Maerz also had Intel-type hard edges. He talked fast, tended to quantify things, and had integrated Intel's results-orientation and constructive-confrontation techniques into his management style. He was not a guy Birck could imagine putting his feet up with and "blue-skying" about some Utopian vision. Maerz was the kind of guy, Birck thought, who would want to know what Utopia looked like -- what kind of trees were there and how high the hills were.
But Birck wanted a manager, and he figured managers needed to think that way. Besides, he wanted the backing of Kleiner, Perkins, and he wasn't sure he would get it without Maerz. So he hired him. And by May, Kleiner Perkins -- along with Sevin Rosen Management Co., another venture capital firm -- had committed $800,000.
"Letting people follow their noses"
The second product called for in Birck's plan was the logic analyzer, the basic test tool of the digital designer, and Mike Maerz had some strong ideas about how it should be executed. Birck and Cordray had been willing to compromise some performance standards to meet price objectives, but Maerz was not. He was convinced that the people who used a logic analyzer were much more concerned about what it could do than how much it cost.
Achieving the kind of performance Maerz had in mind would require two changes in Birck's specifications: a separate instrument chassis and a slightly higher price tag. But even so, Maerz pointed out, Birck's basic goals -- that the box hook up to a personal computer and sell for significantly less than competing instruments -- would still be met.
Birck said fine. His job was to set goals. Maerz's was to exercute. Neither man saw this shift as a major strategic change.
The money from the venture capitalists -- combined with the sexiness of a world-class project -- allowed Maerz to attract a strong team to design, build, and sell the logic analyzer. And it was this team, according to Cordray, that made the biggest contribution to Northwest's evolution. "A lot of the engineers came from Tek," he says, "and at Tek, the attention was on high performance, not low cost. It was a case of letting people follow their noses into what made sense."
What made sense to the engineers was an instrument as good as the industry's best. Apparently, the venture capitalists agreed: Early in 1983, Sevin Rosen and Kleiner, Perkins put in another $1.3 million.
The week that the logic analyzer was introduced, Northwest made the covers of two electronics magazines. People at the company were euphoric. They had set high standards and met them, and customer reaction was even better than they had hoped. Soon the logic analyzer was selling better than the oscilloscope ever had.
Birck was pleased -- and ready to move on to the third step in his plan.
There are two major segments of the instrument industry: analog instruments (the traditional test and measurement tools, such as oscilloscopes, used by everyone from television repairpeople to physicists in order to measure continuous electrical currents) and digital instruments (which are used primarily by engineers designing hardware and software to measure electronic pulses in computer circuits). Birck's expertise lies in the analog area, but he had planned all along to develop both kinds of tools. Northwest's first product, the oscilloscope card, was an analog instrument; its second, the logic analyzer, was digital.
The next part of Northwest's plan called for bringing in analog people. Although Maerz and many others who had worked on the logic analyzer were eager to stay focused on digital design, Birck was not. He hired a 19-year veteran of Tektronix to develop a proposal for further analog development. But when the proposal came in a month later, it was clear that the project was larger than Birck had predicted, and would demand more resources by a factor of two to three.
"We couldn't afford to do both," Birck says -- at least not on the scale originally planned. Northwest got a third infusion of cash that September ($3.3 million, from a group led by Hambrecht & Quist and J. H. Whitney), but the young company's engineering budget was already the appropriate size for its stage of development. So Birck argued for scaling down the digital project and going ahead with a revised version of the analog program. There were strategic advantages, he was sure, to playing in both leagues.
To Maerz, vice-president for sales Jim Fischer, and Northwest's board of directors, Birck's proposal didn't make sense. The logic analyzer was a solid revenue producer. Northwest's marketing people and designers had digital backgrounds. Although the analog market was bigger, the digital market was growing faster. And analog competitors, such as Tek and HP, were more entrenched.
Birck didn't seem to be facing the reality of what his company had become: a team of people who had built a successful, high-performance digital product. He kept talking about his plan, not seeing that Northwest now had a momentum of its own.
No one had foreseen the exclusion of analog instruments from Northwest's future, but on a wave of logic-analyzer momentum, Maerz, Fischer, and the board pushed for it. And after a three-month debate, in December of 1983, Birck gave in.
