Richard Kemple Title: Chief Executive Officer Company: Nomadix Age: 49 Education: Bachelor’s degree in business administration and marketing from Southern Illinois University Personal: Married to Mindy, one son and one daughter Most Admired Person: (Hewlett Packard Chairman) Carly Fiorina NOMADIX’S NEW CEO BRINGS MARKETING AND SALES SKILLS TO A COMPANY WHOSE STRONG SUIT HAS BEEN ENGINEERING SINCE ITS INCEPTION THREE YEARS AGO Richard Kemple brims with enthusiasm as he talks about his newly adopted company, Nomadix. A self-described salesman, he has dumbed down what is a highly complex technology in the way that executives who frequently approach the investment community, hat in hand, are wont to do. “What you expect is what you get,” he says, referring to the crux of Nomadix’s product, the Universal Subscriber Gateway that essentially enables users to plug into high speed Internet access anywhere anytime. “Plug and play” has become a commonplace feature for many devices in the computer age, but it has so far eluded the high-speed Internet sector. Right now, most laptop users who want to log onto the Internet at DSL speed from a hotel, meeting room or other off-site location need enough technological savvy to reconfigure their laptops for the particular network that services the locale, making Nomadix’s gateway an especially nifty feature. But for all its engineering talent, Nomadix has been light on marketing muscle. Since it was founded in 1998 by Richard Kleinrock, one of the real inventors of the Internet, the company’s sales and marketing has been fragmented and its focus has been too narrow to make the cost of the technology pay off. Privately held Nomadix won’t divulge financial data. Its employee ranks have grown from 7 in 1998 to 70 today. Product shipments this year are serving 500,000 broadband subscribers, up from several thousand in 1999. And it expects to service 5 million subscribers by the end of next year. Last year Nomadix raised $17 million in funding, but it will need another round of financing to compete effectively in a market where competitors, including $40 million Elastic Networks Inc., a Nortel spin-off, and $280 million Redback Networks, are publicly held and far larger. Kemple, who became Nomadix’s chief executive officer a month ago, brings with him more than 20 years’ experience at marketing technology, including stints at Xerox and US West. He has already restructured the company’s business plan and redirected its marketing efforts to target broadband networks. Question: What exactly does Nomadix do? Answer: (Holding up a phone) This happens to be an AT & T; cell phone I bought in Atlanta, registered in Denver and use in California. What I expect is that if I have a signal and I dial in this phone number, my wife answers the phone. What I get is what I expect. If I plug something into that electrical outlet, what I expect is what I get. The Internet jack, when you plug into that, you don’t know what you’re going to get. You don’t know if you’re going to get in, if you’re going to get on. We have solved that problem. We provide this gateway where you can get access, anywhere anytime anybody, and we’re network-agnostic so we don’t care if it’s wireless, cable or wired. We don’t care what the device is, it could be your PDA (personal digital assistant), your TV, your cell phone. So you have access to your stuff, easy. Q: Who do you sell to? A: We’re shipping product domestically and internationally, and it’s a who’s who: carriers, NTT (Nippon Telegraph and Telephone Corp.) in Japan, we have installations at Cox (Communications Inc.), at ATT Broadband. We sell into equipment manufacturers and we license software. Q: Why are you confident that broadband carriers will be interested in this gateway? A: In 1985 there was one network, AT & T.; Then it got deregulated and now the network has been commoditized. Bandwidth will be free. It will just be so cheap. So all these companies are tanking because the value proposition of the network itself is very hard to monetize. Because you can’t get to the application, a lot of these companies are tanking. We understand the pain and the problems associated with the Internet, and we solve the pain and problems. Q: So how large a market are we talking about? A: Just write in there, “He laughed, because he doesn’t know.” The market is literally undefined. This is one of these early-stage opportunities. Q: In what ways have you changed the company’s business model? A: This company was typically engineering. They were very focused along that line, and there wasn’t real good sales and marketing execution. That’s what I was brought in to do. We have set very specific product milestones and goals that are achievable based on where we are in the product development cycle. We are tracking against those milestones and leading those on a daily basis. Q: How do you change what is essentially an engineering culture to respond to the business and marketing needs the company now faces? A: I had a lot of one-on-one meetings. We’re breaking down the silos in the organization, the boundaries that might sit between R & D;, engineering, sales and marketing. There are walls that have been built around those silos of information. If you tear those walls down and share with the engineers what the sales and marketing strategy is and get them excited about that, then they will come up with new technical hooks to give us better market position. If a CEO can make 16 decisions a day and if you push decision-making authority down in the organization, then the multiple becomes how many people you have in your organization times 16. That’s how many business decisions can be made in a day. All of a sudden your time to market can become much faster. Your engineering development lines can become much faster. Your cost of goods sold can decrease. Your market share can increase. Q: What’s the challenge been as far as financing is concerned? A: We’re raising money right now. We’ve built a fully funded model so we understand how much money we need to go to profitability. The market is in the tank, so we’re seeing considerable interest (because we have fewer competitors). There are a lot of business plans out there that have no value. Money is tighter, but if an investor understands our value proposition and what we do, this is an exciting place. If you don’t understand it, we go to the next (investor). Q: How much money do you hope to raise in this round? A: I don’t know. We have not set a number. It depends on the market. I know what the fully funded model is. If the valuations come out right, we’ll push to the fully funded model. Our current investors have committed that they will fund us. We feel very comfortable. Q: What is it about this career that keeps you interested? A: Years ago the Catholic Church did a study to figure out what personalities made a good priest. There were some side things that came out of that. The personality that salespeople had that made good sales people was resilience, the ability to go at it again after significant rejection. When you get really good at it, having the pressure put on is an opportunity. You become kind of an opportunity junkie.
