Interview
Zyvex Revisited: Achieving Success in Nanotechnology

It’s been almost two years (July 2003) since we last interviewed Tom Cellucci, president of Zyvex, and nanotechnology is still hot. One of the most publicized – and profitable – nanotechnology businesses in the world, Zyvex markets commercially viable nanomaterial composites as well as atomically precise manufacturing tools. And as if that's not enough, Zyvex has become an enabler for this nascent industry as well as a leader in standards development. Join us as we check in on Zyvex.

Tom, in the early days, Zyvex seemed more focused on molecular manufacturing of raw nanotubes. What happened?

We made a strategic decision not to produce nanotubes but to process them. This has proven to be a prudent and wise decision on the part of our team. The real value is not in the raw starting materials but in processing them into a variety of nanocomposites. We’ve put all of our technical, business, and marketing efforts into the processing of nanotubes.

Tell us about your application sales engineering (ASE) strategy. What’s changed in your approach?

There’s an evolution going on to help us become more market driven – which doesn’t happen overnight. Our ASEs always have understood our products and core competencies, but this group is transitioning to be much more market focused. They’re becoming more like product managers, directed to specific target markets. This is enabling us to move from a product-push to market-pull strategy. We’re developing a total marketing tool bag. We look at the applications the market needs and bring our capabilities into play to help them.

A lot of nanotechnology talk is still “pie in the sky” and a far cry from commercial production. But Zyvex always has understood the realities of commercialization. Is your approach, then, redefining and driving the nanotechnology field?

Yes, I think so. I was always concerned that nanotechnology was over-hyped – even today, while my presentation materials have advanced, the title has not. It’s still “Nanotechnology Without the Hype.” And because of our commercial success, we are used as an example of how companies can use technology successfully.

I often get asked the question “What is the difference between a winning and a losing high-tech company?” More often than not, unsuccessful companies have a solution looking for a problem. You have to do the reverse. You have to talk with customers, find out their unsatisfied needs, and determine the utility of your core competencies. Then you have to make it easy for customers to understand the product, how to use it, and how to buy it. At the end of the day, our customers don’t care about the technology; they only care about our ability to improve their business and products. The technology is secondary. Successful commercialization recognizes this.

With the supplier program, Zyvex seems to be the self-appointed standards bearer for the industry. How is this working? Is the industry supporting this?

Zyvex is close to controlling a vertical market – base materials, manufacturing tools, standards, and commercialization partnering. You’ve become an industry enabler. Was this the original vision?

It’s not surprising to think of us as an enabler of the industry. The idea of being a conduit always would happen in the early days – these markets are broad and I think the potential value of Zyvex in the long term is that we are building a market-focused company from which other companies could emerge and spin off. We can be the engine for technological capabilities.

A lot of people have us on their radar screens because they envision us as an IPO candidate. But we are deliberate – we won’t rush into an IPO. We are striving to make the best additives and concentrates possible. We see how our products can be used across industries and by all competitors – a strategy similar to Intel.

We want to have the next big thing ready before it’s the next big thing. If we can exploit an opportunity in this way, we’ll be ahead of the curve as the proven leader.

Through the partner program, you help small companies who commercialize their products or license their technologies. Has this been successful?

No, it’s been a disappointment. We believe growth comes from both internal and external sources – a factor like time-to-market is a key factor in using external resources. There’s a lot of fluff and hype that make it difficult to determine core competencies. We don’t want to be reactive to merger and acquisition opportunities, but there needs to be a strategic fit. We want to identify the need, match products, and goals, and pursue those opportunities that make sense. It just hasn’t been easy: the lack of commercialization in nanotechnology has made the options limited for now.

What’s been the key to Zyvex’s success so far?

We are proud of our employees in making the transition from a technology push to a market-driven company. We appreciate how well they understand the applications and markets we work in. It’s through that intimate knowledge of our customers that we have had our successes. But performance is an equation – strategy times implementation. Without the discipline of getting things done – execution – plans mean nothing. Our employees make our plans living documents as they execute to them.

The outside world has seen the disciplined execution of our business and marketing plans. On a routine basis, we look at our roadmaps and update them, and go back to our roots and founding vision to generate products that are atomically precise.

We’ve also put in new processes – we walk the talk. Our five-stage New Product Development (NPD) process is a cornerstone in walking the talk. And we wouldn’t be where we are today without the strategic partnerships we’ve developed with many companies. We’ve leveraged the synergistic effectiveness of our partners and penetrated various new markets with them.

What’s ahead for Zyvex – and the industry?

I fully expect Zyvex to continue its rapid growth and not abandon its vision of building adaptable, atomically precise manufacturing tools. This will enable a whole new set of products and processes that will improve the quality of life as we know it. I expect greater things to happen.

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Tom Cellucci is Zyvex’s president and COO. A member of Zyvex’s Board of Directors, he joined Zyvex in July 2002.

Cellucci is also the founder, president & CEO of Cellucci Associates, Inc. (Wellesley, Massachusetts), a highly successful international high-technology management consulting firm. He possesses extensive experience in managing and leading hi-tech companies, having served in a variety of senior executive and director positions. Cellucci is the author or co-author of over 118 articles on nanotechnology, laser spectroscopy, environmental disturbance control, MEMS test and measurement, and high-tech sales and marketing.

Cellucci holds a Ph.D. in Physical Chemistry from the University of Pennsylvania, an MBA from Rutgers University, and a B.S. in Chemistry from Fordham University. He has also attended several executive courses at the Kellogg School of Management, The Wharton School of the University of Pennsylvania, MIT’s Sloan School of Management, and the Harvard Business School, where he is often invited to speak on nanotechnology.

Zyvex Corporation, based in Richardson, Texas, is the first molecular nanotechnology company. Zyvex’s vision is to become the leading worldwide supplier of tools, products, and services that enable adaptable, affordable, and molecularly precise manufacturing.

April 2005