Firebird Q & A

...an edited interview with Bill Micklethwaite, Chairman of the Board, Firebird Technologies Inc.

1. What were you doing before you started this company?

I was one of three program managers at the Electronic Materials division of Cominco here at Trail. I had between 35 or 40 people working for me, producing indium antimonide and several other compound semi conductors. My education is in engineering physics with a specialty in materials, and I had been working in the electronic materials field for over 20 years.

2. When did you start Firebird and why?

The Cominco Electronic Materials division was sold to Johnson Matthey Electronics who subsequently closed the Trail plant in the fall of 1990. The technology would be lost and about 125 very skilled people would lose their jobs, including me. After about six months, it suddenly occurred to me that this could be an opportunity. Expert people were available; I knew the business and the science; it's a knowledge business with no big materials handling issues and a high value product; and several customers indicated they were willing to buy from us, indeed were willing to support us financially to establish the company. Firebird began in 1991.

3. Was it hard changing from an employee in a big company to a small business entrepreneur?

At university I decided I'd rather work for a big outfit with a pension, which worked fine for the first 24 years, then that job went up in smoke. Here I am 15 years later being an entrepreneur trying hard to retire!

Actually, Electronic Materials was different from the rest of the Cominco in that we operated as a number of small organizations, and the program managers had to be entrepreneurial. We were combination scientists and business people under the Cominco umbrella, dealing directly with customers on science and management issues, so that was a really good education for starting a business.

4. What's the present status of the enterprise?

We started with 3 employees. It took us five years to get to five and now we are at 16. We've grown from a business doing a few 100,000 dollars a year to a business doing a several million dollars a year. There is definitely a transition point from a small business with a few employees to a bigger business that requires more time and resources to manage.

5. Were you a competitor of Johnson Matthey?

Absolutely. In fact JM were ready to get out of the indium antimonide business and we came close to buying their Spokane operation to consolidate with Trail; but there was an employee buy out, forming a new company that continues to be a competitor. We have one other competitor, a larger firm in Britain.

6. Who are you customers?

The military is at the leading edge of development on a lot of semiconductor materials. They have the money and the need to have the very latest and the very best. Infrared is also used in security sensing and in medical applications, also in search and rescue. Indium antimonide is among the most sensitive of the infrared sensing devices, so can be used over a great distance.

7. Can you describe what it is you do?

We refine the individual metals - indium and antimony - to high purity, then blend them and purify them again. The purified semiconductor material goes into a crystal grower where that raw material is converted into a single crystal, with all the atoms lined up just like in a diamond. This crystal looks like a shiny stalagmite that is then carefully cut into wafers half a millimeter thick, machined to size and polished for a smooth, flat surface. One four-inch diameter indium antimonide wafer about the size of a CD sells for about $2,000 US.

8. What is the benefit of going from three inches to four?

Going from 2 inch diameter to 3 inch took $500,000 of research and development. Going from 3 inch to 4 inch has taken several million dollars more. We were the first in the world with both the 3 inch and 4 inch. The benefit is that more electronic devices can be fitted on to the larger surface area, and as those devices get larger that is even more important for greater productivity and reduced cost.

9. Are you are working on other products?

Gallium antimonide is a cousin of indium antimonide and has thermo-photovoltaic properties - converts heat energy into electricity. It's not off the ground yet but we are watching the technology so we can respond quickly when there is a demand.

We are also looking at semi-conductor germanium. Tech Cominco extracts ~40% of the world's new germanium in Trail. That's a huge geographic benefit for us, and there is synergy in being able to recycle purification by-products back to the smelter. This has the potential of doubling or tripling the size of Firebird, but there are significant costs and other issues inherent in developing this new business. The product would be germanium lenses used in infrared cameras and instruments; unlike glass, germanium is transparent to infrared.

10. What support and assistance did you get when you began?

Customer support was the key. We had a market. We also had enough money to begin without being hugely in debt. The other support was the building. It was established by Trail Community Futures as a business incubator two or three years prior to Firebird coming along. There was no other suitable space in the whole of the Kootenays. As we grew and needed more space we took over space vacated by other incubatorees moving on. Eventually Community Futures, very considerately, chose to relocate, since it was easier for them to move to new offices than for us to relocate all of our equipment.

11. Did the government support you directly?

Western Diversification provided our initial supplementary financing, with more loans from banks and Community Futures along the way since. We had a couple of projects with Industrial Research Assistant Program (IRAP), that's an Ottawa program that funds labour only. Technology Partnerships Canada provided a large loan to help us with our 4-inch R&D; and the BC Research Council has helped finance several of our earlier projects. This was mainly debt financing, repayable of course, and was used to supplement our own finances generated internally by the company. We have avoided the kind of deep bank financing that can lead to working to keep the bank happy rather than the customers.

12. Were there any obstacles or challenges that got in the way?

Finding money has been a challenge. Government does help with the R&D side, but funding for the implementation stage of taking a product to market is more difficult to find. Another challenge is power supply. A reliable and steady power supply is critical for our processes; we cannot afford any bumps. Reliability has been an issue lately and we are trying very hard to find a way around it.

13. How do you manage so many smart people all working together?

There is no such thing as too much brain power. A business like this has to make sure the ideas keep flowing and nobody feels their ideas have been discounted, because there is no such thing as a bad idea. Sometimes an off-the-wall idea might not work but it triggers four more, one of which does work. This is a knowledge business that thrives on good people, people who have the core skills and, most importantly, who cooperate and are anxious to do a good job. It's all about people and their mind set, and we have an absolutely great bunch of people.

14. Do you think the community has benefited from your enterprise?

As a company we don't interact much with the community. Our products are sold almost exclusively to the U.S. or overseas. We sell to the U.S. and Europe, to China to Korea to Taiwan to South Africa, New Zealand, and Australia. But we provide good, highly skilled jobs, and, I think, add something to the reputation of the community with our world-class high value-added products.

15. Would you encourage others to be entrepreneurs?

Yes, it can be rewarding, though it certainly helps to work for someone else for a while to learn the ropes on how business works. In a small business you need to understand how people interact, how money works, and be capable of keeping good books. People running small businesses must understand accounting and where money is moving. Our current operating philosophy is to have three months wages and operating funds in the kitty at any given time against a drought. If we have production problems, a fire, equipment problems, or a customer not ordering for a while; you need a cushion to carry you through. Living hand to mouth will kill you.

16. What changes do you think are needed to encourage more entrepreneurs in this area?

There are a lot of highly qualified retired people in this area who miss the mind stimulation they gained from work. We don't have any vehicle that allows that knowledge to be leveraged. We need a club of some kind that would bring entrepreneurs, mentors and potential investors together, with guest speakers, and perhaps cooperative projects to stimulate, inspire and assist new entrepreneurs.