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Lessons for CleanTech Entrepreneurs: Raychem CEO Paul Cook (Part 4)

Posted on Monday, Aug 13th 2007

Now that we have a bit of background about Raychem’s history, we can begin the conversation with Paul on the philosophy and mechanics of building the company, and what we can learn from it.

SM: To get started, I would like to ask you to share some thoughts about your philosophy, and perhaps give some examples from the Raychem story. PC: You heard my talk at the Raychem 50th Anniversary. The main principles that I believe in as one way to succeed in business are as follows: First pick a technology niche that you can be the leader of, that others haven’t done before and that you can master. Then develop products based on that technology that will enable high prices relative to cost yielding a good gross profit. This will then allow you to continue to spend on additional product development as well as investing in sales and marketing necessary for new innovative products.

SM: How do you determine applications and products when you are working with a core technology? In the valley I see people who are technologist who cannot think through the application. They come up with solutions and then go looking for the problems. PC: You have to have a market pull. There has to be a market out there that wants your product.

You sent me the story of the desalinization company that took 21 years to succeed. They took that long to solve the technical problem and through remarkable tenacity finally found an economic solution. The market pull was always there but they didn’t have a technical solution.

When I started Raychem, and we went into radiation chemistry, something I worked on here at, I selected as the first products wire and cable for aircrafts. By reducing the weight of wire it would reduce the weight of the airplane, which was worth something like $1,000 per pound saved for each airplane. If we could cut the weight of a cable by 3 lbs per 1,000 feet, and there were 50,000 feet in an airplane, that is a 150 lb saving and that was worth to them $150,000 per plane. That is a huge amount of money. That meant the price we could charge for the product was high because it was so valuable to them.

(to be continued )

[Part 1]
[Part 2]
[Part 3]

This segment is part 4 in the series : Lessons for CleanTech Entrepreneurs: Raychem CEO Paul Cook
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a bay area native and x qc employee of raychem this story inspired me in the 80 s and continue to inspire me today.

ronald k royal Thursday, October 28, 2010 at 4:27 PM PT