SpectrAlliance started because I listened to customers. And it is succeeding for the same reason. SpectrAlliance was bootstrapped by quickly developing and implementing process control instruments designed to meet customer performance specification.
In less than a decade, SpectrAlliance has become a leader in manufacturing process control using spectroscopic analytical technology for the pharmaceutical manufacturing industry. SpectrAlliance's products include spectrometer systems spanning the ultraviolet through infrared and feature software for real-time process measurements and multivariate analysis.
For quick background, spectroscopy is the study of light, both visible and invisible wavelengths, and how it interacts with matter. Without actually touching planetary bodies, for example, scientists can learn what they are made of by analyzing light reflected from the planet's surface. Or a manufacturer can pass light through liquid to remotely determine the liquid's composition using one of the fiber optic insertion probes my company makes.
My interest in spectroscopy goes back many years, including R&D work in the 1980's on submarine laser communications at McDonnell Douglas Research Laboratories in St. Louis.
My concern about customers developed from spectroscopic instrumentation work I did through Blue Willow Scientific, the consulting company I started in 1990. Most of Blue Willow's work was behind-the-scenes original equipment design and manufacturing for rebranding by other companies. Customers, however, had many questions about the products we made, revealing a need for more contact with end users. I also wanted to be a frontline participant in what I could see was a bigger market with high-growth potential.
Evolving to Meet Customer Needs
With a partner I eventually bought out, I decided to commercialize the probes we had already designed and were selling on a small scale.
Revenue from those sales, as well as personal funds and a modest loan, enabled us to incorporate SpectrAlliance in 1998 and unveil our product at a trade show the following spring.
The probes we developed are used by large pharmaceutical companies to comply with U.S. Food and Drug Administration (FDA) regulations for cleaning stainless steel vessels up to three stories tall used in manufacturing drugs. The cleaning process involves re-circulating water through these vessels. To determine when vessels are clean, factory floor staff would collect a sample of the circulating liquid, take it to a lab for analysis, and wait up to several hours for results. With our fiber optics right next to the vessels, factory personnel can make those determinations in real time.
Bootstrapping our company from this single application of our product got a big assist from an early adopter of the probe. This customer saw the advantages of using online measurement to control their manufacturing process and then asked us if we could develop a spectroscopy system for use on the factory floor to go with the probe.
In other words, could we develop a system that monitors materials moving through a pipe and provides instantaneous feedback so changes can be made in the manufacturing or cleaning process?
We had never done it, but we said yes. We also wrote the software to control this sophisticated instrumentation in a fashion appropriate for the production environment.
Customers came back saying, "I'm using your instruments with this software and really like the software. Can you make it run this other instrument?" Of course, we said sure. Now our software can control instruments made by competitors, whose salespeople in effect sell our software to run their instruments. Consequently, software sales now represent about half our revenues.
Sales Revenue Feeds Growth
Like many entrepreneurs, we also had at least one lucky break. In 2001, the FDA issued regulations allowing pharmaceutical manufacturers to install diagnostic analytical instrumentation for quality assurance at various points in the manufacturing process without prior FDA approval. These rules not only increased awareness of our products but removed some regulatory hurdles our customers would have faced in implementing this type of technology.
If ten years ago we had conducted a market study asking senior managers whether they could use an instrument that measures how much product is left in their rinse solution, they wouldn't have known what we were talking about. Nothing like that existed at that time. To succeed, we needed to introduce the product and sustain close interaction with end users familiar with day-to-day production issues.
I have to say, with five people, including me, on our staff, we haven't done a great job marketing in the traditional sense. Instead, we've focused on building partnerships with customers.
Our products evolve from what they want. Customers try one or two of our products, see how they work, and generally come back for more to fill their factories.
Ultimately, I suspect we'll develop a more sophisticated marketing strategy. For now, sales revenue feeds growth with high potential for continued rapid market penetration.
© 2007 Ewing Marion Kauffman Foundation. All rights reserved.
Susan L. Bragg President SpectrAlliance, Inc.