BLADE Runner Featured

8:00pm EDT April 25, 2010

Vikram Mehta spun BLADE Network Technologies Inc. out of Nortel in 2006 because he saw the opportunity for a new kind of intelligent network backbone for data centers.

“There were customers who were depending on the success of this business, and the operation could not be successful where it was,” says Mehta, the company’s president and CEO. “This was about putting it in an environment where it could deliver on the commitment and promises that were being made to customers.”

Today, BLADE is booming. In less than three years, the company has grown to employ more than 200 people. Its networking switches support 9,500 enterprise data center clients in 26 industries, including 350 companies in the Fortune 500. And BLADE is on track to exceed $100 million in shipments for fiscal 2010.

Mehta was honored as a 2009 national finalist in the Emerging category and a Northern California regional Entrepreneur Of The Year Award winner. Smart Business spoke with his about ideas, relationships and how to motivate employees to discover that next great thing.

Q. What drives BLADE’s success?

We’re in a people business. It takes people to build technology. It takes people to come up with creative ideas that turn into products. ... So at the very heart of this high-tech business are people. That’s the biggest asset and most sustainable differentiator any company can have.

Q. You mentioned people coming up with creative ideas that turn into products. Do you have a system in place to foster that?

We have this concept called the Idea Pump. The Idea Pump is an electronic repository where anybody in the company can give suggestions that will improve just about anything that the company does. ...

I personally go in and review ideas that have been submitted in the Idea Pump. We then discuss it as an executive management team.

You’ll be surprised at the brilliance that comes out of this Idea Pump. I equate it to opening a radioactive tin — it’s glowing with brilliant ideas. In fact, at any given moment there are more ideas there than we have resources to follow through on.

When we take ideas out of there we go back and reward the individual or team of individuals who either came up with the idea or collaborate on making it reality.

Q. How do you encourage people to experiment with ideas?

The worst mistake that you can make is inaction. Moving fast, trying new things, even if they don’t work, will at least give you [an idea], as an organization, of what is not working. Then you can go off in another direction. But if you keep waiting, when you finally do take an action you won’t know if it will yield the results you want.

Going out there and trying new things is extremely important. Making sure you’re not making the same mistake over and over again is incredibly important, but I really encourage risk taking. No great things happen because you just walk along a safe path.

It’s all about taking risk. It’s all about learning from the outcome of those risks that you take. That’s what I do personally and try to practice with my employees, as well.

Q. How do you build strong relationships that translate into growth?

At the bottom of all of this is trust. If you give somebody a commitment, you will follow through on that. The approach that I’ve always tried to take on this ... is that if you’ve made a promise to somebody, if it’s the last thing you do before you die, you’ll fulfill that promise. As long as you bring that attitude, customers are going to trust you, employees are going to trust you, partners are going to trust you and suppliers are going to trust you. And in difficult times, they’re going to give you that one extra chance you need.

How to reach: BLADE Network Technologies Inc., www.bladenetwork.net

IPOs on the rise

While it may not feel like much in the economy has changed, a recent study by Ernst & Young LLP that analyzed business activity among Russell 2000 companies indicates that many companies are on a growth path.

“The current numbers suggest that all boats are rising with the Russell tide — or at least a significant number of them,” says Maria Pinelli, Americas Director, Strategic Growth Markets, Ernst & Young LLP. “If you are one of the smaller companies, it’s clearly time to get growing.”

One way to grow is to take your company public. According to E&Y’s survey, IPO activity grew significantly during the second half of 2009, with 32 IPO entrants added to the Russell 2000. That’s more than double the 13 IPO entrants during the first half of 2009.

If you’re thinking about IPOs, here are just a few of the questions you should ask yourself to see if your company is ready. You can find more questions as well as whitepapers on growth and entrepreneurship at www.ey.com/US/EN/home/library.

  • Have you developed a formal, comprehensive written plan and timeline?
  • Has your organization begun acting like a public company?
  • Are you actively addressing the four functional phases of the IPO preparation process: due diligence, drafting, SEC review and marketing?
  • Have you determined your company’s potential M&A valuation versus its public company valuation?
  • Is your team able to scale to meet the company’s growth projections?
  • Have you communicated realistic timeline expectations to key stakeholders?
  • Do you have a Plan B? Have you prepared a financing strategy to execute without an IPO?

Source: Ernst & Young, www.ey.com