When Larry Kaplan and co-workers Don Craig, Ed Hobson and Mike Gilbert decided to leave Sony and launch server manufacturer Omneon Video in 1998, they knew it would be a hard slog getting from nice idea to nice revenues. Five years later, the company has not only climbed out of the muck of zero revenues but is so busy that Executive Chairman Kaplan logged 40,000 miles in November flying to current and potential customers.
"It took a year longer to get going than we thought it would, and we didn't have revenues until the middle of 2001," says Kaplan. "But, in the middle of 2002, business began to take off, and 2003 has been great."
Helping drive that success was a deal calling for the use of Omneon servers at PBS headquarters and, eventually, PBS member stations. Company philosophy from day one was to emphasize making video servers part of a facility's IT infrastructure as opposed to the broadcast-video infrastructure. That's a major reason the PBS contract was won.
"No [traditional video manufacturers] were even thinking about IT when we launched, and we were kind of shocked," says Kaplan. "As you solve the technical and business problems related to file-based audio/video servers, it breaks this industry wide open in terms of lower-cost equipment. Different types of workflow become dramatically better."
Kaplan says his philosophy to business is simple: "It sounds corny, but it's a fanatical devotion to the customer. As a small private company, the area we're vulnerable is how we will support our larger customers."
As a result, Omneon has grown in five years to a company with 65 employees, the majority of whom are involved with support. And Kaplan often finds himself in the support role, because it's still all-hands-on-deck when it comes to service.
Kaplan got into the TV business through a lucky break in college. During his freshman year, his roommate's father was the NABET shop steward at ABC headquarters in New York. That summer, Kaplan had an internship at ABC, an internship he held for the following three summers as well.
"I loved the industry because I could personally relate to it and I could discuss it with others because everyone watches TV," he says. "It's a fun and exciting business, and there's a melding of the creative and technical that I find interesting and fun."
After graduation, he moved on to Tektronix, spending five years in New Jersey. After completing an MBA from Rutgers University, he moved to Beaverton, Ore., where Tektronix headquarters is located. There he was promoted to general manager of the Tektronix Test and Measurement division, becoming the youngest GM in Tektronix history. Within a couple of years, the division, with the help of products like the VM700 automated test set, became the corporation's most profitable entity. The foundation for Omneon was also laid during that period because it was there that Kaplan met Craig, an eventual Omneon co-founder who designed the VM700 and Tektronix Profile video server.
"The Omneon server is the next generation beyond Profile, which applies disk-based storage to broadcast applications," Kaplan explains. "Omneon applies network storage to broadcast applications."
In 1985, Kaplan joined Sony to run the Sony Broadcast business, in charge of professional audio/video products, including cameras, switchers, VTRs. In 1997, he and his Omneon co-founders began to develop the plan for their startup.
"We knew it would be hard as the industry was cautious, but we also knew it would eventually be a winning proposition." With PBS in one back pocket and other big deals on the horizon, it appears that they were right.