MRF: One of iTerra's key strengths appears to be expertise in microwave, digital, and optical technologies, and the ability integrate them. Was this your intention from the beginning?

Walters: It was the combination that we wanted to have as early as possible, and it took us less than a year to achieve it, essentially by merging the expertise of three separate organizations with different core competencies into one cohesive unit to create more complete component solutions. We wanted to start with the best and this was where the talent was located.

MRF: At first glance, it might appear that iTerra is concentrated on optical communications.

Walters: You have to look a little closer. We have always addressed the optical-communications market from an electronics rather than optical perspective. We felt there was value in integrating the driver amplifier, which is a microwave or millimeter-wave circuit, along with some of the high-speed digital components that are required just before the driver, such as multiplexing and encoding. It's turning out to be really valuable in markets such as instruments, military applications, and even embedded systems. While our very first products were tailored to the optical-communications market, we've expanded into other areas, including microwave products such as microwave amplifiers in die and packaged form with high power over very broad bandwidths like 10 MHz to 22 GHz.

MRF: You formed iTerra when electronics markets were weak and tumbling, yet you have not just survived but have grown. To what do you attribute your success?

Walters: If you have confidence that the markets you have chosen to serve are likely to rebound within a reasonable time, you can use the interim period to establish customer relationships and optimize product development. You can also find more highly-qualified people, buy instruments and other equipment at very reasonable prices, and lease facilities at lower cost. However, you must be able to survive through this interim period. If you can, you'll often be very well positioned to address opportunities ahead of others in the market, which is where we believe iTerra is today.

MRF: Might it be said that survival is often dependent on the willingness of the people or organizations providing the company's funding to tolerate an extended period before they see a meaningful return on their investment?

Walters: We are extremely fortunate in this regard, because the individuals responsible for funding iTerra are very unusual in the way they view their investments. Their longer-term investment strategy makes them unique (www.stellartllc.com) compared to more typical VC based "public" investment dollars that require quicker ROIs and by definition puts people in second place. The payoff is to be able to create a stable company with longer term potential and higher overall value. This doesn't mean we are not pushing hard to grow, we are already through break-even and have more than three dozen customers for whom we are delivering products, including very large commercial manufacturers and military prime contractors.

MRF: How did iTerra actually come to be?

Walters: I was at Hewlett-Packard Co. and stayed with Agilent after its creation in a position that allowed me to gain a pretty good perspective about a lot of different technologies and markets. I had gotten to know David Arnold, the founder of Wavetronix, who I greatly respected, and his company offered me the opportunity to become an equal partner. Earlier I had gotten to know Andrea Berri-Berruto while working on a Ph.D. thesis at the European Space Agency, and we had kept in touch. Around the time when the industry prophets were projecting huge potential for 40 Gb/s optical communication—while at Wavetronix—he told me, after he left his company, he had developed some very interesting amplifier technologies for the optical market, and suggested we consider creating a company to build them, among other things. The idea grew, and iTerra was spun out from Wavetronix.

MRF: Of course, the 40 Gb/s market never materialized, so how did you cope with this?

Walters: Well we were certainly as surprised as anyone to see just how fast and how far the fiber-optic market would collapse. We quickly shifted to developing products for 10-Gb/s applications because this market seemed likely to produce meaningful revenue much sooner, which it is now doing. We also began to expand our line of high-speed digital ICs and microwave and millimeter-wave power devices, and began to exploit our multi-technology capabilities to produce custom products.

MRF: You have mentioned the quality of your multidisciplined engineering team. How have you pulled such talent together?

Walters: We firmly believe you must create what we call a learning environment in which creativity and reaching out to embrace new opportunities are rewarded, and failures aren't career-ending, cataclysmic events. This isn't something we take lightly because I've seen what happens when innovation is discouraged, and it isn't conductive to success. People at iTerra are encouraged and given the tools to take risks that may ultimately result in successful products or penetration of new markets. And we don't just pay lip service to the idea of employees benefiting from what they do. We make sure those benefits are tangible. You might say we are in the business of making people successful, both our customers and iTerra.