|
|
|
PIERRE-ANTOINE GRISONI/STRATES |
By MICHAEL BRUNTON
Posted Sunday, June 29, 2003; 14.08BST
Running a small computer company 10 years ago, says Daniel Borel, was "like flying at low altitude. You can hit a small mountain and die."
The chairman and founder of Swiss-based Logitech avoided that crash, and today a sales chart for the company looks like a smooth 17-year rise, from a $7 million takeoff to the current billion-dollar height. But Logitech's near miss came in 1994. Having designed and brought to market some of the first affordable and user-friendly computer mice in the mid-1980s, Logitech had overtaken Microsoft as the leading mouse supplier, with one-third of the global market.
"We were profitable, the employees were wonderful, we'd been a star in the newspapers," says Borel, who studied computer engineering at Stanford. "But now they were saying the company was failing and about to die." Hypercompetitive pricing from giants like IBM, Apple and HP was flattening small tech businesses. Logitech has only ever posted three losses; in 1994, the firm posted two in a row. "When we announced that loss, the bankers were on the doorstep asking for their line of credit back," Borel recalls. "Suddenly, we were nobody." The remedy was painful: the company's plants in Ireland and the U.S. were closed, directors hocked shares to finance a $15 million write-off, and beloved (but unprofitable) products, such as Logitech's 3-D mouse and the AudioMan microphone and speaker, were killed.
The remedy was also effective. Since the end of 1994, Logitech has stayed profitable and the sales graph line has continued its climb. The company diversified smartly into digital cameras, games controllers and cordless devices, helping shed its anonymous profile; more than half of the 100 million products it sells a year now bear the Logitech logo. "We've learned to operate extremely efficiently," says Borel. "And the scars from 1994 have stayed in the DNA of the company." In 1998, Borel handed executive control to ex-Apple marketing chief Guerrino De Luca, who steered Logitech still further away from PC-dependency with low-cost sellers like mobile-phone headsets and a personal digital pen.
Today, Logitech is the global market leader in keyboards and webcams, and is still whisker-to-whisker with Microsoft in the mouse race. Flying at such an altitude, Borel should no longer have a problem with those small mountains.
|
