Model evolution

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André Richter, CEO of VPIphotonics, talks through his 20-plus years at the company with EPIC’s Carlos Lee

Carlos: How long have you been with VPIphotonics and why did you decide to join?

I started as an applications engineer in 1997, just after graduating from university. So I’ve been with VPI for more than 20 years. The freedom and opportunity of being part of starting up a company appealed to me more than working in a large corporation.

Just before the big telecom bubble, we conquered the world out of our small office in Berlin. The internet boom opened so many opportunities to grow and try out new ideas, which was great for a small company like us being in the right place at the right time. We got some early funding, and hired all the high-tech people we could find, including a very clever marketing person who really made sure the money was flowing and the branding was done the right way. This was not the time for keeping the money in the bank, so we spent it!

Then, of course, in early 2001 the market crashed, the internet bubble burst – from one quarter to the next, it just all stopped. The whole business just fell to zero. And within six months, the company had to make hard cuts and take tough decisions. That’s an experience – I saw first-hand how things do not always turn out the way you want or plan.

Carlos: How did the company evolve 
in the early years?

The company’s roots go back to 1996, when BNeD started as a spin-off from the Fraunhofer Heinrich Hertz Institute (HHI). After receiving some early VC funding, we merged with another company called Virtual Photonics in Australia and acquired a business unit for network planning from Siemens. We established VPIsystems, a globally operating corporation with offices in the US, Germany, Australia and Singapore addressing the photonics simulation and network planning needs of the telecommunications industry.

Carlos: Before the crash in 2001, 
how many employees did you have?

I joined in 1997 as employee number five. In three years we grew to 120 employees, and then from 120 to about 250 in just one year. A COO was hired, with the aim to grow the company to 1,000-plus employees.

The telecommunications market simply exploded at one stage, and companies in the field of optical communications and photonics had problems in finding any adequate resources. We revolutionised the market of software-enabled transmission systems design and optical network planning. So our software trainings were in high demand. I was running a team of 10 optical engineers and instructors back then. We organised design courses with 10 to 30 attendees every week in different places in the world. Sometimes we got mechanical engineers and astrophysicists aiming to become optical engineers, just by attending our three-day courses! They were really crazy times.

Carlos: What effect did the 2001 telecoms crash have on the staff, and how did the company evolve?

Within a quarter, a third of our 250 employees had to be laid off. I felt glad not to be in charge at the time and make those hard decisions. The following years were tough. But like other companies that made it through those years: we focused on our strengths, and constantly adapted to the changing market needs. Eventually, by the end of 2012, VPIsystems spun off its photonics business unit VPIphotonics, which I was running at that time already for several years. A new era for our team started.

Carlos: How did VPIphotonics deal with the transition, and how did you see your role change over the years?

Well, of course, in the beginning you go through a lot of changes. You step out of the technical world and take over more overall responsibilities of cost and income, branding and strategy, people management and legal. But I was lucky to be put in many positions over the years before becoming CEO. So, I went from writing code and organising training sessions, through product line and R&D management, to running the company. I am still grateful to my mentors, who believed in me and offered me these opportunities to grow.

In my opinion, problems happen when people in management positions exercise too much power without properly communicating. I regard listening and understanding as being more important than speaking up. You cannot push people to get authority; you just get it by the way you do things and by being a positive example. You can’t expect your people to work hard without giving them reason and explaining decisions. Dedication and motivation comes from believing and trusting in yourself and the company.

We have always been very multi-cultural, which gave me the chance to learn how to communicate and appreciate people properly. If you look at our office in Berlin, we currently have people from Greece, Portugal, Italy, Poland, Syria and Columbia. We also have a team in Belarus and the US, and I travel a lot to China, Japan, and other countries to meet customers and partners. 
I consider this very rewarding, to experience and understand the different cultures, and make friends all over the world.

Carlos: What is your focus in terms 
of innovation?

Our software is used in the R&D departments of highly innovative companies that develop new components and technologies. They want to use our software to find out, for example, what will happen if they manage to adapt a certain design-critical parameter – will they get an advantage that helps position their products better in the market? 

We don’t always know what the customers intend to do with our software. In the end, you need to have libraries of building blocks emulating all the required optical, electrical and supplementary functions that are needed to form the technology, circuit, subsystem or complete transmission system of interest. The software must work, must give you a proper physical result without failing. 

Our customers expect that the latest technologies and design ideas are supported by our software. So, thinking ahead is important. What we are selling in the end is convenience put into a software tool.
You can work with the software and investigate the differences between alternative technologies for the various applications, without needing to set it all up in a lab and try out there.

Carlos: What do you see for the company in the next 10 years? 

We’ll provide similar simulation tools compared to what we already have and develop new ones – it all depends on what the market dictates. At the moment, we have tools to simulate the characteristics of optical devices, fibre-optics and integrated photonics applications, and optical transmission systems. This already covers a wide range – depending on what will be needed, we might go deeper into device modelling, and further up to link engineering and network planning. 

However, a large company might also become interested in us, so this is always a possibility. I wouldn’t say that the main goal of the company is to be sold, as there is no added value to this. If you really want to continue what you are doing, if you like the work and people around you, make sure that the company evolves without risking it all. If we’re still around in 10 years and operating as a healthy company, then that’s good. If we become part of a larger entity, where we can continue our story then that’s also OK.

Carlos: What are your challenges ahead in the next five years?

We see that optics and electronics technologies, together with advanced information coding and digital signal processing techniques, need to be integrated much more tightly to create new systems. And that a smaller team of engineers needs to understand all of these aspects individually and their various interactions. 

In transmission systems, for instance, the performance limits of individual components are more often reached. So they affect the overall system performance more often, triggering the development of smart new technologies and design ideas to overcome these limitations. At the end, the whole system becomes more complicated, and less predictable by an individual engineer with a limited field of expertise. We see already that some design engineers, while being great in coding and DSP, take important aspects of the fibre part for granted, leading to ill-designed solutions. This development is a challenge but this is where we can grow with our software-enabled design solutions. As long as people invest in new technologies, we have a market.

Carlos: Do you enjoy what you do? 

Yes I do. Life is too short to waste it. If you spend eight to 10 hours a day on something, it better be on what you enjoy. Photonics offers so many solutions and promising potentials, but is very full of challenges. Even after being in this industry for more than 20 years, it is still fun to explore new things!