Jason Cohenour, the President and CEO of Sierra Wireless, was on hand at the BCTIA‘s Techforum luncheon (held at the Sutton Place hotel in downtown Vancouver) to explain why his company is “Hell-Bent on Success”. Having weathered many economic storms on the way to the Vancouver-based company’s current prosperity.
Cohenour outlined the steps Sierra Wireless took to ensure success even when the economy varied wildly around them. He broke down the Sierra Wireless story begining with the company’s first product, the Pocket Plus, which was a do-it-all modem that was a technological marvel but sold precisely zero products. The company retooled the Pocket Plus into a mobile modem for police, which did sell and put the company back on track. The tech bubble, starting in 1998, meant the company could and did go for an IPO, because as Cohenour said “we could, because anybody could.”
The stock and valuation of the company fluctuated, and once the tech bubble burst Sierra Wireless lost customers, since some of their corporate customers ceased to exist. But Sierra was operating from a position of strength financially, so they weathered the storm and introduced the Aircard, still one of their biggest successes. They also made key alliances with big carriers in the States like Verizon, as well as selling modules to Palm.
The key lessons learned were to be first to market with key new technologies for big customers, always be in the M and A hunt for targets that improve position, and never forget who the boss is in the value chain. Sierra Wireless charged too much, Cohenour said, and lost Verizon as a customer, which he said would never happen again. When the customer responsible for 40 percent of your business asks for something, he said, there’s only one right answer.
Diversification is also important, he said, but it requires over-investment in both the new and the old business. And the most important lesson is to be “laser focused on execution in the core business.”
Sierra’s new plan is the “invasion of China, Inc”, and has opened a new R&D office in China to take advantage of innovation in Asia. Sierra has launched a new line of USB products and is now pursuing vertical market OEM.
Cohenour emphasized the importance of observing the ecosystem around you and responding properly, as well as timing cash raising in capital markets. Sierra was able to go to the capital markets “when they stll existed,” Cohenour joked, in October 2007 right before the economy took a sour turn.
Cohenour said the next step for wireless is machine to machine, as well as “unmanned” applications, such as teller machines, parking meters, all the way to machines monitoring oilhead drills. “You have to spend to get to these markets,” but once you’re there you can become the dominant player, he said.