Advanced Photonics

Move to Ann Arbor Positions Company for Growth
Rick Kurtz likens the business strategy of his company to the multiple-stick analogy.

"If one stick represents all of your business and it breaks, you have real problem. When you have 100 sticks, one or two can break but the strength is in the rest joined together that provide you alternate sources of business."

Kurtz, the president and chief executive of Advanced Photonics (API) recently moved the corporate headquarters to Ann Arbor from California when it acquired Picometrix.

"We used to be totally reliant on one product platform. The purchase of Picometrix meant we expanded our product platforms and increased the number of new markets and users," Kurtz said. "We continue to sell to the same customers in Homeland Security and Sensing markets, but now have more capabilities to offer."

The strength of API had been the manufacturing of silicon-based optoelectrical components, high-speed optical receivers, and subsystems based on indium phosphate and gallium arsenide semiconductors.

Industrial sensing market which includes non-destructive testing was nearly half of API's revenue in fiscal 2006. Military aerospace made up about a quarter of the firm's revenue.

As a one-product business, the firm could suffer from any market downturn. "By offering three product lines, we have increased and enhanced our position across new markets and potential new customers. These markets have excellent potential so by this new strategy, we are no longer a one-trick pony," Kurtz concluded.

Kurtz noted that the purchase of Picometrix also provided API with new management people, seasoned in the operations, finance and high-tech manufacturing areas.

"Picometrix had a great reputation in the market and some solid relationships with the University of Michigan and its researchers and scientists," he noted.

"All of these factors entered our decision to move headquarters to Ann Arbor from California. We retained some manufacturing operations in Wisconsin and California and we now have about 180 employees, evenly divided between Ann Arbor and the two manufacturing sites," Kurtz said.

The acquisition also expanded API's penetration into the telecommunications market with high-speed optical receiver products and in the Homeland Security market with Terahertz products and contacts.

"A key factor in our decision to move corporate headquarters to Ann Arbor was access to the University of Michigan and its excellent technology people. The manufacturing and operational capabilities of Picometrix meant availability of people with high-tech clean room, experience and people who know statistical process control. We are finding good people who want to work in a growing organization that affords them lots of opportunities.

"The economy of this state got in trouble because they were reliant on one industry, automotive. When it incurred issues of worldwide competition, there weren't enough small-to-medium-sized businesses to pick up the slack."

Kurtz believes his growing 180-person business will become a model for others as the Michigan economy transitions to the "more sticks means greater marketing opportunities" strategy. "We need to have hundreds, even thousands of companies in the 100-to-500 employee range."

"A key factor in our decision to move to Ann Arbor was access to the University of Michigan and its excellent technology people."

Rick Kurtz
Advanced Photonics, President and Chief Executive