Oral History Transcript — Dr. Frank Levinson
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Frank Levinson; February 1, 2010
ABSTRACT: In this interview Frank Levinson discusses topics such as: family background and education; physics entrepreneurship; astronomy; fiber optics; Butler University; University of Virginia; Bell Laboratory; Ken Jacobs; optical communications; Bruce Elmblad; Ben Robelen; Raychem; Jerry Rawls; Paul Cook; Andreas Albanese; Finisar; Raynet; John Limb.
This is Joe Anderson. I’m here in Tiburon with Orv Butler and we’re interviewing Frank Levinson. Today is February 1, 2010 and this is part of the History of Physics Entrepreneurship study. Should I call you Frank? Or...
Levinson: Sure. Please.
Anderson: Okay. Frank, we’re going to start off with some questions about your background and education. Would you say that your parents were entrepreneurial kinds of people?
You know, I suppose that’s true. They were. My dad was a third-generation family business in men’s clothing, so I grew up selling clothes. And during his time with the business it grew nicely for a while. He also liked sailing and sort of liked tinkering with sailboats, and sort of working with things like that, and it was a part of a class of sailboats that became popular. So, there was that too. My mom...
Anderson: So, he branched into making sailboats?
Levinson: Yeah. Well, kind of. He always had engineering partners, I would say. But he loved it. And my mom grew up really poor but had to raise herself up by her bootstraps. So, I suppose there was a lot of that in my family, one way or another. Though no, none of them really started companies, I would say. They were inheritors of things, all of them were.
Anderson: Are there identifiable things or traits that you see in yourself that you picked up from your family?
Levinson: Oh sure. The most important part of, I would say, the entrepreneurial thing is it’s easy to get entranced by the science, but starting companies is about starting a business. It’s about making a profit. It’s about having customers. I’m sure this will come up again and again, but I always kid students when I’m talking to them I say, “Do you know what a customer is?” And they go, “Well, yeah,” I said, “Well, a customer is not someone who really likes your product. It’s not someone who tells you, ‘Well, I’d like to do some joint development. I’d like to, I’d like to have you give me some free samples.’ A customer’s very simple. It’s someone who sends you an order, who you send the product to, and then he sends a check.” [Laughter] And if they don’t have those stats, they’re not a customer. So, I love customers and that’s just, that’s part of the deal.
Anderson: You have a Ph.D. in astronomy from the University of Virginia, correct?
Anderson: Would you describe yourself as more a business type or an academic type?
Levinson: Well, I suppose today it’s a little bit of both. When I was getting my Ph.D., when I was in the time I was an academic in some ways. And I hoped — I guess I hoped at the time I’d go on and be an astronomer. I didn’t. From day one I didn’t even do a postdoc really. I went right into fiber optics, which is where I made most of my contribution.
Anderson: When did you get your doctorate?
Levinson: Nineteen eighty. August 1980.
Anderson: Tell us a little about your educational background before that.
Levinson: Well, I went to three colleges as an undergraduate and each time there were just different things going on. I went to college where my family had gone, called Principia in Illinois, on the Mississippi. And then, after a year I went out to Harvey Mudd, which was a very good science and engineering school, and took physics. There my roommates were, one of them was, his dad had founded Tektronix and he sort of got me into programming. He actually, I think, flunked out of school or left school, but at the same time while he was there missing classes he wrote a word processor for the IBM 370’s Time Share Option and made his first million. [Laughter] So it was like, no problem for him. And he taught me a little bit of it. So I went back, and my family’s business was still paying people out of envelopes with cash, so I went back and programmed, I wrote a full accounting system at age twenty, in a little PDP-8e, I don’t know if you know computers and all, but this thing had 8k of memory, 4k of it was the whole operating system and runtime system, and 4k of it was the whole, was all the software I wrote plus all the data structures, and it had a 1mb cartridge drive, but we could run payrolls and we could run all sorts of things — accounts payable and receivable, and P&L. And so I wrote it all in a language like COBOL. And so, I learned, at the time I learned accounting but I also was just loving software. And then I left, when I graduated. . .
Anderson: Well, let me. . .
Levinson: So, I went back to my family’s hometown in Indianapolis and graduated from Butler. Because I wrote, I thought, “Well, I’ll get this whole thing done in a summer.” And I left at the end of the summer, and right away they had trouble, I guess. [Laughter] Of course, I didn’t do any testing. [Laugh]
Anderson: Of course.
Levinson: Yeah. We were naive. Well we did some testing but it was not enough. And so, six, or no, a few months later I came back and then finished there.
Was Harvey Mudd a pretty entrepreneurial sort of place? Were there lots of people like your roommate who were either interested in...
Levinson:It was a mix. There were crazy guys doing different things there. It was a, yeah, it was. You know, looking back on it I especially think of it that way.
Anderson: And what about the school itself? Did they have, you know some schools today have programs to help students?
Levinson: Nothing. Nothing like that.
Anderson: So there was no institutional encouragement of it?
Levinson: No. But guys would go get two or three sheets of ¾” or ½” plywood and then they built bunk bed king-sized waterbeds.
Anderson: Right. [Laugh]
Levinson: No design. Just, [Laugh] just, they’d just go do it.
Anderson: I did that as well.
Levinson: Yeah. Okay. So it’s — but there were just, there were lots of just creativity just pouring out. So, it was that kind of time.
Anderson: Right. Then how did you end up in astronomy?
Levinson: Well, I took my first course in astronomy at Pomona, which was part of the five schools of Claremont. And, the teacher said, “You can take pictures with these telescopes,” so I was just like, “Oh yeah. I want to do that.” I went and bought some beat-up camera and bought the little, the things that plugged it in, and learned that. Then when I went back to Butler it turns out my dad had received his masters in mathematics from Butler, because he was a teacher, but then he went into the family business full-time and stopped teaching. But, while he was there they had put up a telescope and it was a one-meter telescope sitting in the middle of downtown Indianapolis, the totally wrong place obviously. No one had ever used the telescope for much of anything. And so I said, “Well, can I have the keys and, I’ll take some pictures?” And so I did and I, I modified the drive of it a little bit so I could do tracking better. And I brought up the darkroom that had never been used, and it was still the time of film as opposed to digital cameras. Right? This was early ‘70s. So yeah it was just, so I got to play with that thing for 18 months. It was just, it was my telescope. [Laugh] You know, as an amateur you could probably afford a six-inch telescope but I had a one-meter. [Laugh] So, it was very nice and a lot of fun. And so, yeah, it was that, and from there I went to UVA.
Anderson: And what was your dissertation?
Levinson: It was on the structure of spiral galaxies. You look at spiral galaxies; they look like they have this really strong spiral pattern of all their mass, but the mass is actually pretty uniformly distributed like a Frisbee. It’s a disk with sort of a little more mass in the middle, sort of a middle ball. And imprinted on that is a very gentle spiral pattern, a sort of five percent mass distribution enhancement. But, that small enhancement’s enough to whip the gas into a frenzy and it shocks. It goes through a spiral shockwave and when it does the gas that’s flowing compresses and it pops out stars. And it pops it across a mass distribution spectrum and — it’s been thirty years since I’ve given this talk. [Laughter]
Anderson: It’s still interesting. Okay.
Levinson: Yeah. Well, so you make little stars and big stars, and everything in between, and the sun is sort of in between, and the really big stars burn really bright and they die really fast. So, a star like the sun might live five billion years and the obit time around our galaxy is a quarter of a billion years so that, so we’ll go twenty laps or forty laps. Maybe it’s ten billion years for our stars, our star. But, really big stars might live a million years. So, they live and die in the same spot. So, what happens is they flash on and what they, what you end up doing is creating — and they’re the brightest stars, the biggest stars pour out many times more light than the sun does, per unit mass, because they burn out quick. And so what you end up creating is a light enhancement that’s in a spiral pattern. So, the stars crunch into existence, burn bright, die off, and my advisor’s thesis had talked about things like this, but my thesis talked about it too and it was, it ended up to be both a mixture of observation and computational. So we — it had always been done analytically and we did a numerical model the first time.
Anderson: I see.
Levinson: And it made it look a little more natural. But his, my advisor’s paper was a perfect spiral. My thing had jagged edges. [Laughter] It was like…
Anderson: Now, you graduated when, again?
Levinson: Nineteen eighty.
Anderson: Eighty? Okay. And then what happened?
Levinson: Well that was an interesting time. In February of that year, people weren’t sure my thesis was right. This is my version of the story. There were some radio observations and I was, and my observations didn’t agree with a Caltech professor, and the reason was we just used a bigger telescope and it made things clearer. But, it wasn’t clear at the time and so I went to apply for jobs and I couldn’t get a teaching job even at Toledo State as just a lecturer.
Because of this disagreement? Or because of the...
Levinson: Yeah. Yeah. Nobody was recommending me. [Laugh]
Levinson: Without that thesis advisor helping you you’re doomed. [Laugh]
Levinson: So, and it wasn’t — we’re still friends and I still think he’s a wonderful guy. But anyway by May it was okay and a professor that I’d had as, my first year of graduate school had left UVA and gone to Bell Labs and was doing things there, and he came walking back through the department, because he did every once in a while, and he — this is my version of it — someone grabbed him and said, “Oh, you’ve got to help Frank find a job,” and he says, “Okay.”
Anderson: And who was this person?
Levinson: It was Ken Jacobs. He wrote a textbook and stuff. Anyway, I went and interviewed at Bell Labs and I interviewed in three or four different locations, three different locations, in Allentown, and New Jersey two places, and I interviewed in Switching Systems and Software for Integrated Circuit Design, and Integrated Circuit Process Development, and Fiber Optics. And, I always joke about it, I think somebody asked, “Well, do you know how to spell fiber optics?” [Laugh] And, I said “I think it starts with an F.” They go, “Okay, you can have a job,” because at the time there weren’t any degrees in optical communications. It wasn’t like one of these things that everybody was deep in. It was new, the first cities had been converted over from coax [cable] between central offices and wires into fiber optics, and there was no turning back. So I just ended up there and it was a great place.
Do you remember right at the beginning, were you disappointed that you didn’t have an academic appointment, or — what was your feeling about going...
Levinson: I always liked, I always liked solving problems. So to me it was like, there’s this place that had more problems than I could shake a stick at. It just seemed like a good place. [Laughter]
Anderson: So was there any connection between what you had been doing as a student and fiber optics?
Levinson: UVA had an interesting philosophy in their Ph.D. program. They felt like that from their program you should be able to go and on the back of an envelope during the talk you should be able to tell whether the guy giving the talk was telling the truth.
So for example, for our qualifying exams they just sent you into a room with a pencil. There’s white paper, and you were supposed to find answers, and they’ve gave you problems, and they wanted you to come out not just with written approximate answers but numbers. So I knew several hundred physical constants, because they just thought that was just part of the deal. You knew, not just the speed of light and whatever. So, they’d ask you questions like, “Okay, a meteor’s going to slam into the earth. It’s this size. And how much energy is it going to deposit? And if it was all converted into a nuclear weapon how much fission would have to occur? And if it was going to raise the surface of the water on the Earth by, how much would it do it?” And you were supposed to say, “Oh, it’s six feet,” or whatever, [Laugh] “because here’s the numbers.” So, they expected you to — and I thought that was, that always served me well. It was, “Okay, I should know enough physics to be able to sort of as I listen to people assemble that what I’m learning in real-time in the right ways in my head.” And, I always thought that was great. And Bell Labs was a wonderful place, I mean, come on.
Anderson: We want to focus mostly on your current businesses, but tell me a little about your early career and how you got to where you are now. So you were at Bell Labs? Which location were you?
Levinson: I was in Allentown. Which was their first transistor line. And I was in a big Western Electric facility, but it was Bell Labs, and in Fiber Optics it was in some ways for me it probably was the perfect spot. There were thousands of people at Bell Labs at the time that did fibers, and lasers, laser chips, photo diodes and all those things, and there were thousands of people that did systems, big switching systems and transmission systems, and there were a hundred guys in Allentown that turned laser chips into transmitters, photodiodes into receivers, and my job was to mix, was to do passive things that manipulated light in the fiber. So if you had light in one fiber and wanted to split it and put it into two, okay. Or if you had, if you wanted to put multiple wavelengths on the same fiber, or things like that. Today that’s very popular and very important in the field. But, at the time there was nobody doing it. Some of the things I did helped, they were part of the very first systems that ended up doing things like that, and then people forgot it for a decade or more, and then they came back into fashion. But we got to — so I got to know all these areas of fiber optics, because we were, if you think of it as an hourglass, we were sitting right at that pinch point. Everything, both sides had to talk to us. And, it wasn’t that we were that important, and it was a much harder research problem to make the laser, but if you were focused on the laser that’s all you saw, day after day, after day, was how difficult those were to make. But, to us it was…We were privileged to see the whole picture.
Anderson: How long were you at Allentown?
Levinson: I was there three years, three and a half years, and then I went over to Murray Hill with the split up of the Bell System for a little bit to what became Bellcore. And then I started a company. Got fired.
Anderson: Okay. [Laughter] You started a company and got fired?
Levinson: Yeah. We can talk about — take your time. [Laughter] There’s a bunch of fun stories in this thing.
Anderson: Right. [Laughter] So you went to Murray Hill?
Levinson: Went to Murray Hill at the start of the other.
Anderson: That would have been ‘84?
Levinson: Well, right at the end of ‘83, the Bell System was breaking up. So I’d been there almost four years. And, in fact on December 31, 1983 I filed four patents. And the reason was, they weren’t sure who was going to own the stuff, and anything that was filed with a 1983 date was going to be jointly owned. So, they pounded on all of us that had been very creative or productive in the patent area and stuff to “File the stuff.” [Laugh] I think several of those I think still issue. But, so it was a very interesting time. And honestly, I always felt my time at Bell Labs is — somebody just said walk, I walked through this door and I walked into an orchard with all of, with tons of giant apples that didn’t require any ladders. You just ran around and picked them. It was easy. It was
Anderson: When you were at Allentown were you in contact with people at Murray Hill or the other labs? Or…
Anderson: So there was integration of people?
Levinson: Yeah. Murray Hill had guys that did laser chips, for example, and they had a lot of them, but if you want to turn a laser into a transmitter you came to Allentown.
Levinson: Yeah, so I did get to know all those places pretty well in a very short time, a very short time.
Anderson: So what happened then?
Levinson: Well, I was talking with some folks that, some older guys – now that I’m old I can say that — [Laughter] that wanted to start a company, or they, and they called me up and said, “We want to start this company and we’ve seen some things you’re doing and we think you’d really be a big help.” So, I talked to them and we had some meetings, and this fellow, and then they found a fellow that had started Prime Computer, and he started his career, had his big break at AMP, the connector company in those days. And, he’d built the connectors for the IBM 360, or he’d sold IBM the connectors. More importantly, he was a sales guy. And he was trying to be their venture capitalist. And, we talked for a while and then eventually we had dinner, and all of us, and I, in the middle of dinner I just thought, “I’m uncomfortable. I don’t want to, these are nice guys but I don’t want to do this. I don’t want to do this with them.” I don’t think it was, “I don’t want to do business,” I just, I was uncomfortable. Honestly, at the time I’m sure my thought was, “They’re too old.” It’s just, “I don’t want to do that.” [Laugh] And, so I told them, I said, “I think you guys can be really successful but I just, I don’t want to make a change right now. I’m happy where I am. I’ve got a little, I’ve got a young family. They’re just little kids,” and blah, blah, blah. So, and I got up and went to the bathroom, because I just thought, “I’ll give them a chance to talk while I’m gone.” And so, I’m standing in the urinal — this is guys we can all say this right — [Laughter] and in walks this guy, who looks somewhat like you, and he stands in the next urinal, the venture capitalist, and he goes, and he looks over and he says, “So, what do you want to do?” [Laughter] It’s like, “What?” His thing was, “Well, we’ll start a company with you. We don’t care about them.” [Laughter] So, we did.
Anderson: Who was this guy?
Levinson: His name was Bruce Elmblad.
Anderson: How do you spell that?
Levinson: E-L-M-B-L-A-D. I think he’s still living. And, I still have fond memories of him. Anyway, so we started off this company to go conquer the world in fiber optics.
Anderson: What year was that?
Levinson: Eighty-four, mid ‘84.
Anderson: And you were staying at Bell Labs and doing this or had you left Bell?
Levinson: No, once we got it started I quit, like a good soldier, and started it up. They were a little upset because they had moved me and everything. I lived in this really — this figures into the story in a minute — we moved from Allentown and sort of a hundred-year-old house into a house built in 1760 near Whippany, near Whippany Labs, in a town called Morristown, and it was just down the street from the National Park there where George Washington spent that really hard winter, this famous part of the Revolutionary War. He was in the house. Not lived there but he’d clearly been in this house. One of his majors that led some of the campaigns, it was his house. So, it was a really old house, and nice house. Had mice. Our cat caught the mice. [Laugh] Anyway we, I wrote this business plan as I thought we were supposed to do, and I think I still have it. Anyway, it had all these pages, and forecasts, and I had a little KayPro that could do the spreadsheets and all that stuff. So, we started the company and AMP invested, and Bruce Elmblad invested, and another guy named Ben Robelen, his friend, who was a fine…
Levinson: Robelen. Uh huh.
Anderson: Like the bridge? R-O-B?
Levinson: R-O-B-E-L-E-N, I think. Yeah. And, a financial guy. And I had met this older fellow, who was a very nice man, who was a financial guy, and he had sort of helped me. His name was Gary — I forget now. Anyway, I was young and aggressive, and foolish, and so we got the thing started and money came in. I raised equivalent of, no, a total of $2.75 million, but I gave away thirty-five percent of the company. It was an outrageous deal for 1984, let’s say. And, there was a million in equity but a million seventy-five, $1.75 million of it was in contracts.
Uhm-hmm. When you say it was an “outrageous deal,” you mean that it was a lot of money, or that...
Levinson: It was a lot of money and it was, they should have probably had more equity too. But none of us knew what we were doing, [Laughter] And anyway, over time Gary was very loyal to me and we hired guys — I ended up buying or renting a building in, near Clifton and Passaic, in Lincoln Park, just off the, at the end of the GW Bridge, if you know New Jersey?
Levinson: And, I was commuting. It was forty-five minutes. And so, I bought a house over there and it was on this street where this builder couldn’t sell any homes and he saw this young family, Ph.D. starting this company, and so he cut us a really good deal. And, on the hood of his car we designed this house and he went and built it. It was a wonderful house. Great builder. Anyway, so then I had this [very] short commute, and we were, we did this thing. And, at the time I really wasn’t as focused on customers. I was like, “Okay, I know what to build, and we’re going to go build that stuff, and then we’ll sell it.” And so, that’s what we did, which was not what you should do. [Laugh] And, Gary was a, he smoked, and he called some of the women that worked for us “honey,” but he was never coming onto them. He was just a grandfather type, but everybody didn’t like him. So eventually I just said, “Gary, I like you but nobody likes you and this isn’t working. You’ve got to go.” And, the Board was supportive of it too. They said, “We think this is the right thing.” So, they hired a new guy, with all this together, and it was a new CFO, and they helped me pick him, because I was no good at picking stuff, and he had worked at Otis Elevator. Anyway, it turned out he was dishonest, but he was really good at it so he made me look dishonest. And anyway, so the head of AMP, the CEO and chairman of the Board of AMP flew over on January 31 on one of their private jets and landed on a snowy field in Morristown, New Jersey, and fired me. [Laugh] I said, “This isn’t happening.”
Anderson: January 31 of when?
Anderson: Eighty-five? Yeah.
Levinson: So, six or eight months into the thing.
Levinson: Very short.
Levinson: And. . .
Anderson: So, what was the name of the company?
Levinson: Netek. N-E-T-E-K. It [stood for] Network Technology.
Anderson: Okay. And what were you, what was the product? What were you developing?
Levinson: Fiber optic transceivers for data communications. I started a company that’s the largest fiber optic transceiver and data communications company in the world today. So, it’s – so, the ideas were there probably, [Laughter] but I had no idea how to get them going. Anyway, so I always told — my wife at the time was very supportive. She was, “Oh, these guys are terrible.” And, I said, “Well, they fired me for the wrong reasons, but I should have been fired. I was a bad CEO.” And, I still believe that. I think I had a lot to learn.
Anderson: So, “bad” in what way?
Levinson: Well, I wasn’t customer-centric. I thought I was but I wasn’t. I thought I knew what the world needed as opposed to listening and asking what they needed. And so, anyway, so from there I was fired on January 31. It was one of those traumatic moments you remember.
Anderson: Uhm-hmm. I’m sure. Yeah.
Levinson: And, [Laugh] so I went out, I was there — first of all, we argued about it legally for a while and thought about it, and eventually we settled by the end of March. And, on the day we settled, so I got contacted by some guys in California that said, “Hey, a headhunter said, ‘Why don’t you come out here and work for a company called Raychem,’” which I did. Very customer-centric company.
Levinson: R-A-Y-C-H-E-M. The founder was still there, named Paul Cook, and my eventual partner at Finisar, Jerry Rawls was the first, was my boss, but he was the guy that hired me. And, great company. Just a great company. And…
Anderson: Having gotten fired for what looked like financial mismanagement was there any stigma involved in that?
Levinson: I was really worried about it. On the night before I started at Raychem — first of all I was hired at the same salary I had before. The same — so, no loss in salary. Nobody cared that I had screwed up this business. And, I hear it’s more common anyway. But, the night before I started work they called me up, the AMP guys called me up and they said, “Look, kiddo, did you authorize, Arnoff Simmons to,” that was his name, the CFO guy, “to pay himself a bonus of a year’s salary if you, if we fired him?” And I said, “I don’t have the authorization to do that. Why would I do that?” And he said, “Well, we have this letter, but it doesn’t look like your signature but it’s your name. It looks like his writing.” [Laughter] So, I was vindicated. And, they said, “Look, you’re the most honest guy we ever met.” You know, they all felt bad. They said, “If you ever need a recommendation, at least in terms of honesty, we’re in.” And so it all worked out, in some ways. So, it was interesting. So, I started at Raychem and six months after, and…
Anderson: What was your job there at the beginning?
Levinson: They had a military fiber optic; they had a military communications division, Interconnect, wiring and all sorts of things. They made wires. They made fibers. They did cables. They did connectors. Things like that. Not electronics. And so, my job was to come in there and help them on the fiber optic side. Their fiber optic guru, the previous guy was an older guy and was retiring, a really good guy, and super good guy. And, as a start they took me around all these places and introduced me to their customers, and so I got the idea of the company. One of the myths of that company, they, Raychem, they make shrink tubing and they make it for all sorts of stuff; for example the Alaska pipeline was being built and big sections of pipe had to be welded together. And, at the weld joints they were rusting, because all the protection would come off as you welded the thing, right?
Anderson: Right. Sure.
Levinson: So, the Raychem salesman was up in Alaska talking to the pipeline guys and they’d say, “What’s your biggest problem?,” standard Raychem approach on this thing, and the guy shows them these rusts. And, he says, “I think we can help you.” And, he got on a plane, he called, as he was driving down to the airport he called Paul Cook. He says, “Listen, here’s our opportunity,” Paul and he were brainstorming about it. He flew down. By Saturday morning they met in his, in the CEO’s office of Raychem, which was a big company at the time, and he, they invented something that was a shrink tube but it had things like this on it, so it’s one big strip, and on the inside it was gooey stuff that as you heated it up not only the tube shrank and tightened, but this stuff would soften and seal like a goo. And so, you’d weld the joint up, sling this thing around, tie it on, blow it with a blow torch, shrink it up, [clap] and boom, the pipe would stop rusting. And, they sold about $150 million worth of stuff within the next six or twelve months and everybody paid off their houses. [Laughter] Okay? This is the way the story goes. But, the key moral of the story really is, it was customer driven. Right? I mean that’s, and that’s the thing that comes through from that experience with me. So, so anyway Raychem, I worked in this division only for six months. And, they had this group at Raychem at the time that was doing fiber optics and doing something crazy. They were bending fiber and the light would come off the bend and they were trying to inject light into the bend, so we wouldn’t have to cut the fiber and polish it or put in connectors. They would just shoot light in and out of bends was their big idea, and they had some guys who were working on this thing and they went and showed it to Bell South and Bell South said, “Ah, that’s really interesting. This could really be a way to get fiber to the home more cheaply,” and so on. This is 1985 still. Because, I started on April 15. So, by September 15 or October 15 this was happening. And, lo and behold, so Bell South, this was early in the Bell System breakup, Bell South turns to Bellcore and says, “We need someone, we need an expert to go tell us if this is crazy, because they want us to put in some money and we’d really like to put in some money.” And so, they sent my boss at Bellcore.
Anderson: Ah. [Laugh]
Levinson: You can see how life evolves?
Anderson: Right. Exactly.
Levinson: So, the head of Raychem, who was Paul Cook, there’s a wonderful W.C. Fields scene in a movie where he’s playing poker with these sort of older ladies. They’re all sitting around a table like this and they titter, “Oh,” one of them goes, “Oh, Mr. Fields, is this a game of chance?” and he’s dealing. And, he says, “No. Not the way I’m playing it.” [Laughter] So, Paul Cook, in all his wisdom, goes, “Well, I don’t care where Frank Levinson is, we need him in this room to help complete the sale with his old buddy.” So, Andreas Albanese comes in, who I had worked for before…
Anderson: Andreas Albanese?
Anderson: Yeah. You’re going to have to spell that one.
Anderson: Okay. Good.
Levinson: And, he’s over at Berkeley now. Anyway, he comes in and he sees me sitting there and it’s like, “Okay. Old home week.” And so, from Raychem’s point of view the report to Bell South is done, and it actually works out they get $25 million, and, which is a big deal, and because this little group that was doing this with like five or six people. So, they turn into this big company and it’s a separate company but it’s still owned by the Raychem guys, and they give out stock options, and blah, blah, blah, and I stayed there two or three years.
Okay, now you were still with Raychem or you went on to...
Levinson: No, I went to Raynet.
Anderson: Okay. Raynet?
Levinson: So, they formed this new company called Raynet. And, at the start of the thing they had this, that we all went to dinner, like twenty of us, and the CEO, I happened to sit next to the CEO of the big company Raychem, and he started off saying how great this was and then they went around the table this way and everyone’s like how great it is, and they got to me and they all looked at me and I go, “This looks hard.” [Laughter] And, it was the largest; it was the biggest startup failure in the history of Silicon Valley.
Levinson: One of the biggest. Oh yes. Nearly a billion dollars went down the drain.
Anderson: What happened?
Levinson: And it nearly killed, it did kill Raychem. They got bought out by Tyco because it just was, they just couldn’t pull it off. The same week they got bought by Tyco my company went public, and at a higher market cap.
Anderson: That Raynet went public?
Levinson: No, Finisar went public.
Okay. So, you’re going to have to get from... [Laugh]
Levinson: So, Finisar’s the company I ended up starting.
Anderson: Right. Okay.
Levinson: I was with Raynet for two or three years, but they went on after I was there.
Anderson: Okay. And Raynet was trying to develop technology to allow light to bend in fiber optics, right?
Levinson: Come out through bends, yeah.
Anderson: Yeah. Right.
Levinson: And so on.
Anderson: And what happened to that?
Levinson: It was all targeted to fiber to the home, and that failed. The venture failed and it really ended up sucking out all the life out of Raychem. They put a lot of money into it and even though they had some customer money and more customer money came they still put a lot of money of their own into it.
Anderson: Okay. So at that dinner what you were saying was technically this looked hard, right?
Levinson: It looked hard.
Levinson: And it was. Anyway, in February of ‘88 I was sort of done with the Raynet thing. I was not very popular with some of the people.
Anderson: What was your job? What had been your job at Raynet?
Levinson: Well I was hired in, everybody that was hired in but me at that moment of starting this new company out of Raychem became VPs, and like I say I worked my way to the bottom of things and when I quit I carried my own stuff to my car. [Laughter] So, but they, but I kept them as a customer. So, when I left they were my first customer, and they did consulting, I did consulting with them.
Anderson: Right. For Raynet not Raychem?
Levinson: For Raynet. Uhm-hmm.
Anderson: Yeah. Okay. Is Raynet still in operation?
Levinson: No. No. No. It died. And Raychem is a part of Tyco now.
Levinson: And, my second customer was Bellcore. I went back to my previous job. And then we got other customers. And, but we were profitable from day one.
Anderson: So, talk about Finisar. How did they get started? What was your idea behind it? And, who were your…
Levinson: Well, my idea was to stop working at Raynet. [Laughter]
Levinson: It wasn’t, I had no business plan. I just was tired of doing what I was doing, but I wanted to start a company, and I thought…
Anderson: Talk a little about why. Why did you want to start a company?
Levinson: I just felt like it was the right thing. I felt like it was someplace I could, you know, get along better if I could create the environment that I wanted to be in. You know, I was always pretty creative. I mean, probably, Raynet, in the first five or six years and seven years, even essentially after I left, I still had almost fifty percent of all the patents down there, and there were a lot. So, it was a very productive time, even though it was three years. Very productive. And, in the end I just didn’t, I mean I just wasn’t liked. I mean, it was difficult. I was — so, I went…
Anderson: When you say you weren’t liked?
Levinson: I was liked by the president and some guys high up. I was not liked by guys at my own level.
Anderson: I see. Because of what?
Levinson: Well, just, things just didn’t work. And, I would, I’d be right. [Laughter] I mean, I don’t know. I don’t know how to say it. I think I’ve learned more social things over the years. I mean in one crazy story — I’ll tell you another story.
Anderson: Okay. Good.
Levinson: This is going to be a series of stories.
Levinson: I left Bell Labs to go to Bellcore, as you know. I didn’t just leave. I was almost chased out. [Laugh]
Anderson: Uhm-hmm. Okay.
Levinson: I, when they knew the Bell System was sort of being broken apart Bell Labs started forming these Tiger Teams to go out and do things. I was on one that was going to try to go get business from IBM. And so, when they formed it up, and I was really productive there too, early on, when I moved into this group management a couple levels up said to me, “Look, we want you to go in there and we want you to really help and make a difference, because you can start things.” And, my boss was out of town a lot, the group leader. Because, there was groups and then there was department head, and then lab, and so on. So, they had us all write monthly reports and after the first month in this thing I wrote and said, “Look, you’re never here and they, you know, I was told I was really supposed to help and get this thing organized but I don’t know how to do it, and these guys are not being productive, and I need some authority.” [Laugh] I mean, I’m just this kid. So I turned in my monthly report and the group manager didn’t read it. He just passed it up to the department head, and the department head didn’t read it. He passed it up — this is now twenty-five guys. He passed it up to the lab director, who also didn’t read it. The lab director gave all 120 reports to his secretary and said, “Copy them all on two sides of the paper and two per side and hand out all of it to everybody in the lab.” [Laugh] And so, my report, which was scathing [Laugh] was published. And so I was crucified by the guys that I worked with. So somebody from Murray Hill came over that knew nothing about all this stuff and said, he was just, and he was a very famous guy, John Limb, who ended up at…
Anderson: John who?
Levinson: Limb. L-I-M-B. He ended up down in Georgia Tech. Smart guy. Anyway he came over and he was talking about things and I made some couplers and some devices for him that enabled a network that he wanted to build and they were patented and stuff too. And anyway, at the end of it all he, I said, “John, why are you here?” and he says, “You’ve just said the magic words. I can now invite you to join the, to Bellcore.” [Laughter] He says, “But if you don’t say those words I can’t solicit it.” [Laughter]
Levinson: So, I said, “Okay, I’m in.” [Laughter] I went over to Bellcore. So anyway, but so when I started Finisar, my company, the name was chosen because I had worked at a bunch of big companies and never finished anything, and I wanted to finish stuff. And so, that was sort of my declaration. The guy I had worked with at Raychem, before going to Raynet, the spinoff, was a fellow named Jerry Rawls, who’s still the CEO and chairman of the company we started together. I contacted him and said, “Look, I’m going to start this company and if you want to come I’d love to have you.” And, in the end he did end up coming after, he sort of hung out with for a year or two and then over time he sort of merged in.
Anderson: Okay. So, Finisar started again when?
Levinson: February of ‘88.
Anderson: Okay. And how did you get started? Where did you get money? Who were you working with?
Levinson: That’s one of those good questions. We, I didn’t go get money. I had a customer. I had a little money saved up. So, I brought in an old couch and I bought a copier, and I had a computer, and I rented 1,400 square feet at $0.70/ft. and just started off. So, our expenses were, I don’t know, $1,000 a month. I didn’t pay myself for the first almost year. There were three times, for more than six months, in the founding of Finisar that we didn’t pay ourselves.
Anderson: How many people were with you?
Levinson: One. One.
Anderson: Oh, just you?
Levinson: Yeah, one.
Levinson: And, I had got some guys to do some contracting with me and wherever I got stuck, so there was a sort of a machine shop in the building and I got one of those guys, both those guys, to help out. And, there was an electrical technician in the back that could do soldering. A kid that had dropped out of college after one semester. He became our first employee. Still an employee today.
Levinson: I went to his wedding, both times. [Laughter] And, we just got started and our revenue the first month was $6,000, for the first year it was $350,000.
Anderson: Where did that come from?
Levinson: Customers. Raychem. Raynet.
Anderson: You said your first customer was Raynet.
Levinson: And Bellcore. The second customer was Bellcore.
Anderson: Okay. What were you selling to Raynet and Bellcore?
Levinson: Well, this is nerdy fiber optic stuff, but when I left they had built the early systems using multi-mode fiber, which is a fiber with a light that’s carried in a bigger core. And then they wanted to go to single-mode fiber, and bending the light out of single-mode fiber is both easier and harder. And so, they said, “Would you help us build some single-mode couplers?” I said, “Okay. We can do that.” And, we did, and they worked really nice.
Anderson: Now, would you say this was more science or more technology? I mean, where does this land?
Levinson: It’s both. It was more technology.
So, we did things for them, built little test systems and, at the time we needed equipment for those projects. We would, they would pay for us to rent the equipment, because they didn’t want to give us any of theirs. Some of the most expensive stuff I would rent to own. So in ten months you can own it. And so, I just said, “We’ll take the whole, we’ll take it rent-to-own, as opposed to just rent.” And, the contracts lasted long enough so we ended up owning, we ended up with probably between half a million dollars and a million dollars of equipment over the first few years that our customers bought for us, basically. We were profitable. And so, but not...
Anderson: So you made $350,000 in the first year, I think you said?
Levinson: In revenue.
Anderson: In revenue, right. And, how much…
Levinson: The problem with any business is you’re, if you’re profitable it’s a statement of existence but it’s not meant that you’re cash-flow positive. I mean, there are things, so we were always profitable but we were always behind in cash for a number of years.
Anderson: Now, when did you hire your second employee and who was that?
Levinson: So, the first employee was hired in, so we started the company in February. The first, we paid the first employee…
Anderson: Well, the first employee was yourself, right? You were it?
Levinson: No. No. No. It was Chris Edwards.
Anderson: Oh, okay.
Levinson: I couldn’t pay me. [Laughter] We weren’t that rich.
Anderson: Oh, I see.
Levinson: So, no, Chris has always liked to think he, has always enjoyed saying he was number one, first paycheck. And, he was. So we hired him full-time in August of ‘88.
Anderson: Okay. And, what’s his background. What did he do?
Levinson: He dropped out of high school, or dropped out of college after six months.
Anderson: Oh, he’s the welder?
Anderson: Oh, okay.
Levinson: Yeah. Well, not a welder. He was a solderer but he — we taught him how to do circuit board layout using the CAD program on a PC, and gosh over the years he’s learned how to do integrated circuit layout. He’s learned how to do simulations. He’s learned how to do all sorts of things. So, he’s just, you now, he’s just immensely, immensely teachable. The guys from the machine shop eventually one of them came over and we hired him too, and he had a Masters in materials out of Berkeley, even though he was running this machine shop. And, his dad had been Allegheny Airlines’ president, or something. They were working on turbines. They were re-machining turbine blades that had been damaged like by birds, or rocks, or I don’t know, whatever. So, we did that. He was an employee, and we got more and more contracts.
Now, when you were creating Finistar you...
Levinson: No “t”.
Levinson: Just so you know. [Laugh] F-I-N-I-S-A-R.
Anderson: Ah, Finisar. Were you going to other people for advice? By then you’d had eight years of experience in business. Were there people that you turned to for advice?
Levinson: My partner was a division manager at Raychem, that eventually joined. And…
Anderson: Uh huh. This is Jerry?
Levinson: And, he’d run a 125 — Jerry Rawls — he’d run $125 million division and profitably, and…
Anderson: So, were you going to him right at the beginning for advice or suggestions? Or…
Levinson: Well, I was comfortable with it too. And, I set up our first accounting system that we used for a number of years. And we, I mean we both understood each other’s parts of what we did best. And, I mean Jerry was an engineer, but he was, but he’d long been a manager and a sales guy, and I was a sales guy but I had long been a scientist and an engineer. Yeah. So, I’m sure we did lots of talking and helped each other that way, and he helped me lots. Whatever I’d say, I mean. So, we started without our own money. It’s one of the only; it’s one of the rare companies where that’s true. We owned most of it when we IPOed. So, so we had, you know, our sales were three-fifty, then six-fifty, then nine hundred, then back to six hundred, then $1.1 [million], $2.5 [million], $4.7 [million], $8.8 [million], $22 [million].
Anderson: So, who were your expanding group of customers over that time?
Levinson: So in the short telling of it, and a good answer to that [is we did] whatever people asked us to do. Some, and it increasingly more of it turned toward fiber optic systems, because that’s where we knew stuff. And the last customers we did things for them but there were times when there were parts of the project where we said, “Your project needs this,” something, whatever. And we’d say, “We’ll build that for you, but we’re going to design [this component of your system] on our own nickel. And this may be a part of that, and you want that. We’ll build that and we’re going to charge you for that, and here are our rates — $60 an hour,” whatever it was at the time. So the answer is, “We’ll do this for you, but this thing that plugs into that you can’t own that.” We were very clear about it.
Anderson: Okay. So what would you do with that? Would you…
Levinson: This is still our business today.
Anderson: Okay. And, would you patent that? Or…
Levinson: We patented lots of things inside that. Some were really fundamental. And some of the things that were needed for that came from these other systems. So they were, they were, you now, one of the things that Finisar’s known for is the fact that our modules are smart. So it’s now quite normal in all sorts of communication links for the link to be able to self-diagnose, even while it’s carrying data, “Is there light there? Is the light being degraded? Is the laser being degraded?” and so on. So we made modules that allowed you to do those, to look at those things. “Is the laser aging prematurely? Should you replace this part?” And today that’s used throughout the field. But it didn’t exist at the time.
Anderson: When did you get our first patent?
Levinson: Eighty-one, probably.
Anderson: You started in ‘85.
Levinson: Oh, Finisar?
Anderson: Yeah, Finisar. I’m sorry.
Levinson: Oh, I don’t know. Every, probably, well we probably filed some in ‘88, and we filed every year.
Levinson: We file patents every year.
Anderson: Patenting is relatively expensive.
Levinson: It is.
Anderson: Where did you have the money to do that?
Levinson: Well, we worked with guys, the guy I ended up working with Gary Williams, is a really great attorney here in Silicon Valley. If you research the interesting patents in the last thirty years he’s all over them. See this?
Levinson: Gary. [Laughter] Windows NT. Gary. Music on PCs. [Gary also wrote the key patents for the iPhone!] Gary. You know, he’s always been in the right place at the right time. And, he was an engineer. He was an MIT engineer, worked for Zylog, designed chips, and went back, Harvard Law, practicing in patents. And so, guys love him as a patent attorney because he’s, because he’s a nerd. He’s an engineer. He’ll come back to you with block diagrams that aren’t just rendered, but they’re improved. He’ll ask you, “Why did you leave this out? Oh, well, let’s talk about that.” [Laughter]
Anderson: He sounds like kind of a pricey guy with those kinds of clients?
Levinson: He wasn’t. He was young, just like I was at the time.
Levinson: And so we both grew up together.
Anderson: Ah, good.
Levinson: So that worked out. And anyway, so it’s always been fun. I’ve always tried to steer him business. I think it’s been good for him too, over the years.
Butler:Did you do any debt financing?
Levinson: We did. So the way we financed the business — you’re right — was for the first few years we were profitable. So, this quick telling of the business is, for three years we did contract engineering for other people. Then for three years we sold bad products but we thought they were good. And after three years, we sold good products. And the reason it’s three years is it always takes about three revisions to get a product any good. You know what the first good DOS was? 3.2. First good Windows? 3.1. First really good iPhone? 3GS. [Laughter] It takes, I mean things get better over time. That’s just what happens. And so, we had some of our modules that were called Rev-A and then Rev-B, and so we sold a, maybe a hundred or two hundred of Rev-A. We sold a thousand of Rev-B, and we sold 100,000 of Rev-C, and then it got better. And so, it took time for that to happen, and that’s the normal progression of a business. So, by the time, so early on we didn’t use debt financing. I had a little money. Jerry had a little money, but not much. I mean $10,000, $30,000 here. That was it. But, we had contracts and the contract money was pretty good for a while. We did some things with some interesting places. We, one group came to us called Explore Technology and wanted us to build a video-on-demand system for the Consumer Electronics Show in 1990 or ‘91, and they came in August and said, “Can you get it done by January?” We were starving to death and so we said, “Oh sure.” [Laughter] We did get it done, but their funding was from the band U2. I’ve met Bono. And The Edge. So, anyway these guys, they had money and they paid us, I don’t know, probably more than a million dollars over a couple of years to do that stuff. So, we did different projects. We did a scuba diving computer for people that sold really well, although none of us that worked on it had ever scuba dived. [Laughter] So, we did some things that were interesting as well.
How did debt financing play into this?
Levinson: Well, eventually when we got to the point where we were selling good products, what happens is the company’s growing so fast and even though you’re really profitable you can grow so fast that you can’t, you can’t, the spread between your payables and receivables, can’t be handled easily. So, we went to our homes. We threw our homes into the thing, and both of us borrowed against our homes. A lot of guys have asked, “What was the best day in Finisar? Was it your IPO?” And, I said, “No, it was the day the bank came back and said, ‘We don’t need your houses. This is a good enough business and we you guys, your business is okeydokey. It’s good enough for us.’ “So, we went one year from $8.8 million to $22 million, which is almost a tripling in business, right, and we were profitable, just so profitable. We had a contract with Lockheed to go do some modules for them, fiber optic stuff, and we got to the end of the year and we had, it was more than a million dollars they owed us, at the $8.8 [million] year I think, and we said, and we were profitable. It meant we’d have to pay in more taxes if we took the — so we said, “We’ll just push out that invoice to next year.” A year later we did the same thing with exactly the same invoice. We still hadn’t invoiced them, [Laugh] because we were just so profitable, but we were out of cash all the time. I mean it was just; we were cash desperate a lot of the time.
When did you hit that profitable...
Levinson: We were profitable from the beginning. We paid taxes and we paid bonuses. We just didn’t pay ourselves very well.
Anderson: I see.
Levinson: So, we were, it was okay. It was, by — but, even when we IPO’d our salaries were low, compared to others.
Anderson: Now, when did the IPO happen and what was the impetus for that? What made you decide to do that?
Levinson: Well, so a year before we IPOed we, for five years a venture capital firm had been coming to us and saying, “Look, you know, we’d really like to invest in you guys.” And we kept saying, “Well, we don’t need the money. The bank’s now financing us.” And they said, “Well,” but they, but we liked the guys eventually. They were TA and Summit, out of Boston, and they only do late rounds.
Anderson: What was the name of the firm?
Levinson: TA Associates.
Anderson: TA Associates?
Levinson: And Summit Partners. Two groups. And, what they do is only the last round financing, typically. They love finding companies that are owned by the founders, profitable, and they buy a little piece of it. So, in the summer of ‘88, I mean the summer of ‘98, a year before the IPO, a year and a half, we said, “Okay. We’ll let you in.” And, our thinking was, “We need some guys to get this company really ready for an IPO that know how to do this. Frank and Jerry are only going to do it once.” And so, we did that. And, they put in $35 million and it was some mix of debt and equity that pleased them. We each [Jerry Rawls and Frank] took $15 million and we left $5 million in the company, $5 million plus interest was still in the company the day we IPO’d, and that’s typical. They don’t care if the founders take some money out. So, my partner came — when he did that he said, “Look, we ought to do this. Anything could happen.” I don’t think he said the Trade Centers could blow up, but it was, his thing was like, “You know, we’ve done this for a long time, let’s take some risk off the table.” It was — so anyway, so these guys then helped us and we kept, it was another really good year, and we were growing again, and so they said…
Anderson: And that was during the dot com bubble?
Levinson: The tech boom. Yeah. So when we IPO’d we had eleven years of profitability, and the dot com boom was not just a dot com boom. It was the fiber optic boom. So, it was, so we IPOed in November of ‘99, a year later. They invested in November of ‘98. And, I don’t know the exact ratios, but they made more than 50x their money in less than one year. I’m not talking about fifty percent. This is serious money. [Laugh] And, they got out as well. They got out.
Anderson: Oh, they did?
They got out in time. Yeah. Well, we had a secondary. So, whenever you go public, six months later — first of all you can’t, all the guys inside can’t trade for six months, let the stock settle, let the market settle, let everybody prove they’re still good for being a public company. And then after the secondary, and all of us sold some in the secondary, but then they sold out. And they were brilliant. The company IPO’d at nineteen and within the first day we traded above a hundred. So it was just one of these outrageous times. Just outrageous. And, we were trading at P/Es of a thousand, and price-to-sales of a hundred. It was stupid. Anybody in their right mind would have gone, “Sell everything.” [Laughter] But, we were, — anyway, but the company was really a good company, and so it was well received by the market at the time. Then you know what happened. So we IPO’d in ‘99, in August. In April of 2000 we had our secondary, still above a hundred. The stock was still above a hundred. Traded as high as $180.
Anderson: So, were you selling at that point?
Levinson: I sold some. Sold some. We split the stock [3 for 1] at $180, so I know I sold some at $40. So, $60 was the peak at the new split. In that summer or spring of 2000 there were five companies, the top five companies in fiber optics were JDS Uniphase and then four companies that were inside of other companies, but they knew their sales.
Anderson: Was Corning?
Levinson: Corning was one, but it was Corning Photonics, and not the glass. So, in other words, Corning Photonics was the smallest of the five. They had sales of $474 million at the peak quarter. They had approached Nortel to buy the Nortel Photonics business for a hundred billion dollars, and Nortel said, “Not enough.” There’s Nortel’s group, Lucent’s group, Alcatel’s group, Corning’s group, and JDS. JDS had sales of $1.3 billion a quarter, at the peak. Less than two years later four of those companies didn’t exist, dead, and JDS had dropped sales by more than ninety percent. So, it was just a slaughter. And, they, [Laugh] the Corning, the Nortel group was eventually sold for $100 million, so it was a thousandth, but in fact they actually paid them to take it because they gave them inventory worth $120 million and they gave them contracts stating that, “We will buy that inventory for a hundred and twenty over the next few quarters.” Which they did.
Anderson: I did a series of interviews at Corning in 2003 and it was a very, very sad place.
Levinson: Yeah. So, Fine — what’s his name? Anyway. Jerry Fine was the CEO there, the group CEO. Anyway, yeah, it was brutal.
Anderson: So what happened to Finisar?
Levinson: Finisar never had a down quarter in terms of units. We powered through the thing. So, we did not, so those guys peaked in, I don’t know, April, May, June, sometime in that year of 2000. We went in the quarter or so before that, for four quarters, we went from $20 million in sales to $27M, to $44M, to $64M by January 31, 2001. So, just hyper-growth still, hyper-growth. No stopping, in 2000. This was 2000. And so, in January 2001 we did that. We had our first order cancellations on February — we thought we were immune, because we were selling mainly in the Datacom space and not the telecom space, and the data com space was what the Internet was. So, then we did $52 million, and then we did $35 [million]. So, we had a pretty hard cutback. But our annual sales went from $35 million, to $68 [million], to $188 [million], to $144 [million]. And then a couple of years later we were back up above $188 [million].
Anderson: It sounds like Finisar had survived far better than anyone else, but still there was…
Levinson: Oh, it was hard. The pricing fell — so we, so even though we sold more units on an annual basis every year, we never sold less units, all right so our market continued to grow and market share continued to grow. The pricing was just falling horrifically, and the reason was at the fiber optics show the OFC or Optical Fiber Conference for twenty years the attendance had been 4,000 guys, mostly the same 4,000 guys. It’s still 4,000 guys today. But, in the peak it increased to 17,000! So, 12,000 people were bankers and lawyers, [Laugh] looking for deals.
Anderson: So what happened to Finisar? Were you laying people off? What effect did it have on the business?
Levinson: Well, in April of 2001 we were still a hundred percent USA-based employees, and we opened our factory in May of 2001 in Malaysia and three years later we had eighty-six percent of our employees in Asia, and I helped with that. So, we have 1,500 people today in Shanghai, and 4,000 in Malaysia, and a couple hundred in Singapore, and we have probably another 1,500 people that are subcontracted to us in Thailand.
Anderson: How do you do that? How do you, as an American entrepreneur and an American businessman, shift the business, and it sounds like pretty quickly, too…
Levinson: Yeah. Especially a guy from Indiana, who’s got all the people in Indiana going, “What are you doing little boy?” [Laugh]
Anderson: So how do you make contacts and how does that work?
Levinson: Well, so it’s interesting. I mean, the short answer to that question — there’s two questions. So, “How did you do it?” is we realized somehow that the disk drive industry, which was imploding at the same time — fiber optics was not really imploding. It was just changing. And honestly, I mean, it’s so funny you look back and if you went back into 1980 or 1990, or ‘95 even, you ask anybody “Who will be the fiber optic companies in 2005 or 2010?” you’d say, “Well, it’ll be Bell Labs. It’ll be Corning. It’ll be Sumitomo.” and you wouldn’t put Finisar on the list. [Laugh] And yet, if you went back to 1985 and said, “Who’s going to be a significant communications company in 1995 or 2000?” you wouldn’t put Cisco, because it didn’t exist either or was just starting. You get just Bell Labs forever. So, yeah, the way you do it is, in this case, we realized that the disk drive industry was kind of like the fiber optic industry. What created the bubble for fiber optics in terms of investment was people said, “Electronics, what a great wave we’ve had for twenty years in venture capital and all this stuff. Photonics will be the next wave.” And, that’s not right. When you make photonics and integrated circuits the same in your mind you’re making the wrong leap. Integrated circuits can be processed as wafers and things like that, and lasers are processed as wafers. The actual things that we sell, transceivers and things like that, they’re more hybrids of metal, and glass, and plastic, and circuits, and circuit boards, and what’s the equivalent, a disk drive. And we don’t have motors, but otherwise we have everything else. We have precision alignments, precision this and that. So we ended up hiring a bunch of disk drive guys, and the disk drive guys had been in Asia for twenty years, or ten or fifteen years anyway. So we hired a bunch of disk drive guys, because the disk drive industry was going crazy. We bought a disk drive factory that had been built two or three years earlier at $150 million [and paid only] $10 million, including all of its equipment, intact, and its workforce that had been trained in Six Sigma black belt, you know Six Sigma stuff, and all that stuff, and we just hired them.
Anderson: So this was an Asian workforce that had been trained in Six Sigma?
Levinson: Yeah. So we’re sitting with the head of the state in Malaysia, the governor essentially, and we were sitting around, this is early April, and this guy, his staff was there and he said, “Well, when do you want to open this factory that you’re going to buy?” And, I said, “We want to open on, I don’t know, May 1, let’s say.” And, the staff, “Oh, it can’t be done. It can’t be done.” So, I looked at the governor. I said to him, “Well, okay,” I said, “but the only reason we want to hurry and open that factory is because if we do we’ll be able to hold onto the employees, but if not they’ll move up to Pinang out of your state and if you don’t care about the employment here I don’t either.” [Laughter] And, he goes, “You [pointing to one of his staff] walk the application down. Get it done next week. You [another staff], walk it over to make sure that happens too.” We opened. [Laughter] It was game, set, and match. And it worked out great. So but the other side of it was, a more complex answer to your question is that we realized from the beginning that Finisar had to be a world company. One of the really wonderful stories about Finisar, and a short telling is, that today we sell ten megabits of bandwidth. We sell these little things the size of my finger that send and receive light. But if you measure this thing by its bandwidth and then you say, “How many of those do you build?” and so on, we sell ten million bits per second of bandwidth, ten megabits per second of bandwidth per month, per person on Earth.
Levinson: So you get ten megabits, and so do you, and so do I, so does every person in Russia, in China, and South America. It doesn’t matter. And that number has been growing at 10x now for, every five years for twenty years. So I wrote an article five years ago, it as one megabit. I said it’ll be that, in four or five years we’ll get there, and I still think we’ll get to the 100-megabit node as well. [Note — in 2011 the figure is now 100 Mb/s per month per person on earth, so the exponential growth has continued.]
Anderson: Well, so…
Levinson: So, we had a really broad impact. So to think of it as a U.S. company was the wrong thing. You know, yes Cisco’s our biggest customer, but Huawei’s a big customer, and they’re the Cisco of China. And so I think a right image, for us anyway, was to realize we have to be a world company. We can’t…
Anderson: And that began when? When did you go international?
Levinson: Uh, 2001.
Anderson: Two thousand one? Now, I want to go back…
Levinson: But we had to, right? I mean, we saw the units going up and the prices falling faster. How do you get all that under control? And that was our response.
Anderson: But let me go back for a minute.
Anderson: Jerry Rawls joined the company, I think, in about ‘89?
Levinson: Yeah. But he joined the payroll. But, I took him to lunch in ‘87, before we started in ‘88. I said, “I’m doing this. I hope you’ll come.”
Anderson: So once he came on the payroll what were your two positions? What were your respective positions?
Levinson: I was CEO [in title] for a number of years, for, until we went IPO. He was president. We just flipped a coin like Hewlett and Packard did, in some sense, but he was always the outward-looking face of the company and I was always the inward-looking face. When we IPO’d, a few months before that he became CEO and president and I became CTO and chairman of the Board. And, it was, and it’s always been a partnership that worked, and it’s really important to have that kind of partnership. I mean he was better at accounting and things like that, but one year he gave me the taxes and right before he filed them he says, “Here’s our taxes we’re filing for the year,” and I came back to him in ten minutes and said, “Well, these are okay but we’re paying too much because you’ve got the inventory valued wrong.” And he goes, [Laugh] “Who are you to tell me?” And he comes back and goes, “You’re right. We need to fix this inventory.” [Laughter] So, both of us, clearly he was stronger but both of us had things like that. I’m pretty good at flying wingman when he’s the lead sales guy. You know, I understand how to support him, how to inspire him, and how to help him land the thing. But, he’s much better at setting prices, and so you learn how to work together.
Anderson: Now, what…
Levinson: And I couldn’t have done, I could never have done it without him. I mean, that’s one of those — for sure.
Anderson: Okay. For a little over ten years it was a privately-owned company, and then you went public. What’s the difference between running a private company versus a public company? What role did the shareholders play and how do they have an impact on what you do and what decisions you make?
Well, [groan], the worst of it was — so long-term it’s just that you’re a very public person. In the short run we weren’t just very public we were hyper-public. You know, I’m the richest; I’m the reasonably-wealthiest guy that you know that used to be hyper-rich. I was worth $2 or $3 billion, overnight, because of the way it worked, and I never monetized it, all that stuff. But, it was, and I’m still the largest private shareholder in the company today, even though I’m not doing anything with it. But it was... [Laugh]
Anderson: You’re not anything? You’re not involved?
Levinson: I’m not on the Board and I’m not there day to day.
Anderson: Okay. When did that happen?
Levinson: I stopped being active day to day in 2006 and I stepped off the Board in ‘08 with a big merger we did. (Anderson: Okay.) But I’m still very close, very close to them. I help them in lots of ways if I can.
Anderson: Okay, but, going back?
Levinson: Yeah, let’s go back to the question.
Anderson: Yeah. About what it’s like to…
Levinson: So, the worst of it was, I went right away from anonymity to being number 129 on the Forbes 400, and I had guys attacking my credit cards. I had, literally, Agent Smith and Agent Jones from the Secret Service called me one day and said, “Are you this guy?” And I said, “Yeah.” They go, “Well, do you have this social security number?” And I said, “Well, I don’t…” “Well, we know you do. Your identity’s been compromised.” [Laugh] These are the guys that are guarding the president. [Laugh] “What are they calling me for?”
Anderson: Yeah, definitely.
Levinson: So, that kind of stuff happened. Whoa. It turns out, this guy had targeted the Forbes 400, the 400 richest guy in the America and I was number 129 one year. The next year I was number 399. [Laugh] And I haven’t returned, thank God. But, the point is it, it was brutal.
Anderson: That must be kind of thrilling to be 129?
Levinson: It was and it was scary, because you’ve got all this responsibility to do the right thing. For example, I didn’t sell as many shares as others did, but I just, I felt like, the shareholders bought into what I sold them. I can’t be selling, boatloads of shares. So, I never sold if I moved the share price. And, the share price, most of the time when I sold in those years the share price still traded higher than whatever blocks I had traded. But, in the end I just, I tried to do what I thought was morally right.
Anderson: When you have that kind of money do you set up foundations or what do you do with it?
Levinson: All that stuff. And, trusts for your kids, and trusts for your grandkids, and you try to put a big thing together, you know. You do — I set up an investment structure to try to protect some of the money that I had, and it’s being challenged now ten years later as a tax dodge. Yeah, at the time I’m on record, in emails we still have, saying, “Look, I need to assume that I’m okay at starting a fiber optic company and maybe helping run one, but I have no idea about wealth preservation. Let’s get some guys around me that can help with this stuff. Let’s create a structure.” Lawyers did that. So you find yourself — I mean, I read, there’s two books I read, or it’s four or five books I read. I read Titan, which was the Rockefeller. I read The House of Morgan, which is the story about the JP Morgan family, over a hundred, each of them over a hundred-year period. So, one’s the story of oil and wealth, but it’s how one family handled it. And, I wanted to know, “How do these families handle this?”
Anderson: What did you learn from reading Ron Chernow’s…
Ron Chernow’s books. And, two books on philanthropy. But the financial books were because I wanted to know how to deal with my kids. And so, the wisdom over the years is, “Teach your kids about money is best — don’t keep it quiet. Too many people just don’t ever tell them.” And so, I began right away actively doing it, telling them, bringing them in, helping them. And, the other thing is, “As young as you can, start them in philanthropy.” Because, what that does is it gives them exposure to uses of money and they think it can accomplish something, and they got lots of altruism, in those younger years, wanting to do good. And, you say, “Oh, well, let’s go do that.” And then you go back a year and say, “Well, you thought you were going to like cure cancer, or — did you?” [Laugh] And oftentimes the answer is “No.” But, it teaches them, “Well, okay, how do we do that better? How do we…" And we took that very really seriously. So, it helped. It helped a lot to read that. Because, families come under a lot of stress. Too many senior people in my company got divorced around that time, those at the top, and I was one, and I was married twenty-four years and ten months to a wonderful person. I made mistakes. It was mainly my fault that this thing happened. So it was just a hyper-stressful time. You know, and then [slaps table] just like that. [Laugh] You’ve seen the, what is it, “How to murder your wife,” and it’s just the most famous Jack Lemmon gestures. [Laugh] [Sound] Brap. [Laugh]
Anderson: As historians we’re going to have to ask you, did you find the Chernow books helpful? Or…
Anderson: What do you learn from those?
Levinson: I mean, I found them enormously helpful. Every society, every culture has a saying that’s the same thing, “In the rice fields, out of the rice fields, one generation, back in it by generation three.” And, in my family business that I grew up in my brothers and cousin took it over and killed a ninety-year-old family business in two years. So I’ve watched it happen. This was before the IPO in ‘95. And so I was just, I was really nervous about it, and I read both those books trying to get insights of how those — because, those families have lasted, right. Rockefeller is still in the Senate. And so, the people are still doing good with that blessing. And if you don’t, and I don’t think wealth is a curse, but it’s a blessing that has to be used as a tool and you have to know that you’re not born with the skills of using it. If you want to do good for the world you have to figure out how to really sign up and do that. Our kids, my three kids, actually we raised sort of two more, that is cousins that came, or nephews that came in. I’m really proud of them, too. They’ve all got substantial wealth. They all don’t use it. They all have nice foundations. They all use those [Laugh] and do good things with that, and they’re all doing interesting things. So, I would say, I’m hopeful. But we’ve had talks about it. I’ve told them, “I’m going to read these books. I’m going to share them with you.” There’s a book called Wealth and Families, and another one, something else, and it talks about setting up foundations for kids, even when they’re five, seven, ten years old. Get them involved.
Levinson: Get them to spend money and watch the results and watch it not work. And then train them, “This money is not here to buy, it’s not how long a boat can you buy with this money. It is what can you do for the world? This is why it’s been given to you. This is a responsibility. It’s not a…”
Anderson: Yeah. What you said before about people not telling their kids about money is interesting, because it’s the story you always hear, that rich kids grow up with tiny allowances and don’t realize until they’re twenty or twenty-one.
Levinson: No, it’s important to tell them.
Anderson: Yeah. Yeah.
Levinson: “You’re blessed. You’re a child of privilege. It’s probably not going to change throughout your life, but we’re going to put in structures that you, that are going to help protect you, but we’re also going to put in structures and ways to interact with these things while we’re still your parents, while you still want to hang out with us.” I mean, that’s the important thing.
Anderson: Yeah. Well, but to get back to the IPO and shareholders.
Levinson: So, Chernow’s thing. Big deal. To answer your historical question, I loved him.
Anderson: That’s great.
Levinson: You know, I actively went out and said, “This is a very scary thing happening, it’s not thrilling.” [Laugh] I mean, it was thrilling, but it was scary and it was also this, and it was also this, and now we’ve had to go through two of those. Right?
Anderson: See, history does matter. Right?
Levinson: No, it does! It does.
Levinson: So, anyway.
Anderson: Great to hear.
Butler:If and when my book starts selling.
Anderson: Yeah. [Laugh] Exactly.
Levinson: Well, Chernow’s books, I mean if you read them with that point of view, go look at it. I mean, you’ll see. There’s a lot there.
Anderson: Yeah. But, getting back. You went public at a time when shareholders clearly loved you, because things were exploding in terms of profits, but what happened once things got a little tighter? Were shareholders…
Beginning to ...
Levinson: I mean, I had calls and emails. “Gees, I put my child’s whole college education in your company,” and what can you, I mean I can’t write back and say, “That was really stupid,” [Laugh]. “What about diversification? What don’t you understand about risk?” But, the answer was, the only thing I could do was go in everyday and sign up to do the best I could and to make sure that we made the decisions that would try to retrieve that shareholder value that we could.
But, as the head of a public company did you have a different set of legal guidelines that you had to go through? Was the way you managed the business ...
Levinson: Oh sure. I couldn’t respond to most emails at all. I mean, there’s lot of things like that. And yes…
Anderson: But what about strategy…
Levinson: As soon as I got wealth I’ve been in continuous lawsuits since 1998.
Levinson: And we haven’t lost one. I mean, I’ve lost an appeal. But I didn’t lose it. The company did. But when I fought it on a patent, big patent case, we won even that at a jury trial. But I’ve had shareholder lawsuits. We’ve had personal things that have happened. And we haven’t been guilty. But you’re a target and when you’re that wealthy or that public the target’s pretty big.
Anderson: Yeah. In terms of strategy for the company, though, did you see yourself changing, or Jerry changing with having gone public, not just the wealth but the fact that you were now responding to outside owners?
Levinson: Yeah. Yeah. Yes and no. We stayed focused on the long-term better than most, and that’s why we’re number one today. We invested through the downturns and, well the first, the big one, and the dot com bubble, and we did that knowingly, and we know that the real moral in Silicon Valley is, “The best companies invest through the downturn and power out when the upturn comes,” and we certainly did that, and that was really helpful.
Anderson: So you moved away from the company, it sounds, gradually? Is that correct?
Levinson: I did. And for a bunch of reasons. I mean, I was CTO and the belief with that title, for most people, is that means you’re the best scientist. That’s not what the title means. Well, first of all in many companies it just means you’re the head of IT, but in tech companies that’s not what it means. So, CTO is really someone that loves customers and knows enough about the technology so when he listens to customers he doesn’t make what they ask for, he makes what they need, he or she. And, by finding that crease, by finding that optimal place, you design products that have a longer life. The customer does not know fiber optics like you do, so they’re going to say, “Paint it red.” It’s blue. [Laugh] But, if you hear, “Paint it red,” and you go, “Oh, you really want WDM, you want wavelength-division multiplexing. Let’s make sure we do a whole plan of how we’re going to go forward with that.” “Okay.” So, yeah, that’s who I was, and by the middle 2005, I was already in my fifties and I just turned to a bunch of young guys who were with me and I said, “Okay, where’s the euthanasia plan?” [Laughter] “What are you guys doing? When are you going to bump me off?” And, they’re going, “Oh no. No. Don’t go. We love you here.” So I stayed for a while but increasingly there were, we went through such a long period of downturn and such a long retrenchment, and finally I just said, “It’s time for others to go do this, and I like little companies.” We should talk about what I’m doing today.
Anderson: Yeah, I want to.
Levinson: Because it’s really fun.
Anderson: Yeah. I want to.
Levinson: But so eventually I just felt there were — Finisar had been [emotionally] the number one company before we achieved number one [financially]. If we wanted to hire anyone in the industry all we had to do was call them. And if people wanted to hire our people they called us up all the time and tried to steal our people, and nobody left during the real days when people were just trying to steal people in 1999 and 2000. We kept everybody. And in essence, that type of feeling we just had a lot of great people and they were all waiting for their chance to run this thing we’d started. So I just felt like, “Man, I ought to let them do it, they’re good guys.” I mean, they were the best guys from Bell Labs, or Corning, or JDSU. So it was, so now they were at this place where the culture was right, where we knew how to win, and so I just felt that was okay. So I stayed on the Board and began doing other things, a little, and some were philanthropic, and some were investing, and today, I’ve got some big philanthropic projects that are running and I’m now starting up, I’m on my new startup. I’m starting an incubator in Singapore with the help of the Singapore government.
Anderson: And this is New World Ventures?
Levinson: This is Small World Group.
Anderson: Small World Group. I’m sorry.
Levinson: Yeah, so I’m starting companies in Singapore.
Levinson: And again, it’s a world, it’s a worldview.
Anderson: One of the things we haven’t talked about is networking and the nature of the work that Finisar has done. You were saying that when you started out you were a technology company. Has that balance changed? Do you have more people doing longer-term research or are you still focusing more on development and technology? Or what’s the balance between longer-term research and shorter-term development, would you say?
Levinson: Hmm. Interesting. So, there’s a couple ways that works. So, while I was still there we did more longer-term research still, although not like Bell Labs could do it. Right. I mean…
Anderson: Well, what would long-term for Finisar mean, I mean in terms of years?
Levinson: Well, we created product lines with ideas that were, where we thought them up. And, but they weren’t as fundamental as inventing the semiconductor laser, or things like that.
Anderson: Well, very few things are. I mean, those are really…
Levinson: Yeah. But we’ve done some things like that. We’ve done some things like that. But, the real way that happens today is different than you think. A lot of risk is taken by venture capital groups, and in fact, I mean it’s very subtle but it’s easier for big companies to buy — why does Cisco buy technology? That’s really what they, all they do is do acquisitions for the stuff they need. Their internal R&D group makes new products, but they’re more evolutionary than revolutionary. They buy the revolutionary [technologies]. Why do they do that? And, the reason is because people pay for their shares based on a price-to-earnings ratio. So, if their earnings go up their share prices go up, and they buy companies with shares. They buy venture companies with shares. So, they can buy more R&D in a more efficient way because they buy the company at that point. Yes, they pay a lot more than the venture capital paid for it, but they know the outcome. So, they can say, “Well, there’s ten [startup companies] that do some kind of switch that we want to have,” right, “ten groups.” But, they go and say, “We like this one.” And they say, “Well, we can use shares to buy that.” So, it’s a balance sheet transaction, whereas if they go and pay [internal R&D] guys to do that it may take them a number of years, it’s a profit and loss impact then, it goes on the expense side of the P&L, not the balance sheet. That degrades earnings, so the stock price comes down, which is a problem. So, the U.S. tax system and the world’s tax system in some ways is set up against big corporate research. And, when you…
Anderson: That’s really fascinating. That’s one of the things that we were looking at in the last study we did.
Anderson: Yeah, that’s a very good analysis.
Levinson: In a sense I don’t know if it’s good or bad, but part of me thinks it’s probably good. You know, when Bell Labs was being dismantled by the Justice Department I tried to write people letters. I told everybody that asked me (who cared what a thirty-year-old kid thought), I said, “This is bad. Yes you should break up IBM, because processors are not the same as communications. Communications require standards.” If you and I and he are going to talk, we have to agree. [Laugh] But, if we’re going to compute something, whether I use one computer architecture and you use another, two plus two is still four.
Butler:Or an abacus.
Levinson: An abacus. Right. Same deal. But, it’s not true with communications. The protocol that we speak we have to agree on, and so on. So I said, “You shouldn’t do this.” But I thought, I, well clearly for my own well-being I was wrong, but I think, I think I was wrong generally. I think it was too parochial a view that AT&T would be able to control the world anyway. There were lots of other nations that had their points of view. And, they were holding back the field. The field was ready to move faster and they were holding it back. So, in essence, when I was at Bell Labs I wrote this paper, it was my second paper I submitted to the Bell System technical journal. The first one was published. And it was about, “Let’s go take compact disc lasers and gallium-arsenide integrated circuits and let’s build really fast fiber optic stuff that works over multi-mode fiber.” I swear this is a true story. [Laugh] I can’t prove it anymore. And, I turned it in to my supervisor, and it bounced up the chain and without my knowing it it kept going up and up and it got to the executive vice president of all of Bell Labs, like one below Penzias, and it came back to me and it said on the paper, “This is not Bell Labs’ opinion. We won’t publish it.” [Laughter] That was good. [In starting Finisar], we had no business plan, but that was our plan. That’s exactly what we did. We went, we took compact disc lasers and eventually then VCSELs and we used multi-mode fiber and we created huge markets for fiber optic products that were fast. And then we went back into telecom. Since we could make a receiver that worked at 850 nanometers over multi-mode fiber for, I don’t know, let’s say the integrated circuit in it for twelve cents. We could change the photo diode in it and it would work in telecom wavelengths, still twelve cents. The guys in telecom were selling those receivers for fifty bucks. We were building them for a dollar. So, when Finisar moved in, I mean for the — one telling of the story of the last decade was, we just chewed into every market that was owned by Bell Labs and everybody else and we just ate it up from the bottom. Because we had the volume. And, we’re the only guy. I started an IC group in January of ‘98. We’re the only guys that make our own ICs, but we have such volume it doesn’t matter. And we use it, we use it in datacom and we use it in telecom. But, if you’re a telecom guy and you’re only going to make 100,000 or a million parts a year, it’s pretty tough. The mask set alone is a million or a million and a half. So.
Anderson: Does Finisar buy a lot of technology?
Levinson: We acquired probably from 2000 to probably 2010 maybe thirty companies, different sizes, some out of bankruptcy, some just little ones, and we got our start in China with a little bitty group that now is 1,500 people in Shanghai.
Anderson: And in China was it to buy manufacturing or was it to buy…
Anderson: Uh huh. Okay.
Levinson: And all sorts of things. Of course, it ended up being the China base as well, [which is important, but we bought the group that makes our lasers, both types, two separate groups. We bought four companies to make lasers and photodiodes. Two of them died. Closed up.
Butler:So, are you…
Levinson: We were not great acquirers [in the early days after the IPO].
Butler:Are you into vertical integration?
Levinson: We are a vertically integrated company. We’re the only really, truly vertically integrated fiber optic company. Bell Labs was in the early ‘80s. Today we’re the only one.
Butler:I wrote the history of Western Electric, or co-authored.
Levinson: So, we’re that again. But it’s really different. It’s a very customer-centric driven business as opposed to a research-driven business that was Bell Labs’ story. You know, there were lots of decisions that were made for the Bell System because Shannon’s Law said, “Let’s do this,” or whatever. Whereas for us it’s like, “Okay, these guys want it painted red, it’s red.” [Laugh] But, we try to always do that with, “Okay, but how can we really give them what they need as opposed to what they want?” And, when we’re doing our best we do that really well.
Anderson: Now you’re here in the Silicon Valley. Do you find the networking here valuable for you, valuable for the other employees?
Levinson: Oh yeah. I mean, the other thing was…
Anderson: How does that work?
Levinson: The fiber optic companies, a few years ago most of them were here. So, they used to all be in New Jersey, [Laugh] or New Jersey and Japan, and now most of them are here, although I guess there are a couple in Japan but they’re not as relevant. So it’s JDSU, it’s Finisar, it’s a couple others, Oclaro. So, yeah, Silicon Valley’s a wonderful place. I mean, Cisco’s our largest customer. We can get there in minutes. And, they’re not just our largest customer; they’re a really tech-savvy large customer. Google became a big customer a few years ago.
Anderson: Oh really?
Levinson: Yeah. And, we just sell directly into them.
Anderson: But what about other fiber optic companies? Do you get ideas from them? Do you get together and talk business, or talk science, talk technology?
Levinson: You know, not as much. Maybe others do. I mean, what’s there now is more — well, a bad story about me. Yeah. The big fiber optic conference, the Optical Fiber Conference, OFC, came to San Jose three years in a row and I went one day two of the years. I didn’t even go one year I was so busy, and I just didn’t feel it was relevant.
Anderson: Okay. So, that sort of networking doesn’t…
Levinson: It was, but the problem is, part of the problem was this, and I always dream that they would invite me to give one talk, [Laugh] you know, sometime, and I was just going to lecture them a little bit because the conference is still very telecom focused. Historically the industry was created because of telecom, but today it’s really driven by datacom, and telecom is a corollary. Datacom’s the main theorem. Telecom’s just the corollary. And it’s really, it’s how the cool technology gets introduced, but the only way you get to be a company today is you have to sell the datacom side.
Anderson: So do the conferences and sort of the networking not recognize that?
Levinson: Yeah. Oh, they have no concept of it at all.
Anderson: Why is that, do you think?
Levinson: Because they’ve been dominated by guys in big Telcos that have big budgets and some still have R&D. I mean still the Bell companies are still out there — SBC and Bell Atlantic, and things like that. They’re still there. And Verizon. So, those guys think telecom’s everything, but it’s not. This is an industry that changed and the internet gave it scale.
Anderson: Do you serve on the Boards of any other companies?
Levinson: I do.
Anderson: Okay. Are there fiber optic companies?
Levinson: Well, you remember I mentioned the company that we do subcontracting with in Thailand, that we have 1,500 people. I’ve been on the Board of that for nearly ten years. They bought a Seagate factory, too.
Levinson: They even ran Seagate parts for three years, during the downturn, and then converted to exclusively doing optical things. They don’t just do fiber optics today, but it’s mainly fiber optics. They’re IPOing in February [the IPO was postponed due to the financial crisis in 2008 and the company eventually IPO’d in June, 2010], in about twenty days. They’ve always been profitable.
Anderson: Do you…
Levinson: So yes, I’m on his Board and I’m on the Board of a number of small companies, two optical ones.
Anderson: Okay. And, do you find it easier, harder, about the same to work with companies in Asia versus here, as far as working with their CTOs, or their (Levinson: No.) CEOs?
Levinson: In general, I mean the two optical ones are here. One’s down in San Diego that does sensing, and one’s in Minneapolis that does communications and sensing, and different wavelength ranges. And I think if you asked those boards, if am I doing a good job, I think they would say, “He’s our best Board member.” Or, “He’s the most dialed in, he’s got contacts.
I’m also an angel investor in other companies. So I’m invested in five or six companies. In that case I’m a serious investor and I’m on the Board. And, the angel companies, you know, it’s $25,000 or $50,000. So, the investment companies are several times that or ten times that.
Anderson: Okay. Define an angel investor for us.
Levinson: It’s more just a group of guys that get together that like an idea and say, “Okay, we’ll each kick in a little bit and get you started.”
Anderson: Okay. Now I want to ask — because one of our concerns here is the extent to which the Ron Chernows of twenty years from now or fifty years from now can come back and find documentation to understand what was going on in 2000 to 2010. And so I want to ask you a couple of questions about records and then we want to turn to your new venture and ask about that. So, when you were the CTO in the company, how did people communicate? Did they communicate personally, verbally?
Levinson: All those things.
Levinson: And with email, of course. And, I mean…
Anderson: But, what was the…
Levinson: As we became international, email became really important. Right? Because there’s lots of times when communications are happening.
Anderson: Do you mind if ORV takes a picture of you?
Levinson: No. No. They’re happening asynchronously. Right? I mean, they’re awake and you’re asleep, and people still have things they want to communicate. So it’s that. But a lot of meetings, a lot of meetings. I mean, the problem is as a company grows from one, to ten, to a hundred, to a thousand, to ten thousand people the communication problem is growing as N2 almost. It’s, I mean, it’s overstated.
Anderson: I understand.
Levinson: It’s like that, really.
Anderson: And is there a way of dealing with that? Is there a way that you can deal with a company that now has 10,000 employees instead of twenty employees?
Levinson: Well, you have to put in systems.
Anderson: Okay. And what kinds of systems work?
Levinson: Well, for example, one of the things that came in, we had a system that we’d put in called Agile and it’s a bill of materials systems. It’s underpinned by Oracle but it’s written by a separate company from Oracle. And [into that database system], we can throw almost anything, but as you go 7/24 you have people in other places that need to check a bill of material, need to check a spec or a drawing, or customer feedback and you can’t do that with having a meeting. Right? How are you going to have a meeting? So, you’ve got to find ways to do that. If you go to Finisar today late in the evening you will find from four o’clock on the phones to Asia lit up and video conferencing lit up. So, from four to seven o’clock every, lots of things are going on to Asia, because they’re just waking, they’re finally at work and we’re still at work.
Levinson: And on the other hand if it’s Europe it’s the opposite. It’s our morning, their night. So you constantly are trying to juggle those schedules to make sure real or quasi face-to-face to can happen. We made a decision very early on to run our overseas operations not with expats but with people from the country. Great decision.
Anderson: That’s interesting.
Levinson: Because we created partners, not servants. I mean you can tell it. You know, we gave them real things. We said, “Look we are going to either succeed or fail on your care for this problem. We need you, and they knew the same thing for us. Everybody knew we had to do our share. So, I think that really worked.
Anderson: Now, we’ve talked a little — I’m sorry, Orville?
Butler:I want to do a follow up on that in China. My daughter is half Chinese, and so I spend quite a bit of time in China. One of the things that I found there is that just because you’re Chinese does not mean that you’re in the network, that between provinces…) there’s the equivalent of forty percent — what is it called — import tax.
Levinson: The Malaysia [site] came up instantaneously. The Singapore [site] came up instantaneously. The Chinese, the Shanghai [site] took five to seven years before we finally got it profitable, and because we finally had managers in there we could trust. And when the right guy finally showed up he fired lots of people because there were people on the payroll that weren’t showing up. It was graft and corruption, even though it was still almost profitable. Then it got nice. So, China’s particularly tough. But, once you get the right people it’s just the same. I mean, we try to say, “Look, you’re part of this global effort. You’re part of our ten megabits per second per month per person on earth. Right? It’s not China. It’s not India. It’s all of us supplying all this stuff.” If you can make that message stick then people get grafted to that overall mission. So. Anyway — but, it’s hard. China’s hard.
Anderson: We’ve talked a bit about Asia, but not about Europe, and do you have any…
Levinson: My wife is German.
Anderson: Ah, okay. [Laughter]
Levinson: We bought the company where she was working out of bankruptcy. [Laughter] She was the HR head. We tried to make it go for a year. We then fired everybody. Then eventually we got married.
Anderson: I hope she wasn’t still HR head when you had to fire her?
Levinson: No. [Laugh] But, my point is, no, Europe happened too. Europe’s tough. I mean, it’s not especially strong in our industry. They don’t do much there anymore.
Levinson: Yeah. I mean, Alcatel is all that’s left. Siemens is out of the fiber optic business, and really sort of Alcatel is out of it too. So it’s us, and we sell a lot over there.
Anderson: I see.
Levinson: But, in general, we don’t sell to you, ever. We sell to Cisco, so we’ll sell to Alcatel. And, there’s not many customers left for us in Europe, because we don’t sell to British Telecom, or France Telecom, or the German PTT, or whatever.
Anderson: Would you sell to Siemens? Are they still manufacturing?
Levinson: We could, and we have sold to Siemens. I think we’d sell less because they’re just not as engaged.
Anderson: I see. Okay. Well, getting back to a couple of questions about records. Does Finisar have a, do you know if it has a records retention policy, a records…?
Levinson: They do. All my notebooks are still there.
Anderson: Okay. Great.
Levinson: I don’t know how long they’ll keep them. And the only thing I know about this too is because of all these darn lawsuits I’ve had to go back. But the trouble, the trouble is companies are organic. They move. And what’s relevant, what I kept when I was there with an, you know, with a purpose who knows? Things get moved around. Things get changed.
Anderson: Well, one of the things that we found when we did the study of R&D in big companies is that there isn’t as much emphasis on lab notebooks anymore. A lot of companies, (Levinson: That’s true.) IBM doesn’t…
Levinson: No. You file a disclosure and it doesn’t have to be — so signing the notebook like we did at Bell Labs, that’s not the case anymore.
Anderson: What about Finisar, is there an effort for scientists to keep notebooks?
Levinson: Yes. We have notebooks that we hand out to people and they keep them, but — I mean I don’t know, I’ve not really been in full-time there for the last four years. So.
Anderson: Sure. And, what about other kinds of records that the company keeps?
Levinson: I would guess email records are pretty carefully done.
Levinson: And, there are lots of attachments on those things. Right?
Levinson: I mean, that’s where the real richness is going to be is find ways to mine email threads twenty years from now.
Anderson: Yeah. What does Finisar do with email, you know, what…
Levinson: We keep it. We’ve got a no-destroy policy of it, I think.
Levinson: Well, because I think it’s legally binding.
Levinson: Well, I’m not sure we do. I’m not sure. I mean, there was a debate, now that I’m remembering, because it is legal to throw them away and there are times you wish you had. It’s like Nixon and the damn tapes.
Anderson: Exactly. Yeah.
Levinson: So, I’m not clear. Not clear.
Anderson: Can you think of other kinds of records that if someone were to go back twenty years from now they could find of yours?
Levinson: Just notebooks and email.
Anderson: Okay. There would be reports, I imagine?
Anderson: And, contracts with…
Levinson: But, so databases, so Agile would be a big database, and there would be things that we would write, reports. Reports could be “This module passed or failed for these reasons and for these tests” and those would go in. And there would be guys that would author those reports, and so they would be — and so, if we kept the Agile database that would be there. And Agile does that for a lot of companies. It’s one of those hidden jewels for you guys, if you wanted to find out what’s happening to Agile databases over time.
Anderson: So they are an outside company, a vendor that maintains and also preserves?
Levinson: No, they don’t preserve. They just write the software.
Anderson: I see.
Levinson: We run it on our servers, and of course it’s run globally. So there may even be server replication that occurs across our networks that make it so that if you’re in Malaysia it responds fast to you. But the records are up to date.
Anderson: Okay. And there’s some, do you know if there’s some system for backing the records up so that they’ll last over time? Or…
Levinson: Yes. There’s lot of disaster recovery and all that. But I have no idea what the policy of “What about twenty-year-old records, or fifteen-year-old records?”
Anderson: Right. Okay. Tell us more about Agile. What does Agile include? What records does it document or what records…
Levinson: You can — almost everything that’s on the engineering side, scientific side of things. Almost everything.
Anderson: So, it would include contract specifications?
Levinson: It could.
Anderson: Financial records?
Levinson: Yes, cost and bill of materials things. I mean, it’s engineering.
Anderson: Okay. Right.
Levinson: So, it’s not our P&L. But it would be, “What’s the bottom, what’s the bill of materials for this thing look like?” “Where are we,” — it would include even notes of, “Hey, well the bill of materials is this, but we can get another dollar if we go get, if we go attack these three points with vendors. (Or, if we design differently.”)
Anderson: Okay. Now, as far as your own personal records…
Levinson: So it’s all the schematics. It’s all the layouts. It’s all, both mechanical and electrical, it’s all the test reports on how those things performed. It’s all the customer feedback. It’s all, it manages that process.
Anderson: Okay. So, it really is comprehensive in terms of engineering?
Levinson: There’s an NPI, or New Product Introduction process, and it’s all managed by Agile.
Butler:Are there other systems similar to Agile that…
Levinson: There are but I’m not aware of them.
Levinson: But it’s broadly used. It’s broadly used.
Anderson: Now, what about your own records, you know. I assume that you brought some records with you when you left?
Levinson: Almost none.
Levinson: Almost none.
Levinson: It didn’t seem appropriate. I mean, I’ve kept a cubicle there for a long time. It may still be there and there may be still a, I know there’s still racks of my notebooks there. I mean, I left on good terms and we’re still really good friends. So I, they may still be there. I assume they are.
Anderson: What about other business records? Do you keep them here or do you have another office where you keep them?
Levinson: Well, I still have a laptop that I used from those days and I still have email records from those days.
Monika: Hi. Excuse me.
Anderson: Hi. Of course.
Levinson: This is my wife, Monika. [Recording paused]
Anderson: Twenty minutes is about right.
Anderson: Because we’re about finished with the questions here and I wanted to ask you to talk sort of free form about your new venture.
Levinson: Well, I like working with little companies.
Anderson: When I say “free form” I, of course, have got to give you a little structure. So, how did it get started, and where are you at now?
Levinson: Well, I’ve been working with little companies now for four or five years, helping them start, and answering questions. And…
Anderson: Are you now a venture capitalist yourself?
Levinson: Yes. In some ways I am, for sure. I mean, that’s a very reasonable description, and I like Singapore. It’s the easiest of the Asian countries for white round-eyed guys to go into and feel at home. All the classes over there are taught in English from kindergarten on, so everybody’s bilingual, Mandarin and English, and yet it’s Asian, and I feel like I’m old enough that I’ve got to make sure whatever waves I’m going to try to surf they better be ones that I don’t have to make [the wave], in some sense. I mean, at Finisar I had to make the wave. Right? Otherwise I would have surfed up the Bell Labs wave, whatever. I’ve done some projects with them and things. Last summer I became aware of a proposal, a Request for Proposals that they were going to issue for people to start incubators. And, I don’t know how much you want to hear, but I’ll try to do it quick.
Anderson: No, we’re interested in this. In fact, let me mention that one of the things that we see as an outcome of this project is to do a comparative study of startups and entrepreneurs internationally, in Europe and in Asia, and we’d like to get a little advice from you as well as learning what you’re doing. So.
Levinson: Well, so Singapore was the first place that Western guys, whether Europe or here, went for manufacturing, in Asia. And because, and in 1965 the founder of that country, Lee Kuan Yew, started them all off doing English, and he started creating a lot of focus on education. They have all these crazy laws about no spitting. Really, the real answer is they decided to stop cleaning the place as much and put more money into education. We think it’s our right to take a bucket of Kentucky Fried Chicken on the subway, but that means we just have to clean the subways a lot more and we’d pay more people to clean subways than to educate our kids. (So that’s, and I’m actually politically pretty liberal. So I may sound very right wing in that but it’s a mixed thing. Anyway, Singapore was this manufacturing miracle and, so in 2000 they made, most of the disk drives of the world came through Singapore. Today, zero. So, it’s evaporating. And…
Anderson: Is that a healthy thing or not a healthy thing?
Levinson: Well, it’s just a fact. China’s cheaper.
Levinson: China’s now online, and it wasn’t when they got started, and India’s coming online, and Bangkok’s coming. You know, everybody’s coming online. The Internet’s changing the rules. So, Singapore’s a first-world country. They just become more expensive, right? People are more educated. They get paid more. So, no one goes to Singapore if you want to manufacture. I mean, one really interesting thing, our factory runs 7/24 and if we ran eight, or no, 5/16, which would be half, right, half a week, but it still sounds like a lot of time, two shifts. Our cost of capital to run that factory would be the same as our labor. So, if we run 7/24 the cost of capital gets cut in half again. And, that means — it just has really expensive machines to make these twenty-dollar parts but we’ve got to run on, but the machines will run more parts if we run them 7/24.
Anderson: Right. Sure.
Levinson: So, if we do that, and which we do, it’s better. So why don’t we make stuff in America? Nobody wants to run, wants to work graveyard shifts on weekends here. I mean, that’s honest. And if you can find a place I’d think, I’d prove you wrong. And, they don’t want to do it in Singapore now either. [Laugh] Really. They’re smarter and they want smart jobs. And, in China they’ve got still more people than they have good jobs, and the same with India, and the same with Thailand, and Vietnam, so the manufacturing and high labor content jobs flow there. That’s really what it is. Lots of things today have a cost of capital factor. It’s not just other things. So, the other thing is, when you go to those countries, it’s not that you just replace labor. It’s not one for one. When you cut the labor that much you actually hire twice the people and you make the product better fast.
Anderson: Hmm. That’s interesting. So, elaborate on that a bit.
Levinson: Well, if you make a million products a month, a million units a month, and you have a ninety-five percent yield, it sounds great, right?
Levinson: That’s 50,000 things you have to have a hole to put in, and bury them, because they’re crap. So, if you have the thing yielding at ninety-five percent there’s a big mistake. You think, “Well, I’ve got to go hire a good engineer and find the five percent problem.” Wrong. You’ve got to find ten half-percent problems. And a half-percent problem means out of every thousand things you make there are five. That’s just fine; it’s just even hard to find those five. So, you’ve got to make 10,000 or 100,000 before you find a big enough population to really understand the morphology of that population and what’s wrong. So, what you do is you go hire several teams in Malaysia who are engineers, who are desperate for a real problem that makes them feel like first-world people, and you sic them on the problem, and they go after it. And, they work all different hours of the day and night to collect all these things and things move forward. But, it’s otherwise really challenging. So when you move to Asia just the whole dynamics change, because you can afford to do things that you can’t do here.
Anderson: Now, the name of your company again? I got it wrong the first time.
Anderson: No, the…
Levinson: Oh, Small World Group.
Anderson: Small World Group. When was that founded and are you the only partner?
Levinson: At the moment. A guy, Dean, who you met upstairs, is about to be the second partner. He and I are working together over in Singapore. He’s been over now for the first time and I’m hoping we’re going to make this thing work. But I’ve called it a group for, I joke to people, I’ve called it a group now for a few years just so I don’t feel lonely. [Laughter]
Anderson: Ah, okay. And, when did you start that?
Levinson: Four or five years ago. I’d been doing philanthropy and other things under that title and I have done some investing under that title. But, the Singapore thing is now definitely under that as a brand. So, there’s a company over in Singapore that’s a Small World Group Incubator, Small World Group Ventures Ltd., private limited, and it’s a regular corporation over there. So Singapore now has to become this first-world country, and they can’t even just do engineering to make manufacturing better, because there’s no manufacturing there. So, they said, “Well, we better find ways to get guys doing startups. But the Asian culture’s risk averse. So, what they said was, “Well, if we want to make Silicon Valley here we better bring some guys over from the U.S., not just Silicon Valley but other places that want to start little companies. So, they had an RFP where they said, “Come and propose to us and the deal is this. If you come over and start an incubator we’ll give you money. If you decide a company should be started, that you’ve defined, and however it comes, however you do it, if you put up fifteen percent of the money to start the company they’ll put up eighty-five percent.” Now, that’s no big deal, I mean, because honestly all I’ve still put is my fifteen percent at risk. But, what they did was, and this was a scheme also run in Israel to help them develop, is for the next three years at your option you can buy out the government’s eighty-five percent at only a five percent per year increase.
Levinson: So, if they put in $500,000, two years later you can buy them out for $550,000. The way that translates for the venture capitalist is if you start twenty companies and ten are bad, they’re stuck with eighty-five percent of the losses, (Anderson: Right.) and you buy back the ten good ones. So, it’s a strong risk mitigation strategy.
Anderson: And what kind of companies are being started given the fact that Singapore is now a first-world country?
Levinson: Well, they have all sorts of ones. Some are doing it in IT and Web 2.0 stuff, and blah, blah, blah. But, our incubator is going to just do them in optical systems and clean tech, and I’ve gained a lot of experience through this house and some other things like that in the tech space and obviously I mess around in optics. So, so it’s so far so good. And, I think we’re going to try to define “clean tech” really broadly. It’ll be plants, and bio stuff, and, not biomedical but bio, agricultural things could qualify, solar stuff, and clean water things can qualify. And we’ll see. I don’t know. I’m concerned, but I’m in. I’m one of the seven that they chose out of thirty-two applicants and I think we’ll get there, they’ve, and the pot of money they’ve created is on a first-come, first-served basis. I believe the first company that gets started will be one from our incubator and I think we’ll have a strongly disproportionate share of the number of companies that get started. I think some of the others are more over there just to play, and I want to have serious fun.
Anderson: And what about other areas of Asia? Do you see yourself moving into Shanghai.
Levinson: Well, we will. We’ll certainly cooperate with other areas. I mean, this will be, it’ll be enough for the next couple of years to stick around Singapore and create companies there, but we’ll certainly tie them in, I mean, to manufacturing things that I know in other parts of Asia and China for sure. And, we’ll see. I mean, I don’t have a tongue for languages. I don’t really speak very good German at all with my wife. [Laugh] I listen, I listen German.
Levinson: She speaks perfect English.
Anderson: Yeah. Right.
Levinson: Thank god. [Laugh] So, yeah, so — but I, we’ll try. I mean, I’m comfortable in all those countries moving around. I’m with another group that’s doing venture capital and I’m on their, I’m not on their board but I’m actually on their masthead as a partner. They haven’t been able to get the funding now for more than a year, but they just got it.
Anderson: Okay. And what’s that company?
Levinson: It’s called Phoenix Venture Partners. And, they’re going to do materials.
Anderson: And, where? Are they concentrating in Asia? Or…
Levinson: Well, they’re located here but I think they’re going to be not geographically centered; they’re going to be deal-centered. They’re going to want companies that have great materials technology. And their goal, and sort of mine too, is not to go create Googles. My goal is to create companies that can grow up and either be successful or be acquired within a few years. And, really, I mean the dream is always the IPO, but in fact most companies get started and get acquired. More than ninety percent. And, well, a lot of them die. And, the ones that don’t die most of those get acquired.
Anderson: Now, let me ask you for a bit of advice.
Anderson: And, as I say, we see our next step as doing a comparative study. We typically have done that with other studies we’ve done, but we’re not quite sure how to do that with…
Levinson: Who have you talked to?
Anderson: No one yet. Well, actually Arno Penzias has given me some suggestions. But he’s the only one that I’ve really talked to about this.
Anderson: But, you know, if we were looking at Europe and Asia where would you suggest we go? Are there specific companies that you would recommend as good targets for us to look at?
Levinson: Yeah. There’s an interesting guy you might talk to. I don’t know if he’d — I don’t know his background enough, but he’s sort of a friend. The inventor of Ethernet, Bob Metcalfe.
Levinson: He’s in the Boston area. If you — I think there’s an “e” on the end. I’m not sure. If you write him or email him I think he’s, he’s at Polaris Ventures. (Anderson: Okay.) I think he’ll talk to you.
Anderson: Okay. Could I mention that we talked with you?
Levinson: Totally. Yeah. And, I think we’re friends because of networking and all that stuff. But, actually our two daughters went to the same preschool and our wives told us, “Just get along.” [Laughter] So. But he’s a super nice guy. Really bright. I mean, just off the charts bright. And, an academic. I mean, he was at PARC. He took a very, you know, Bell Labs-ish scientific-ish type of thing, and then he took that technology out of there and founded 3Com, which was the first ethernet company, and so on. So, I would say he’s a candidate.
Anderson: Okay. Can you think of anyone else that would be good for us to touch base with?
Levinson: Well, I’m trying to find nice guys.
Anderson: Uhm-hmm. Yeah.
Levinson: I mean, yeah, I mean one of the real killers in this thing is Andy Bechtolsheim, but I just don’t find him a nice guy. He’s the founder of Sun. He’s one of the founders of, he’s one of the guys that really sort of took Cisco to the next level. He was the guy that wrote the first check to Google. I mean, a serious player, but I don’t know if he’d say yes. Yeah, let me think of a couple others that would be attractive.
Anderson: Well, if you think of any we’d really appreciate it if — because, we need to get to work on planning this and we’re kind of starting from scratch. So.
Levinson: Well, hold on a second.
Anderson: Yeah. I don’t have the paper. Do you?
Levinson: You know, who I would recommend is…
Butler:Have the what?
Anderson: The statement.
Levinson: You know who I would recommend too is Pat Gelsinger. He was the CTO of Intel. He’s just left Intel. And, I don’t know where…
Anderson: Okay. And, how do you spell his last name?
Levinson: G-E-L-S-I-N-G-E-R, I think.
Levinson: You could tell him I said to call.
Anderson: Okay. Great.
Levinson: I don’t know how you’d get in contact with him. I don’t have his contact information, but he’s a guy that just started off at Intel and just kept growing, you know, just kept growing. And so he’s sort of the Intel guy, in some ways, of the next generation, and really a down-to-earth grounded guy, and a humble guy.
Anderson: Okay. Great.
Levinson: And, super smart, obviously.
Levinson: So, there are two names. And, what I would say, as you get along, a few months from now, if you send me, if you send me instead of “just give me names,” if you say, “We wish we had people that fit this, these following, different descriptions.” So, if you gave me five different descriptions then I would try to go to work on those.
Anderson: Okay. Great.
Levinson: So, there’s one of the chips, and there’s one in networking, and in software I don’t know. I don’t know someone in software really.
Anderson: Okay. Well, we’ll be sending you…
Anderson: I’m sorry. Go ahead.
Butler:One of the areas that we’re really seeing changing is that physicists are globalizing just like everything else and R&D is globalizing. And so the American Institute of Physics is having to focus more upon global issues.
Levinson: You know, of all the things the American Physical Society, I was thinking, you know, there’s lots of groups, like the IEEE. It’s international. It doesn’t have American in its name, but if I thought of physics and I said, and I had this conversation just in the last forty-eight hours, I said, “Wow, but if it’s physics it’s got to be the APS.” You know, my first thing would be just to change the name. Get on with it. I mean, because what you want to do as America is hold on to the legacy. The world’s moving on. I mean, one reason why Singapore, there’s no money here OR there. No money for risk. And, that doesn’t mean the world’s not going to go ahead with this clean technology stuff. It’s going to. So, the answer is we spent, you know, the ‘90s and the last decade buying VCRs, and buying flat panels, and screwing up, and doing financial engineering as opposed to things we should have been doing. And I, I didn’t do that. [Laugh] Although, I did some of that.
Anderson: AIP has just now...
Levinson: Right. Change your name?
Anderson: Yeah. You’re right. In fact, our CEO has talked about that. I don’t think it’ll happen. But, let me get the statement because I want to make sure I got it.
Levinson: Come on up and let’s have lunch — because these guys upstairs would love to chat with you too, you know.
Anderson: Okay. Great.
Levinson: And we’ll have our soup if you want?
Butler:Well, let’s — I can do the statement.
We will analyze this as a part of our study of Physicists Entrepreneurs, but future historians and others may want to look at this in their study of...
Levinson: This conversation?
Levinson: That’s fine.
Butler:And, we would like to know if we can keep it in our archives, make it available to future people who would use it and cite it using your name?
Anderson: Okay, great.
Levinson: I would love to be supportive.
Anderson: We will send you the transcript so that you can review it.
Anderson: All right. Great. What’s our timeline? Do we have time?
Levinson: Do you need to go? You’re welcome.
Butler:Our next one is at two-thirty, I believe.