High tech takes another hit
Published 9:00 pm Thursday, February 28, 2002
By Eric Fetters
Herald Writer
BOTHELL — Vectrad Networks Corp. has laid off nearly everyone but its management team, adding to the number of Canyon Park high-tech firms forced to make cuts over the past year.
The company, which had 32 employees before the Feb. 22 reductions, is down to six after failing to secure more financing.
But Vectrad is not shutting down, said Richard Shields, president and chief operating officer. He said those who are left will be courting customers and more financing and continuing to field test its products.
"We’re still a real, but very, very skinny company," he said.
Founded in early 2000 by entrepreneurs Frank Grenon and Vern Fotheringham, Vectrad has designed systems to provide businesses with high-speed Internet access over wireless networks.
That may be a good idea, but the timing is wrong. Shields refers to the current period as the "nuclear winter" for the telecommunications industry.
By shrinking its operations, Vectrad will be able to make its cash last for up to a year, he said. During its initial round of financing in September 2000, the company received millions from investors Optical Capital Group, Kinetic Ventures and Access Venture Partners.
Most of the employees let go were in engineering positions, Shields said. After a board of directors meeting on Thursday, Shields said the company may use a small number of contract engineers to keep its products up to date.
The bad news for Vectrad came only a month after the firm successfully tested its technology in St. Petersburg, Fla. Shields said the company’s systems can carry much more data than T-1 lines often relied on by businesses for high-volume data and voice transmission, but at a lower cost.
"We’re in the position where we’ve built a great product that the world does need. … It’s just the world isn’t there right now," he said.
Andrew Kreig, president of the trade group Wireless Communications Association, said it’s only a matter of time before companies begin using more fixed-based wireless systems such as those made by Vectrad.
"It’s unfortunate that, because of mega-trends throughout the telecommunications sector, this company is at least temporarily caught in the downdraft," Kreig said, adding that even big firms in the wireless industry have been affected.
Vectrad previously had focused on selling its systems to large telecommunications companies. Now, Shields said, the company will target smaller Internet service providers that want to offer wireless services in order to stay ahead of competitors.
You can call Herald Writer Eric Fetters at 425-339-3453
or send e-mail to fetters@heraldnet.com.
