and as we worked through the Perkin-Elmer joint venture, I would guess that at the end of that period of time we were about one-quarter government contract oriented and about three-quarters commercially oriented.

Bromberg:

In the story of this early period, is there anything else we should be talking about in this part of the ???

Dwight:

— that probably brings us — of course, the conclusion of the joint venture, Perkin-Elmer prevailed upon us to continue the joint venture. We opted to discontinue the joint venture, and we struck out on our own and Perkin-Elmer and we became competitors at that point in time. And as I say, nobody had really provided for what happens if the joint venture is successful, so the product line was up for grabs, and we had greater control than they did at that point because we were manufacturing the product, we were developing the product. We had brought in some, the first vestiges of a marketing capability. So we just simply took this product line and ran as fast as we could with it, and Perkin-Elmer put together a development effort and began to develop their own competitive product line.

Bromberg:

What was the business world environment like at that point? There’s you and Perkin-Elmer. Was that the one competitor or were there lots of competitors? What did the world look like?

Dwight:

We were virtually without competition in those early days. Perkin-Elmer was a competitor, but never really became a threatening competitor, nor at that stage of the game was anybody else a threatening competitor. RCA had made a modest attempt to get into the gas laser business. There were people dabbling in the business, but nobody was really focused on it as being their primary source of livelihood as we were.

Bromberg:

TRG wasn’t?

Dwight:

TRG was much more engaged in solid state laser technology than in gas laser technology. I remember that until about 1980, we were so1ely involved in gas laser technology. It’s only been within the past two or three years that we’ve had any component of our business that was other than gas laser technology.

Bromberg:

And by this time did you have anything besides the helium neon?

Dwight:

It was all helium neon technology. We were at that time interested in different wavelengths. I might add that the first product that we introduced which was our Model 100 was an infra-red device operating at 1.15 microns and 339 microns. Not visible to the eye, visible only with a photo detector, and it was really the advent of the visible laser that allowed us to begin to grow and develop true popularity for our product. It was the fact that the world’s most common detector was capable of receiving laser light that is the eye, that really made the laser, brought the laser into the realm of practical reality. And so it was the work I believe by Rigden and White that really broke the log jam for us. And just as soon as we were aware that the visible transition had been observed, we were able to duplicate that work in a matter of days. We were in a position where it was very easy for us to convert our Model 100 into what we called the Model 110, operating at 6328, and the popularity of lasers really took a giant leap forward at that point; and we found our demand increased We found that sales were much easier to make. And we began to broaden the family of products that we produced. I believe up through the conc1uson of the Perkin-Elmer joint venture, we only had one product in our stable, and that was this Model 110 Visible laser.

Bromberg:

I see. That comes to an end about ‘63?

Dwight:

That came to an end in 1963.

Bromberg:

Then right through this, am I correct in thinking that the people making the decisions were the Committee of Five? Who was making the decisions? What was going on in management?

Dwight:

Up through 1968, Bob Rempel was the prime mover of this company. He was a very determined, very competent, very single minded individual, and he made most of the decisions. And deserves much of the credit for the early success of Spectra-Physics. He did a lot of the engineering personally. He did a lot of the decision making on product. He did a lot of the decision making in the commercial marketplace. And so Spectra-Physics owes much of its early success to his determination and drive and early decision making. I was responsible for some of the commercial aspects, building a marketing team, keeping the finances in order, and trying to maintain some degree of order out of this chaos. But Earl Bell, Arnold Bloom, and Ken Ruddock were engaged primarily in technical and scientific endeavors of a project-oriented nature.

Bromberg:

Was Watson an important actor at this point?

Dwight:

Watson became increasingly influential in the period 1963, l964. Watson began to develop substantial conflicts with Rempel in 1964 and 1965, resulting in his ultimate determination to leave and set up his own company.

Bromberg:

Then are there other actors we ought to be thinking of in this?

Dwight:

Well, in terms of the movers and shakers, those were the principal people during those early periods. John Goldsborough, with whom you will speak later, was one of our first senior scientific additions, as was Jim Hobart, who is still chairman of the board.

Bromberg:

I’m wondering how you went about hiring, what kinds of people you were looking for?

Dwight:

We rea1ized — Let’s say we carried to Spectra-Physics a lot of the heritage that was, to which we were exposed at Varian, and we realized that making stock available to people and making them feel as though they were equity participants and making them feel as though they shared equally in a sense with the founders was a very important aspect of our recruiting efforts in those days. We were able to appeal to people who would not otherwise have been attracted to a small company on these entrepreneurial grounds. For the first seven or eight years of our company’s history, everybody was a share-holder. Everybody was vitally interested in the financial outcome of the company. And so it was really one big family.

Bromberg:

When you say everybody, including the people who were doing the manufacturing?

Dwight:

From the janitor to the president. We were very much an egalitarian outfit at that point.

Bromberg:

So the janitor, the secretaries —

Dwight:

Everybody.

Bromberg:

Men and women who were just making the tubes or whatever?

Dwight:

Right. The glass blowers, the glass fabricators, the electronic technicians, the scientists, the physicists, the engineers were all in one way or another share-holders. I think some of the significant highlights thereafter were the — the most significant scientific contribution made by Spectra-Physics in those early days was the invention of the ion laser in 1964, I think it was. It was work that was done by Bell and by Bloom, first in ionized mercury and later in ionized argon, that, as a result of that early work we received the basic patent in ion laser technology, and began to work on ion lasers as the second family of lasers that formed the basis for our gas laser product lines.

Bromberg:

Well, why don’t we talk a little bit about that? I frankly think that we’re going to go into this period a lot more at another time if that’s all right with you.

Dwight:

Sure.

Bromberg:

Because I can pull out all the connections — but my suggestion is, we finish up this tape talking about the ion laser work and then get back to ... (off tape )