At a time when heavily financed, venture-backed companies are failing right and left, Xicor Inc. president and chairman Raphael Klein has emerged as a new role model in Silicon Valley. A former process engineer at National Semiconductor Corp., Klein launched the company in August 1978, without any venture capital at all. He did so, moreover, despite the conventional wisdom that any new semiconductor manufacturing company would fail without at least $50 million in start-up money.
Xicor, for its part, started with little more than an idea about a new kind of chip, known as a NOVRAM, which allows systems to retain and save data if power is lost unexpectedly. There was a real market need for such a chip, and that proved to be a major advantage for Xicor. "We didn't have the money for a technology trip," the Israeliborn Klein recalls in his Milpitas, Calif., office. "Not having money made us do everything right the first time."
Among the things Klein did right was to draw on the wisdom and experience of Julius Blank, one of the founders of Fairchild Semiconductor (a division of Fairchild Camera & Instrument Corp.), who now serves on Xicor's board. Klein also spent money carefully. He eschewed fancy offices, working initially at the home of one of his engineers, and he arranged to have Xicor's original manufacturing work done overseas, in Switzerland. "We wanted a product, not a fancy building," he says.
Today Klein continues to practice spartan management at Xicor, which last year enjoyed sales of more than $15 million and announced profits in excess of $800,000 for the first quarter of 1984. He still does his own photocopying and maintains relatively modes offices. But what Klein and his colleagues lack in amenities, they make up for in equity, controlling about 35% of the company.
"There's a simple lesson in all this," says Klein. "I see it all around me. We built this company piece by piece, slowly but with our goals in mind. A lot of people in the Valley think you need a fancy building or a Mercedes to get respect. But customers don't care about that stuff -- about your press clippings or the decor of your office. That's not what gets you where you want to go."