February 14, 2005
Interview with Todd Cutler, CEO Eagleware-Elanix
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Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
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Todd Cutler joined Eagleware as President and CEO in November 1998 after a 29 year career at Hewlett-Packard, 12 years of which were spent in the area of high frequency design automation. Mr. Cutler graduated from the Georgia Institute of Technology in 1979 with highest honors, earning a Bachelor of Electrical Engineering degree. He later earned a Master of Science in Electrical Engineering in Statistical Signal Processing from Stanford University. After working for three years on the HP8510 development team, he was a founding member of the HP European Marketing Center, located in Amsterdam, the Netherlands. He returned to the U.S. in 1986 to help start HP' s high frequency design
business in which he subsequently held positions in sales, and support and marketing management.

Were you one of the founders or did you join the company later?

I was brought in well after the company had been founded. The company was founded in 1985 truly as a basement organization and it really bootstrapped itself up to a reasonable size and certainly was making money and doing some good things. But the job got beyond what the founder really wanted to be doing. So in 1998 I joined the company. I left Hewlett Packard where I had worked for 20 years before joining here.

HP is obviously much bigger than Eagleware. What was the transition like?

The contrast was pretty remarkable as you can imagine. The big company is really nice because in a large organization there are resources everywhere. If you have some immigration problem, you call the immigration expert. If you want to do something with facilities, the facilities guy comes and does it. But when you come to a small company like Eagleware that's not the case. And certainly Eagleware was a small company when I came here 6 years ago. The really good thing about it is that you can do some things really quickly and some things you have to do yourself. Changing the price of a product at HP when I was there would literally take months to do. Soon after I came here we were
looking at some prices and one of them seemed a little bit off. So we talked about it a little bit, went home and came back the next day and by golly we changed the price and it was done. So the good news is you can move so quickly, the bad news is when the light goes out in your office, you would go get the ladder, climb up and change the light bulb yourself. It has changed quite a bit since those days but it was quite a change. Some things were way better and some things were not quite so much fun.

Not only did you transition from a very large company to a small company but you were replacing the founder who had put his stamp on the company.

That was one of my biggest concerns in joining Eagleware at the time, taking over from the founder. Is he really going to let you run the show? Fortunately, Randy Ray was just a great guy and he really did let go of the reins. He was there sort of as a coach on the sidelines but he wasn't calling the plays. He let me call the plays and occasionally he would provide a little help or assistance along the way. He was fortunately at a point in his life, he had set himself up well enough so that he could back out and start enjoying other things in life. He was remarkably quick in turning over control.

One of the things I did look at before I came here was what kind of culture of Eagleware had and how did it compare to the culture at HP. Because at the end of the day (I was talking about this earlier to someone here), the most important thing to me is that the people and the culture match up. Different companies have different cultures and when you have someone that doesn't fit it makes everyone unhappy. I didn't want to be the one coming in here with one set of ideas and the culture I been indoctrinated with at HP and come here and find something completely different. I don't think that would make anybody very happy. So all of that was part of my evaluation in accepting the job in
the first place. How well do I fit into what had been built here? And I think it fit pretty well. There are certainly a lot of changes and I think some good ideas that implemented on top of it. It is a culture of openness and egalitarianism and having participation in decisions. It was not a very hierarchical type of organization and certainly that's what I had gotten used to during my time at Hewlett Packard.

What expertise did you bring to Eagleware? Marketing, Sales, general management?

When I first was looking at it, they were looking at my coming in for sort of sales and marketing help, maybe more sales. But I was at a point in my career where that wasn't what I really wanted to be doing. So it ended up being sort of operational. When I joined the company, it was a small company, basically a bunch of developers. The founder did most of the marketing activities. There was no real sales activity at all. There was some marketing: basically good messages, good mail pieces, tradeshow presence but not matching up with the sales activity, not really trying to generate business. So the long way to answer your question is general operation management with an emphasis on
sales and marketing. It was amazing that it started with nobody that was selling the product. It was a kind of a mail order business but still managed to sell lots and lots, literally thousands of software licenses because it was a good product. But at the end of the day, that can take you just so far. You can have a better product. The adage says that if you build a better mousetrap, the world will beat a path to your door. That is certainly not the case and that's what we have found. We have developed a more balanced organization. It has marketing, sales, development and enough operational foundation to build upon. The business has done extremely well over that period.

Do you sell direct or through third parties?

We sell direct at least domestically, internationally we have local representation and distribution. Because we have such a pervasive presence in the market, just about anyone who is designing a communication system has some of our software somewhere in their facility. We don't really need to be making penetration into accounts as a typical startup does. Most of our activity is developing our accounts and trying to spread it and trying to make sure that the technology we offer is well understood by all, by enough of the people in the company so that they can take full value of it. So going direct even though we are very small has been very effective program for us.

What is the total number of customers?

2,000 different companies and about 5,000 different licenses have been sold. Actually, it's a little bit more now that we have acquired Elanix. So it is probably more like 6,000 licenses. We haven't quite sorted out where the overlap is but its sort of everywhere you want to be. It is all over the world. We do about two thirds of our business in the US and one third internationally. As we have been making more investment in our channel it has gone up a bit more than that in the US. We are stating to invest international and trying to get back up to where we hope it will eventually be 50/50.

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-- Jack Horgan, EDACafe.com Contributing Editor.

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