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Don Sytsma: Global Challenges for a Small Technology Company

Don Sytsma is chairman and CEO of Meteor Communications Corporation (MCC), a company located in Kent, Washington, that provides wireless packet data networks using meteor burst communications technology.

Sytsma attended Florida State University and the University of Florida, earning B.S. and M.S. degrees in electrical engineering. He is a registered professional engineer in the state of Washington.

He joined The Boeing Company in 1967 and worked at its Space Center for 13 years in various engineering and management functions.

Don is a co-founder of MCC and became its president in 1986. With his co-founders, he pioneered the commercialization of meteor burst communications. The company has been providing turnkey communication networks around the world since that time. He is also chairman of MCC (Europe), a subsidiary based in London.

Sytsma is a principal owner and chairman of Double Arrow Lodge, a year-round destination resort in Montana. He also serves on the board of HR Services Inc., a human-resources placement firm in Seattle.

Sytsma was born in the Netherlands and immigrated in 1948. He is an elder at First Evangelical Presbyterian Church in Renton. He and his wife, Carol, have four married children and four grandchildren. They support scholastic scholarship, outreach to youth and micro-enterprises in developing countries.

Ethix: You are working with an unusual technology. Tell us about it and about your company.

Don Sytsma: Our core business is using meteor burst communications to provide wireless data communications within large geographic areas. We reflect radio signals off tiny meteors, about the size of a grain of sand, that vaporize when entering the earth’s atmosphere, leaving a ten to fifteen mile long trail of ionized electrons for about a quarter of a second. We provide digital packet data networks by reflecting radio signals off these trails. There are literally billions of these dust size particles that enter our atmosphere every day.

How did you learn about all of this? Did you study astronomy?

It was discovered in the 1940s by ham radio operators. They realized they were getting long-range communication by literally reflecting their signals off ionization trails left by these micrometeors. In the 1950s, researchers were able to fully characterize these meteor trails and develop practical communication systems based on this technology. When I worked at the Boeing Company, we began using this technology for the Department of Defense and other military applications. It is a very survivable, durable, and covert mode of communication; it is very difficult to jam or intercept a signal that is bounced off a meteor trail. A satellite can be disabled or destroyed but these meteors are an abundant, natural phenomenon. Meteor Communications was formed with the agreement of Boeing when Boeing decided not to pursue this technology further.

If you can get all these “satellites” for free why are others still launching their expensive communication satellites?

Our technique is not large bandwidth; it is a low data rate channel and not ideally suited for voice or video. We can send frames of video and we have also sent voice over a meteor burst channel, but it requires high power transmitters and quite a large antenna array.

What are some of your applications of this technology?

The first large system that we deployed was for the Department of Agriculture. From seven hundred remote sites in the western half of the United States we used our technology to monitor snow pack conditions in the mountains — water content, wind speed and direction, air temperature, solar radiation and so forth. Our communications equipment automatically collects and transmits these measurements at regular intervals, typically every fifteen minutes.

We have also provided systems for classified, covert military applications tracking troop movements and military threats that otherwise would have required observation stations behind enemy lines that would be very difficult to protect.

Don’t you also track tug boat locations?

Yes. We have developed very robust communication protocols that allow us to transmit as much information as we can through an intermittent channel that only exists for a fraction of a second. This same protocol also works very well for what we call ground wave, or “extended line of sight,” which we use for mobile applications such as tracking the position of vehicles, locomotives and tug boats. Our network topology is similar to cellular systems, except our cell sizes are about 2,000 miles in diameter for meteor burst and 75-150 miles for extended line of sight.

There has been a real shift in our company’s business because of technological advances. In the past we generally provided meteor burst communication networks for collecting data from sites at fixed locations; now with smaller, more powerful computer chips we can shrink the size and cost of our equipment and pursue other applications. Almost half of our business is now for mobile communications using a combination of extended line of sight and GPS for keeping track of mobile assets such as tug boats, ferries and other vessels in Washington state waterways and along the U.S. and Canadian coast line. We provide both positioning data and full two-way messaging services, similar to e-mail.

Are you also working outside of the United States?

Over half of our business is overseas. We have equipment on all seven continents. Just this past year we completed projects in Pakistan, Indonesia, Nepal, Chile, Sri Lanka and the U.K.

Do your projects ever involve sensitive technology that you worry about giving to others?

We just delivered a system to China despite all the difficulties in our relations with them. When we delivered an earlier system to China in 1985, we worked very closely with our State Department, which knew exactly what we were doing. They wanted to keep an eye on where it was going and how it would be used. But, even though our technology sounds high-tech, it does not involve the sort of high speed processing technology that would be considered sensitive.

Your company provides channels to communicate information. Are you ever concerned about what that information is, or how it is going to be used?

A lot of our data is not personal. For example, we collect information from a number of tugboats in the Puget Sound area in support of the International Tug of Opportunity System.

If an oil tanker should run aground, our system locates and dispatches the nearest available tugboats to rescue the tanker. The individual tugboat companies very jealously guard their tugboat locations so we provide firewalls and passwords in our data center to ensure that only the customer sees his data and the competitors do not.

On the other hand, when you do a business deal in China you generally work through several layers of companies. The stated purposes for the system we just delivered to China are monitoring river flows that feed into hydroelectric projects and for back-up communications in the event of natural disasters. However, we may never really know the true identity of all the end-users. It may include the People’s Liberation Army — but I’m not certain of that. Our Department of Commerce requires an “ultimate consignee” from our customers prior to export and we hope our customers are being up front with us in the use of the system.

Another issue that comes up in international business is bribery. Have you had to face that challenge? How do you deal with different national laws and cultural traditions on these matters?

It is a very difficult challenge and we face it all the time. The way our company operates is that we work through representatives in each country who help us by facilitating our projects. For example, in many countries if we want to get our equipment through customs, our representatives will have to “facilitate” it. It’s just a fact of life and business; everyone knows the system and has to live with it.
We reflect radio signals off tiny meteors about the size of a grain of sand… A satellite can be disabled or destroyed, but these meteors are an abundant, natural phenomenon.
In many developing countries there may be various government agencies that require extra payments to be made to them. Customs agents themselves will quite often require cash payments to allow equipment through in a timely manner. If you are on a firm, fixed-price contract, with penalties for late delivery, your agents have to ensure that your equipment doesn’t sit in customs for two months.

What about our U.S. “foreign corrupt practices act” and regulations of that sort?

We comply with the law, of course. Generally, we sell directly to our agents or representatives and they manage and facilitate the project within the normal business practices of that country. Recently, we completed Phase I of a project in a developing country. Phase II was to be released for competitive bidding; a project valued at about six million dollars. We were informed that for a $30,000 cash payment, up front, we would be the successful bidder. To me that was a black and white issue, and I wouldn’t have any part of it. This was clearly bribery, a much different thing than “facilitating goods” through customs.

What other challenges do you face in doing business in the international arena?

Last year, while we were doing a project in Pakistan, the Indian and Pakistani governments both detonated nuclear bombs and Nawaz Sharif, the prime minister, froze all foreign currencies and would not permit anyone to take US dollars out of the country. Now, we are a small business, very dependent on timely payments for our work and equipment. Our employees have families and need their salaries. I struggled over this for a while. I had to weigh compliance with the ruler’s new edict with my responsibility to our employees. I chose to support my employees in this case, even though, technically, taking cash out of the country was against the new law.
When you do a business deal in China, you generally work through several layers of companies.

What about the labor of women or children. Sometimes other countries allow what we prohibit as exploitive in America.

On a project in Nepal, we had to carry all of our equipment for about a hundred miles over terrain where there were no roads or other infrastructure. I worked there myself for about five weeks. We hired local people from the villages to be our sherpas. From their perspective, this was a great opportunity to make some good money, even though we only paid them $3 to $5 a day. The per capita annual wage in Nepal is around $165. We carried in cement, batteries, towers, approximately 25 tons of equipment for our remote communications system. We hired men to carry the heavy equipment and we hired women to help us by collecting rocks and using their hammers to make little ones out of big ones for aggregate in the concrete footings for the towers. Women also dug ditches on very steep and rocky slopes where we could bury our cables. I was just amazed at their productivity, enthusiasm, and willingness to do this hard work alongside us. They did a great job; we got the whole job done in two months.

There is also a law in Nepal that to be a sherpa you have to be at least eighteen years of age. I wondered about a young man carrying equipment, including my personal gear, who didn’t look more than 16. I asked him several times how old he was and he insisted he was 18. He wasn’t being hurt and I didn’t pursue it further, but I still wondered about the right thing to do with my suspicions.
Have you had to face the challenge of bribery in international business?

You mentioned that your company is small. How many employees are there?

There are about twenty of us right now, but we often enter into strategic partnerships with other companies so that we can leverage ourselves. The project we did in Nepal was a joint, 50/50 venture with a Canadian company. We also subcontract most of our manufacturing and circuit board assembly to other small companies.

A larger company would probably have an ethics officer who would maintain ethical guidelines and compliance and a technology officer who would manage technological development and maintenance. How do you deal with such issues?

As far as ethical guidelines, we have a statement of philosophy and operating standards. We are committed to four things: respect for the individual, customer satisfaction, excellence in all endeavors, and corporate integrity. We don’t have an ethics officer per se but as president and CEO of a small company I can lead by example. If the CEO or president compromises, then it’s very easy for others to do so as well.

Many of our ethical issues in business seem to revolve around personnel and relationships.

One of my recent challenges concerns loyalty to our employees. A software engineer worked for us on contract for about a year and then we hired him full-time on our staff. About two months after he came on our payroll he suddenly became very ill from a liver disease and wasn’t able to fully perform his job. His productivity really deteriorated but we have kept him on our payroll. He works maybe ten hours a week at home. How long is it right to keep him on our payroll? Everyone else pulls pretty hard to make up for his absence, but there is still an extra expense that affects our employee profit sharing plan. Do we terminate him? I know that he does not have a lot of money and he is very sick and waiting for a liver transplant. What is my moral responsibility for him? I’m not in business just to make money and we want to take care of our people. The fact that he got sick wasn’t his fault. We finally had to hire another engineer to replace him and I’m thinking now that we will put him on a leave of absence, but continue to carry his medical benefit insurance so that there’s no interruption there.

Postscript: We continued to carry him as a full time employee. He received a liver transplant in October (the same liver disease as Walter Payton). He now works 50/50 between home and office and will probably be back full time in the office early next year.

What do you see as the future now? Do you see your company remaining at twenty people?

In the early 1990s we had about 180 employees when our business was drastically reduced as a result of cuts in defense spending. We have “reinvented” our company and I think we’re on the threshold now of really growing again. We have a very capable staff; we have reengineered our product line with equipment that is simultaneously smaller, less expensive, more capable, and very competitive. We have obtained several nationwide frequencies from the FCC. In the past, we always built turn-key communication systems for our customers. Now, we will own and deploy our own systems and service networks; we will lease equipment and channel time on our own base stations. The focus of our business is changing. Instead of building and marketing systems to others, we will generate on-going, monthly revenue from our service networks.

So our company is going to grow, but we are also going to be very cautious about growing too rapidly. I don’t ever want to go through a layoff experience such as we went through before. Our growth strategy will involve a lot of teaming up with other companies, for example, with manufacturers of product lines that are complementary to ours.

Will our corporate culture change? I don’t think so. We’re a high performance team because we do operate as a family.

Where are the threats to your future success? For example, might your technology become so inexpensive and easy to replicate that others could take over your market?

It’s not easy to do what we’re doing with our particular technology. We have many years of experience and have made significant investments in developing our particular hardware and software products. Other companies have tried and failed. The greatest threat to our company may be from competing technologies, like cellular and satellite communication. But, we do have a niche market as a low cost service provider and as a provider of wireless data communication in remote places where you don’t have cellular, like up in the mountains. There is some competitive threat from the satellite providers, but we are able to compete with more favorable rates because of our much lower capitalization requirements to build out a network.

Let me ask about managing the technology infrastructure in a twenty-person company. Without a chief technologist overseeing the process, how do your people keep up to date, stay linked together, migrate their equipment, and so on?

We do have a vice-president of engineering who serves as our chief technical officer. Even though his primary expertise is in meteor burst, he is very broad based in communications technology and supporting software. The rest of our marketing and technical staff are also very cognizant of other available and complementary technologies. We generally get together as a group to discuss what would be best for us. The Internet is a great tool for us to keep up to date and we also use consultants to advise us.

Does technology help you stay in touch with your home office and continue leading as CEO when you are in the field as you were recently for those five weeks in Nepal?

We did have a satellite phone in Nepal for keeping in touch, but we used it primarily for emergency purposes. I got calls from my wife a couple of times because she was concerned about some surgery I had had just prior to the trip. We have a good team of people who’ve been together for quite some time. I have an enormous amount of trust in my colleagues. It is a small, but very loyal group. I think it’s actually good for me to be gone for a period of weeks because then the company can run on its own.

What do you do to maintain the spirit of your organization?

This has not been difficult because we work on a lot of very interesting projects in far away places. We work closely with people from many different cultures. Our customers visit us for training and we interact a lot with them. There is also enthusiasm and a good feeling about how many of our projects benefit people. For example, in Nepal, five thousand lives were at risk along a valley floor at the foot of a high altitude glacial lake. If the glacial moraine dam breaks, a twenty to sixty-foot wall of water would come rushing down the valley floor at 30 to 40 miles per hour and literally wipe out all those people. We created a detection and warning system to alert every village and give the inhabitants time to flee to higher ground. We feel good about this kind of project!

Some leaders of small companies work about eighty hours a week trying to make it happen. What kind of hours do you put in?

We are committed to four things: respect for the individual, customer satisfactions, excellence in all endeavors, and corporate integrity.
My wife would probably say I put in a hundred hours per week! Actually, I probably average more like 60.

Since there is always more work to do, how do you set boundaries for yourself?

I prioritize constantly on my list of items that need to be done. One of our commitments is to excellence in all endeavors. I like to do things right. I’m not a perfectionist, but I do concentrate on the high priority items. We also work very well as a team of 20 people. Everyone knows what they’re doing and doesn’t need close supervision or micromanagement. We are able to get a lot done. We also try to maintain a very close relationship with our customers, including the international ones, to minimize surprises.

What management books have influenced your approach?

Actually, the Book of Proverbs is my foundation for ethics in business. I also read a lot of books on leadership and management, but I find that all the good principles in those books are summarized in the Book of Proverbs. My habit is to read one chapter of Proverbs every day. There are 31 chapters and I read the chapter that corresponds to that day’s date. It contains a wealth of solid information and sound guidelines.
It’s important to always have your moral compass aligned…

But wasn’t that written in an era before technology, how does it apply?

Proverbs gives the fundamentals, the ground rules, for ethical behavior from various perspectives. If you’re firmly rooted in the fundamentals you have a basis, a freedom, to deal with the tough issues. Technology with its speed and change adds new dimensions to that challenge, but with the right foundation even these issues can be dealt with if we are willing to think carefully and creatively. It’s important to always have your moral compass aligned properly.

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