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Turn Around Series: Jerry Rawls, Finisar (Part 14)

Posted on Wednesday, Mar 21st 2007

In the conclusion of the interview, I find it very interesting how Jerry was able to remain motivated and energized throughout the entire process, even after he had made (as Frank calls it) ridiculous amounts of money.

SM: That sounds like a great story, congratulations for being able to navigate your ship through all of these storms. I am sure you are tired! JR: Actually, I appreciate your kind words, but it has been interesting and there were parts of it that were very unpleasant. Overall it was a difficult problem and I am an engineer by training, so solving hard problems is fun for engineers.

So we have had to change our approach, but solving the problem and now achieving the success, that says we are now growing and profitable and we have set our goals higher, it has been a very satisfying process to me. I didn’t get tired during the period, I was invigorated by it, I am sure I had some frustrations along the way, but this was all about making long term changes. One of the challenges for me, frankly, was to make sure this is a very long term process.

It took five years to get all of this put together. There were clearly demands from a lot of people who said, “Tomorrow you have to lay off a lot of people. You have to lay off your engineering department, you have to quit spending operating expenses, and you have to get profitable next quarter”.

My reply was that this company would not be worth having, this is not a place anybody would want to work, and nobody would want to own our shares if we achieved profitability next quarter because we would have no company in three years. So, being able to convince people to stay the course, to convince our board of directors – it was a challenge.

In the end I was able to drag them along and convince them that yes, it was and yes, we are able to raise enough cash through convertible bond issues that we could support ourselves through the period, and we have now been generating cash for several quarters, with profitable operations, and now we have $130M cash in the bank. That part has worked out.

In terms of whether I am tired? No, I don’t feel tired at all; I am on to the next front which is, you know we now have a goal to improve our operating costs and our level of profitability and I think we can do that over the next year.

SM: Congratulations and best wishes for your next level of growth. Thank you for taking the time. JR: I have enjoyed it.

SM: And to conclude, just an little story. Jerry Rawls is 6ft 4in tall. And, he is worth several hundred million dollars. Yes, because he has made it a company policy that everybody travels Economy, Jerry himself also travels economy. This may not be something you appreciate the significance of, but if you are a very tall man, and you have to travel economy for a 14-16 hour flight to Malayasia, Singapore or Shanghai, it is really unpleasant. It’s just that, Jerry is trying to walk the talk.

[Part 14]
[Part 13]
[Part 12]
[Part 11]
[Part 10]
[Part 9]
[Part 8]
[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 14 in the series : Turn Around Series: Jerry Rawls, Finisar
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Good color on the economy travel. I imagine that Jerry, if he chose to do so, could fly around the world on a Gulfstream just as the CEO of AMCC did during the bubble.

People who would be unwilling to pay for a $5000 business class ticket themselves shouldn’t expect others to do it for him. Two words of wisdom for Mr. Rawls that he probably already knows… Economy Plus.

Andrew Schmitt Wednesday, March 21, 2007 at 12:00 PM PT

if the guy is so incredibly smart how come finisar will never see $100/share.

I think people are easily swayed by him. He’s a smooth talker, which helps in the business world.

FNSR has seen mergers, incredible income reports, and great reviews from all sorts of analysts…why?? Because Jerry Rawls is the president who doesnt know jack about communcations today.

The company has a planned merger coming up with Optium. The Stock currently sits at $1.29/share, WTF!

Jerry Rawls can’t run a company! That is SOLID FACT.

HE CAN be a part of a company with no serious control, but not president or chairman of the board. As soon as someone stops making choices for him or telling him what to do shit flops on him.

He was garnered a successful man immaturely and for the record I will never go to a school where they have a course named after him.

John Doe Thursday, July 10, 2008 at 10:50 AM PT

stock was at $50+

John Doe Thursday, July 10, 2008 at 10:52 AM PT

John Doe,

I find your comments distasteful.

Nonetheless, I chose not to remove your comment, but refute.

I don’t know many CEOs who would stick through the long process of rebuilding a company AFTER they have made boatloads of money. I don’t know how many companies you have built, or whether you have any understanding of what startups, entrepreneurship, building companies, turnarounds, etc. are made of.

In your comments, you display an abysmally low understanding of those aspects, and consequently, a lack of respect for a man who deserves a great deal more respect than what you offer him.

You should go check out the history of the optical networking components market. Very few companies have urvived. Cisco drives the industry like a non-profit. This industry has a lot of the same disease that I have written about in the EDA business.

What you are seeing happen is a much necessary consolidation of the industry’s major players.

And you are right, Finisar’s stock price won’t go to $100 anytime soon. But that’s not because Jerry Rawls doesn’t know how to run a company. It’s primarily because of the business model issues plaguing the optical components industry.

Of course, Jerry Rawls could decide to enter some other sector that has high growth, like, for example, what Cypress did by incubating SunPower. Or EMC did by buying VMWare.

But overall, I think what he has done with Finisar – in helping it survive the optical market crash, the telecom meltdown, etc. deserves credit.

Huge credit.

And credit that you don’t seem to offer him.

I would like to see you running a company!

Sramana Mitra Thursday, July 10, 2008 at 8:05 PM PT

“Telecommunications Meltdown”??

This statement pretty much sealed the deal and did it for me.

You cannot be serious.

I refuse to comment further.

John Doe Saturday, July 12, 2008 at 11:18 PM PT

Thank god!

Sramana Mitra Sunday, July 13, 2008 at 11:23 AM PT