After discussing his background, Jerry talks about the decision he and Frank Levinson made to go out on their own and create Finisar.
SM: What year does that bring us to, when you left Raychem? JR: That will get us to about 1986 I would guess. In 1986 I was the general manager of a division called Interconnections System Division, in California, and in our division I started a fiber optics product development group because most of our customers were either computer companies or defense companies. Most of the wiring in their systems was electrical, it was copper wire, and they were expressing preferences to change some of the high speed signal connections to fiber, and fiber optics, and at Raychem we had no fiber optics products.
So, we started a product development effort trying to understand some of the areas we could serve our customers in the area of fiber optic transmissions, and as part of that I hired a young scientist from Bell Labs on the east coast and his name was Frank Levinson. Frank was a bright young Ph.D. and he had a lot of patents at Bell Labs, and he worked at Bell Corp, etc, so we moved him to California to be a principle technologist in this area, and he worked in that area for only a few months and then he was transferred. Literally the Chairman and CEO of the company came in and said “we are going to move this guy” to a subsidiary that they had just created called Raynet.
SM: The famous Raynet! JR: The Famous Raynet, and it is famous in the Bay Area because it lost more cash than any other startup, I think, in the history of the Bay Area. They burned, I don’t know, $200M in not too many years. It was a drain on the whole company, but Frank went over there.
Raynet was having trouble gaining success, and there were some of us around who were skeptical that it could ever possibly be successful. Not only was the technical basis flawed but the whole notion of a company outside of the telephone industry being able to walk in and compete with AT&T was a little… well, ambitious, I might say.
So, anyway, the drain of Raynet on the company … and just Frank’s experience with Raynet and my experience with Raychem were such that we met one day and talked. Well, Frank wanted to go off and start a company. Actually he and I had talked about starting a company previously in a different area. So, he came back again and said, “Hey, I would like to start a company in fiber optics. We worked a little bit together, and that is what I am doing now, but it would be totally different than Raynet, we’ll have to figure out exactly the areas we are going to work in, but I have a few ideas to get started.”
So, we talked about it, and he came back and said “I am committed, this environment at Raynet is not positive, they are not going in the right direction.” He had become disenchanted with the progress Raynet was making, and thought life would be more fun trying to build our own company.
Well, let’s talk about this. There is no business plan. There is no particular product focus, there are no customers. The only customers who were possible at the time were consulting customers, consulting in fiber optics.