Ed Newman twistin the night away, everybody twistin twistin everybody twistin the night away!!!
Company Interview Excerpt
EDWARD NEWMAN - XYBERNAUT CORPORATION (XYBR)
Full article published: 11/29/2004
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TWST: Would you give us a quick overview of the company as you see it today?
Mr. Newman: The company has been maturing and has been putting down milestones for the public to witness objectively how we've been growing, how we've been pursuing the marketplace, and how we've been successful in taking the company from an R&D company to a much more mature company that is now starting to win in every functional area and operation it's involved in. We are a company focused on driving revenue and profitability. More important, we are focused on simultaneously realizing the huge stored value that has been created by the company's management team over the last 15 years embodied by its patents, its know-how, its strategic relationships, and its unique positioning to become one of the dominant technology companies in the world.
TWST: Give us an overview of the businesses you are in today.
Mr. Newman: Xybernaut has always been a solutions company, and we are in the business of, in essence, creating mobile solutions that provide a competitive edge with a measurable return on investment to our customers, to our strategic allies, and to our partners worldwide. Those partners include the various governments including our own, the Department of Defense, Department of Justice, Department of Transportation, telecommunications firms, cable companies, the Cox's, the Verizons, the Federal Expresses, the Hiltons, the CSX railroads, the MHI's, healthcare providers, and the recently announced Tesco, the largest grocery retailer and brand in the UK. Basically for us, mobile solutions have always been about getting the right information to the right person at the right time and the right place, which is always at the point of incidence of his work ' the place where a person is doing his job ' and that job could be anything from fixing something to counting something to killing someone. And we have been driven by delivering that information to each individual in the manner that enables him to do his job best and most efficiently. What is very essential for people to understand about our company is what the company is based on, what we've been pursuing, why we've been pursuing it, and why we've been succeeding. I hope that the perceived future value of this company grows in their eyes as they see the objective measurements we're laying in front of them. This company really came out of the Intel-DoD world some 20 years ago. In those days, we were tech support contractors to the military for some of the larger programs and platforms they were involved with. At that time, we were a small company with a bunch of smart guys who were not infrequently utilized to both monitor the activities of the larger systems integrators and ensure that the customer ' a Program Manager, Colonel or General ' understood where he was in the program and understood what he was or was not likely to be receiving. On occasion, if there was a deliverable they really needed or that was mission critical and they weren't in possession of at the end of their contract, they might turn to us and ask us to either tweak whatever they got to make it actually work for them or to provide a solution that hadn't been forthcoming. It could have been hardware or software, but typically we filled the bill. Because we did, we were asked to get involved with some of the issues they felt were most important, and the principal one around which this company was built had to do with a challenge they faced 20 years ago and still face today. At that time, the weapons platforms were becoming more and more complex while at the same time they were downsizing the military and losing the very people they needed to keep these things working ' the engineers, the trained mechanics and technicians. The challenge was; how can you keep this stuff working in light of this type of leakage? Xybernaut was presented with this challenge. The first thing we really did was create what are called IETMs, interactive electronic technical manuals. Xybernaut created the first IETMs as well as the exact words which became mandated for really all weapons platforms ' and though more or less an unfunded mandate with maybe 10% of the weapons platforms now having them. It was really the ability to take expert content out of the technical manual, out of a graphic or out of a detailed set of plans, as well as capturing the expert content from the actual individual experts who were leaving, and combine them with algorithms and some artificial intelligence. You wind up with a tool that enables a very low-tech person being able to repair or keep a very advanced weapons platform working. It was successful then and has been successful till now. As it was successful, and as we were introducing these into the military, we were (in real time) able to actually watch people work for a period of several years and I would say that the company's deepest skill set is its knowledge and know-how about how people actually work, down to it's smallest detail. We built everything in this company around the knowledge we gained, and we continue to do so today because people still today, and will tomorrow, perform work the same way. All of Xybernaut's past, all of its solutions, all of its products, all of its platforms and all of its partners are built around the things we learned about how people must work. We knew this back then, and it's the case now, that some 75% to 80% of all people in every enterprise we interface with don't work at their desk. They work somewhere else, and frequently, they work outside. Usually, more than half work outside, and we noticed that sometimes the sun shines and sometimes it rains; sometimes it's warm and sometimes it's cold; sometimes there's sand to deal with and sometimes there's wind. If the people still have to get the job done, it doesn't matter what the environmental conditions are, and any type of tool or enabling capability you're trying to provide has to be able to be utilized in those different conditions. We learned it was almost always the case that no one was successful at virtually any job they attempted unless they were looking at what they were doing. We also learned that when we usually say that someone is working, what we really mean is that they're doing something with their hands. What that meant to us is that they are almost always unsuccessful at what they are doing unless they can see their hands doing it. We found out that whatever tool we would try to give the various set of workers to enable them to do their job more efficiently or better, if it weighed over two pounds, it was basically useless. Unless you could read or benefit from this tool outside, for example, in the bright sunshine or rain, it was useless, and the workers wouldn't keep taking it. No matter what we would give them to try to enable them to do their job more efficiently, if there was a mobile job, they would invariably drop it, and it would break. Unless something would not break when you drop it, they were not going to be able to get their job done. Interestingly enough, if people were sent to do what we thought was a 10- or 20-minute job or what others might have thought was an hour or two job, they pretty much never came back to the office for more work. You never saw them until the next day; once they left, they weren't coming back. We learned also that there was almost always 'something else' that had been provided to them before or at the workplace. Tools, third party devices or a backbone integrated information system ' whatever you tried to give these workers to enable them to do their job more efficiently had to work within their already existing environment. For example, if they were using an operating system or certain applications or certain tools, yours had to integrate with it; they were not ever going to throw away their prior investment. The most interesting thing of all, around which we built our company, is that it was almost always the case that whenever anyone was sent to do a job, they virtually never got the job done on the first pass. This was invariably the case, and it didn't matter what the job was ' if it was to repair something or count something or eliminate someone ' they almost always needed something more than they had with them to do the work. After repeatedly and constantly observing these events, we said, 'You know, you can actually break down everything 'they come back for' in order to enable them to do their job into two categories.' It was always the case that they had to come back, one, to get additional content ' manuals, parts, parts list, graphics or maps. Or two, they were coming back in order to communicate with someone, getting more of an expert person to tell him actually how to fix something, which you can't find from reading a manual. We said it's clearly the case that these people are always coming back to get something to get their job done. If we are correct and it happens to be, in essence, 'computing and communicating,' that they are always returning for, what we should be able to do is move the computing and communicating closer and closer to where that person is actually doing the job. We should be able to document efficiencies in ROIs, which of course, you can do in every job and every industry. We said the goal here is this: we know that in order to get a job done, you 100% are going to need additional 'content' or 'communications' at the point of the job. The goal in our solution has to be to either eliminate the trip all together back to wherever that person is going to get the benefit of computing and communications, or at least decrease the distance he has to go, or the number of times he has to go. Since this is a constant characteristic of 'work' all- together, if we can create enabling tools based on what we've already learned, that would be the most efficient way for anyone to do work. Many people have thought of us and looked upon us as a wearable computer company, and we certainly dominate that space and know more about that than probably everyone else put together. At the end of the day, we actually created wearable computers because they were platforms that, in fact, enabled us to demonstrate that a worker did not have to go anywhere in order to get the very things that he would absolutely always need. The reason we came up with things, in those days, like headsets; was because it was a way you could display the information and still deliver the content and communications to a person in a hands-free manner, which we had already learned was the most efficient way to do a job. Once we demonstrated this repeatedly for a large number of years in multiple solutions, we decided we'd build the company around it. The first thing we did was develop an intellectual property space. We thought, 'Well, if we are correct, why not create a protected marketplace to exploit?' So the company went about establishing its intellectual property portfolio. We currently have more than 700 patents and applications worldwide that deal, in essence, with 'work' ' everything about computing, communicating, transmissions, platforms, software, hardware and wireless. We built the IT space and protected the marketplace. Then we decided, 'Well, now let's prove that there is a marketplace, and let's prove that there are products that can actually do this job.' This was in the days when there really were no wireless protocols, and actually there wasn't much wireless all together, when there were no notebooks or any other type of miniaturized devices; when there were not really any displays capable of being read outside or even showing a full page of text in daylight. Computers weighed 35 to 40 pounds. Theoretically, all of this could be done, and we, in fact, created the platforms and products to show it could be done and sold them to the military for large amounts of money. It was truly something that was not ubiquitous; it was something that was very expensive, and it was something off in the future. We decided we would build an infrastructure. We would build strategic relationships with the key players of the largest verticals in the world, and we would await the day when technology would move in our direction ' when things could be miniaturized, when things could be made economically, when wireless protocols would evolve, when processors would become strong enough. We would develop relationships and become known to these people. In essence, being their tech support contract expertise; not unlike our work for the DoD and military. So it is the case at most of the customer bases of Xybernaut today. Our people have been working with many of our customers for years, sometimes five, 10 or 15 years. Our clients know us well, know our capabilities well, and have come to trust us because we've done what we said we would. Over the years we have conducted hundreds of pilot studies and beta's tests; each one documenting ROIs or other measures of success. We really took the company itself on a significant directional change about a year or so ago. I took over an operational role at that time as President. I said to myself 'Well, we've built this great IT space. We have tons of patents. We have had our intellectual property independently evaluated at many multiples for our current market cap. We know exactly what the platforms are that can most enable people to do their jobs in the most efficient manner. We already have very strategic relationships with the very companies that could benefit the most from our platforms. We're trusted by them. We've already learned that it's kind of hard to sell people a bunch of things with headsets unless someone else causes them to wear something on their head to begin with, such as in the military. That we should be able to attack the market differently and create those types of products that would be rapidly accepted while still enabling work to be done most efficiently. Now, instead of betas and instead of pilots, we ask for money and contracts, rather than another 'opportunity,' from those who already know what we are capable of. Actually that is exactly what we've done and will do going forward. We've looked at all the pieces we had available to us and said 'they're all here ' we have all the pieces necessary to be highly successful and profitable. We just need to alter the way the company is going forward.' It's not that we don't believe there's a need for more IP; because there is. We've been creating it. It's not that we don't think there's a need for more infrastructure; there is, and we've created it. But we do think that at this point in the life of the company it is time to get profitable ' particularly with the events of 9/11, the successes we're having in the DoD and military, in homeland security, in vertical after vertical ' that we should absolutely focus the company on revenue growth and profitability. The key is to make sure that as we do so, we also reap the truly enormous 'stored value' of the IP, patents, know how, infrastructure, and strategic relationships that we believe has been created for the benefit of our shareholders. That's the task at hand.
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