For Dennis Leisz, the movie, The Matrix, isn’t
that far-fetched. After all, he says, if humans can dream
up a world based on virtual reality, we have the potential
to create it, too. This coming from a man who claims to have
asked for a “Godzilla clause” in a recent contract
with a Tokyo company, just in case the legendary monster decided
to wreak havoc again.
This ability to see things that never were and to ask, “Why
not?” isn’t the only ability Leisz, president and
CEO of Wavecrest Corp., has relied on during his 15 years
in the world of semiconductors. He also understands what it
means to take risks to pursue an idea. And like the famous
tortoise, he’s crossing the finish line even as other
flashy technology hares come up short.
Tortoise is an apt description for Wavecrest Corp. (up to
a point). Since 1984, the Edina-based provider of testing
equipment for chip manufacturers and buyers pursued a series
of detours, with potholes, to arrive at its current destination.
By 1999, after a five-year revolution in the speed of semiconductor
technology, Wavecrest has become one of the fastest growing
technology companies in Minnesota with revenue growth of over
5,000 percent. Plus, the company has expanded to locations
in Japan, Munich and San Jose, California.
Its secret: Wavecrest has produced a technology that can
make time stand still – at least for microchip manufactures.
The company’s rocky history prior to 1994, however,
stemmed from being ahead of its time. In the early 1980s,
Leisz left a secure job with a St. Paul testing systems company
to follow the wave in silicon alternatives. His risk was personal,
with a wife and a newborn baby and no idea of when or where
the next paycheck would materialize.
“We relied on the support of family and friends for
a year. It was the best learning experience I’ve ever
had,” says Leisz who is, incidentally, still married.
So Much for Experts
Semiconductor analysts were predicting in the 1980s
that gallium arsenide would replace silicon in the production
of semiconductors due to its speed and strength. Leisz saw
the money pouring into its development and saw a market for
gallium arsenide chip testing equipment.
When Wavecrest’s testing product launched in 1987, Leisz
believed he had arrived. Wavecrest sold to big names like
Cray Research, IBM and Texas Instruments, and won an industry
award for best product of the year.
Two years later, the market dried up. Every company that
needed Wavecrest’s product had already bought it. Leisz
realized too late that he had developed a product no one needed
in the long run, and one that wouldn’t adapt to the slower
silicon chips produced at the time. Plus gallium arsenide
never took off as once thought.
One of the things that stopped Leisz from throwing in the
towel on the spot (after laying off his employees and confronting
ruin) was an angel investor who told him, “I haven’t
heard anybody say this doesn’t work. And I’ve never
read anything that said chips are getting slower.”
A friend from Control Data gave him some other advice that
has proved correct: success means staying in business long
enough until you get lucky.
“I had a good group of people behind me who liked my
story, a group of people in Minnesota who knew I intended
to stay here and this was not a fly by the seat of the pants,
get rich quick scheme,” Leisz explains.
Still, Wavecrest fought an uphill battle. Companies in its
market do not risk the performance of a $2.5 million chip
by switching pell-mell to a small Minnesota company they’d
never heard about before. So Wavecrest’s product had
to be unique, and world-class.
What resulted from the brains of an engineering team led
by Dennis Petrich (who helped create the test system for the
Intel Pentium chip) was a product that could measure the length
of time it takes a data pulse to travel the distance of a
human hair, and freeze it for analysis. Both chip engineers
and chip buyers could use Wavecrest’s technology to test
for aberrations that might cause blotchy graphics, or a timing
error that could crash a computer system, for example.
“If the signal is not correct, it tells them why not
and where the problems are,” Leisz says. As chip speed
has accelerated through the 1990s, the importance of analyzing
a single data pulse becomes clearer when viewing a game on
Super Nintendo compared to a game on Nintendo 64. Donkey Kong
and Mario never looked so good.
Neither has Wavecrest. Among the world’s semiconductor
manufacturers, roughly 86 percent use Wavecrest products.
Sales are close to 100 percent once a potential client sees
the sales pitch and the product, Leisz says.
“Before the launch, I had a good friend at Texas Instruments
evaluate the product. He says fundamentally it was great,
but it didn’t have the features he needed. I can still
hear him in his Texas twang, saying, ‘Dennis, if you
can make it do this, this, and this, I’ll buy it. Don’t
call me until it can do those things.’”
A year later, Leisz called his friend about his new product.
“‘Just fine,’ he said. ‘Send it down,’”
Leisz recalls. That was it.
Moving Ahead
Today, Wavecrest is leading the race in chip design at speeds
of 500 megahertz and above. The primary drivers are graphics
for game systems, casinos and arcades. But Wavecrest already
is focused on the future demands of the Internet and the convergence
of media for home and office.
The symbiosis of these technologies reminds Leisz of a similar
interdependence among his industry partners, a reality that
hasn’t allowed success to go to his head.
“We’re doing whatever we can to finance our growth
and provide a return to our stakeholders. Our stakeholders
are our customers, our shareholders, suppliers, and our employees.
There is a balance between all of them.”
Leisz still believes the good guys win in the end. That’s
why he practices catch and release while sport fishing in
the Northwest and why he has operated his business with a
sense of ethics that some would say defies reason. For example,
he has turned down all venture capital money, and any suppliers
that didn’t support the company’s vision. Job candidates
who don’t illustrate a history of honesty, integrity
and community involvement don’t get a second interview.
“Dennis will always do right. He practices what he speaks
and he knows that relationships are important,” says
Mike Evers, dean emeritus and professor at the Graduate School
of Business at the University of St. Thomas. Evers has served
on Wavecrest’s board of directors for five years and
knew Leisz prior to the company. Leisz received his undergraduate
degree from St. Thomas. In 1999, the university honored Leisz
with a business leader award for ethical business practices.
“He kept the company alive for 10 years when it was
ahead of its time. It takes a skilled entrepreneur to do that,”
Evers says. Now that Wavecrest is in a growth period, Leisz
is shifting gears by building an executive team to manage
the business while he and Petrich brainstorm new opportunities.
“He is providing the leadership, which I think speaks
well to the potential of the company,” Evers adds. Afterall,
it takes strategy for a tortoise to move faster than the speed
of light.
Slow and Steady Wins the Race
With revenue projections of $14 million
or more in 2000 and $100 million within four years, Wavecrest
strives to be a world leader in products that move technology
forward. Leisz anticipates diversification in products to
serve several industries such as medical, global positioning,
communication and photonics. To that end, the company expects
to employ 100 people among its four locations by mid-year
2000. A public offering may be in its future.
To illustrate how far ahead of the game it must be, Wavecrest
is currently working on product innovations that support technology
the public won’t see for two or three years. To put it
another way, Leisz has little doubt that today’s home
television, computer and telephone will morph into a home
telecommunications system for voice, video and data. Even
cars and wristwatches will respond to the system.
Leisz is a science fiction fan and claims to have seen The
Matrix several times. When asked if graphics will eventually
become so clear and realistic that they could fool people
into believing they were real, Leisz’ answer was both
telling and (for anyone who has seen the movie) chilling.
“Maybe.”
 Christine
Hierlmaier is a freelance writer based in Red Wing, Minnesota.
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