Hansa Ma­trix Ceo: “trust Your Senses - My Un­writ­ten Rule I Fol­low In Mak­ing Strate­gic De­ci­sions”

The Baltic Times - - FRONT PAGE - Li­nas Jegele­vi­cius

The Techchill startup event, be­ing held in Riga Fe­bru­ary 9-10, will bring a dozen Baltic startup lead­ers and trail­blaz­ers, among them Il­mars Os­ma­nis, the CEO of Hansama­trix, an edge­cut­ting elec­tron­ics man­u­fac­turer. Dur­ing the last 15 years, he has founded and de­vel­oped sev­eral startup com­pa­nies, but the cherry on the cake has been Hansama­trix, which was listed on Nas­daq Baltic last year. The Baltic Times sat down with Mr. Os­ma­nis for an in­ter­view.

As you look for­ward to wel­com­ing Techchill con­fer­ence par­tic­i­pants and guests in your com­pany’s base town Riga, what will be your key ob­ser­va­tions about the de­vel­op­ments and trends in the startup ecosys­tem---glob­ally and re­gion­ally?

First of all, I’d wel­come ev­ery­one who has de­cided to be­come a startup en­trepreneur or works for a startup com­pany. Se­condly, I’d wel­come ev­ery­one who has come to Riga and is tak­ing part in the Techchill event. I think events like Techchill in Riga and SLUSH in Helsinki are play­ing an im­por­tant role in en­cour­ag­ing young (some­how ev­ery­one thinks that star­tups are a young per­son’s world, right?) peo­ple to re­al­ize their dreams.

Look­ing glob­ally, one of the com­pletely new roles for star­tups is in­no­va­tion lead­er­ship. While es­tab­lished cor­po­ra­tions fight more for mar­gins and re­sults, some­times sac­ri­fic­ing busi­ness and tech­no­log­i­cal in­no­va­tion – busi­ness and tech­no­log­i­cal star­tups re­place them. Star­tups gen­er­ally are much less wor­ried about R&D, in­no­va­tions costs, and busi­ness mar­gins, and are much more flex­i­ble in de­vel­op­ing new tech­nolo­gies and new ap­proaches. At the same time, ven­ture in­vest­ment funds have to be able to show the same level of flex­i­bil­ity and bridge the gaps be­tween tra­di­tional in­vestor roles: Soft­ware – Hard­ware; Medtech – VR/AR; Tech – Clean­tech.

What is spe­cific to the Baltic startup scene? What can the re­gion be proud of and where does it, per­haps, lag be­hind in the de­vel­op­ments?

I can­not say I am an ex­pert on the startup scene. What I am not see­ing in the Baltics is deeper in­volve­ment in tech­no­log­i­cal startup sup­port in uni­ver­si­ties. As an ex­am­ple, Stan­ford Univer­sity in Cal­i­for­nia is much more proac­tive in spin­ning off new com­pa­nies.

Prior to at­tend­ing Techchill, you trav­elled to Cal­i­for­nia as far as I know. The trip was not about leisure, I as­sume. Did you pay a visit to Sil­i­con Val­ley? What is trend­ing there now? What mes­sages is the hub send­ing to the rest of the world?

Yes, be­fore Techchill, I spent two weeks at the world’s in­no­va­tion kitchen. With the Lightspace Tech­nolo­gies team, we par­tic­i­pated in SPIE Pho­ton­ics West 2017 Expo in San Fran­cisco, and vis­ited the Stan­ford Medicine

3D and Quan­ti­ta­tive Imag­ing Lab­o­ra­tory with a pre­sen­ta­tion. Both events al­lowed us to present what we be­lieve is a ground­break­ing 3D im­age dis­play tech­nol­ogy for use in medicine and other ap­pli­ca­tions. We are com­ing back with valu­able new busi­ness con­tacts and feed­back.

Lightspace Tech­nolo­gies is a new hi-tech com­pany that de­vel­ops vol­u­met­ric 3D im­age tech­nol­ogy, and it was started up by Hansama­trix jointly with two fi­nan­cial in­vestors. Such a com­pany would not be pos­si­ble to launch with­out Hansama­trix’s deep tech­ni­cal ex­per­tise of elec­tron­ics.

Trend­ing in in­vest­ment ac­tiv­i­ties of the in­no­va­tion kitchen has not re­ally changed. Most of the in­vestors and new tech­nol­ogy de­vel­op­ers are still fol­low­ing “meerkat” in­stincts and col­lec­tively in­vest­ing in a few tech­nolo­gies they all con­sider valu­able, so, that way, no one in­di­vid­u­ally would fail.

His­tor­i­cally, there have been sev­eral col­lec­tive fail­ures. As an ex­am­ple, de­vel­op­ment of stereo­scopic 3D TV’S. All man­u­fac­tur­ers of TV’S de­vel­oped own 3D tech­nolo­gies and de­liv­ered them to mar­ket and fi­nally some of them last year de­cided to stop man­u­fac­tur­ing of those be­cause no one re­ally wanted to use them. Huge in­vest­ments in VR head­sets hap­pen­ing now is prob­a­bly an­other col­lec­tive over­spend­ing of re­sources.

Last year, your com­pany Hansama­trix cel­e­brated its 15th year an­niver­sary. Can you talk about it? You per­haps did not shun ups and downs through­out the years, if you can talk about it? What has helped you to get through and stay on the com­pet­i­tive edge?

The very be­gin­ning of our op­er­a­tion was in June of 2001. We could not get any fa­mous garage avail­able, so we started our man­u­fac­tur­ing op­er­a­tion in a re­fur­bished build­ing which was orig­i­nally used as a gym. In the be­gin­ning, our team con­sisted of seven peo­ple. First prod­uct that we man­u­fac­tured was 4 elec­tronic cir­cuit sam­ples (printed cir­cuit boards) for now a very well-known com­pany, SAF Tehnika. As a fact - all of them failed in tests, but, for an un­known rea­son, we did re­ceive a new or­der.

Pro­vid­ing high-ef­fi­ciency in­te­grated man­u­fac­tur­ing ser­vices of elec­tronic sys­tems and en­sur­ing smooth man­u­fac­tur­ing pro­cesses com­bined with high yield and ex­cep­tional qual­ity in the com­pet­i­tive en­vi­ron­ment like elec­tron­ics must re­quire nitty-gritty knowl­edge of the busi­ness and up-to-date tech­no­log­i­cal ca­pac­i­ties for sus­tain­able so­lu­tions. How do you en­sure the continuity of co­he­sive and smooth op­er­a­tion? Are there any un­writ­ten rules you go by in mak­ing strate­gic de­ci­sions?

All that can be achieved with de­ter­mi­na­tion, con­tin­u­ous learn­ing and no com­pro­mises at­ti­tude to com­pe­tence and qual­ity. An un­writ­ten rule that I fol­low in strate­gic de­ci­sion mak­ing is this - trust your senses.

How does your or­di­nary day at Hansama­trix look like?

I can­not re­mem­ber ever hav­ing an or­di­nary day. Ev­ery day is new, unique and dif­fer­ent. There is one im­por­tant rule I try to fol­low – work on im­por­tant prob­lems first! In this way, you are re­duc­ing fu­ture ur­gent prob­lems to ap­pear. Ur­gent is­sues are in most cases a re­sult of non­solved im­por­tant prob­lems.

Last year, Hansama­trix re­ceived a R&D pro­ject grant fund­ing for RF test­ing tech­nol­ogy de­vel­op­ment. How were able to ben­e­fit from it?

Hansama­trix is con­tin­u­ously de­vel­op­ing R&D com­pe­tence and ex­pand­ing to new com­pe­tence ar­eas. Prod­uct de­vel­op­ment and in­dus­tri­al­iza­tion of ra­dio fre­quency (RF) prod­ucts re­quired also test­ing sys­tem com­pe­tence de­vel­op­ment. That was mainly aim of grant funded pro­ject. R&D grants are ex­cel­lent risk shar­ing in­stru­ment to en­cour­age com­pa­nies to ex­plore new com­pe­tence ar­eas and we use them.

Also in 2016, Hansama­trix rang the bells mark­ing its ad­mis­sion to Nas­daq Baltic Ex­change. What is the ad­di­tional value of the mem­ber­ship?

Our de­ci­sion to get listed was trig­gered by over­all skep­ti­cism. Af­ter hav­ing a few dis­cus­sions with in­vest­ment ad­vis­ers when most of them told me that list­ing for medium size com­pany at Nas­daq Riga is not pos­si­ble, I sensed the taste of chal­lenge and de­cided that fi­nally I am hav­ing de­cent pro­ject to ac­com­plish. The big ad­van­tage for me is new sta­tus of com­pany when we are not hav­ing any­more short in­vest­ment and exit cy­cles, how that is with pri­vate eq­uity in­vestors. This al­lows to plan for larger tar­gets.

Can you speak about the peo­ple you em­ploy? Is Latvia able to pro­vide all the nec­es­sary work­force you need? Do you out­source some of the ser­vices? How do you feel about the out­flow of Lat­vian work­force?

I have al­ways counted only on avail­able re­sources. I be­lieve we have the best in world pro­duc­tion work­ers, tech­ni­cians and en­gi­neers. The same time they con­stantly have to learn new skills and com­pe­tences. We use also out­sourced la­bor and what is more in­ter­est­ing we are reg­u­larly re­cruit­ing Lat­vian grad­u­ates of Euro­pean uni­ver­si­ties that are will­ing to come back and get an in­ter­est­ing en­gi­neer­ing job.

Can you speak a lit­tle of your co­op­er­a­tion with high-tech in­sti­tu­tions as well as ed­u­ca­tional fa­cil­i­ties? Are you still of­fer­ing a com­pe­tence de­vel­op­ment pro­gramme for your em­ploy­ees? Is it a car­bon-copy of what top Sil­i­con Val­ley start-ups of­fer?

No, it is not. In or­der to en­sure con­sis­tent de­vel­op­ment of busi­ness, we have in­vested ef­forts in cre­at­ing dual ed­u­ca­tion pro­gram with lo­cal tech­ni­cal vo­ca­tional schools in Ventspils and Ogre. In this co­op­er­a­tion we are pro­vid­ing hands-on train­ing and learn­ing pro­gram and we are get­ting large num­ber of grad­u­ates to join us. Re­gard­ing uni­ver­si­ties, we are de­vel­op­ing in­tern­ship pro­gram for en­gi­neer­ing stu­dents and co­op­er­a­tion in R&D.

Stan­ford Univer­sity was val­u­ated as world leader in num­ber of grad­u­ates that started “uni­corns”. It speaks for it­self. Sil­i­con Val­ley start-ups re­cruit from world tal­ent cream and do not care very much about em­ployee de­vel­op­ment. When they es­tab­lish then some of them es­tab­lish they own cor­po­rate uni­ver­si­ties.

What global big names do you work with? Which of the clients are you es­pe­cially proud of ?

I would like to men­tion one very spe­cial our client. It is Lat­vian com­pany Mikrotikls which ac­cord­ingly to re­ported re­sults in year 2015 has ex­ceeded 200 mil­lion euro turnover. Back in year 2002 John Tully (one of Mikrotikls founders) came to our “used to be gym” man­u­fac­tur­ing fa­cil­ity and asked – would You be able to man­u­fac­ture in­ter­net router boards for us if we man­age to de­sign own hard­ware ? Since then we have been grow­ing step by step and I am very proud about their suc­cess. I wish them soon to be­come first Lat­vian “uni­corn”.

As your com­pany op­er­ates in Riga, known for its di­ver­sity and the large eth­nic mi­nor­ity of Rus­sians, how the eco­nomic sanc­tions against Rus­sia have af­fected your com­pany? Has the com­pany sev­ered all links it had with Rus­sia be­fore their en­force­ment?

Two largest Hansama­trix man­u­fac­tur­ing units are ac­tu­ally lo­cated out­side Riga – they are lo­cated in Paro­gre and Ventspils. In fact, this year, we are cel­e­brat­ing 10 years of man­u­fac­tur­ing in Ventspils.

To be frank, it was some chal­lenge to es­tab­lish modern man­u­fac­tur­ing op­er­a­tion in elec­tron­ics back in 2001. We fol­lowed two “iron” rules - we did not re­cruit any­one with “Soviet” man­u­fac­tur­ing back­ground and we cre­ated com­pletely new cul­tural and qual­ity re­spon­si­bil­ity model. As a con­se­quence we do not have any such links and do know about ex­is­tence of such sanc­tions only from news­pa­pers. Even con­trary, we are start­ing to have good con­tacts with Rus­sian com­pa­nies that are look­ing for mar­ket in EU.

Are you un­easy in a sense of US Pres­i­dent Don­ald Trump’s de­ter­mi­na­tion to “put Amer­ica first” in­dus­tri­ally? Where does the bulk of your ex­port go to?

Not re­ally. You have to re­al­ize that in 21st cen­tury capital fol­lows the knowl­edge. Knowl­edge is the only sin­gle im­por­tant in­gre­di­ent that brings in­come to the worker. These days you do not need a tower to see a World - you can see much of the world from sin­gle in­ter­net­worked com­puter screen. I can­not imag­ine US putting im­port bar­ri­ers to all hi-tech im­port it uses to be­come com­pet­i­tive – Tai­wanese mi­crochips, Ja­panese dis­play tech­nolo­gies, Ger­man op­tics and man­u­fac­tur­ing tech­nolo­gies, etc.

I think Don­ald Trump’s “put Amer­ica first” is sup­posed to help to cre­ate jobs for ba­sic skill work­ers. That is the prob­lem of last two decades – to cre­ate jobs for work­ers with ba­sic ed­u­ca­tion and skill level. Mi­gra­tion is not a cause for that. Such jobs are dis­ap­pear­ing. That also was main rea­son why “Brexit” vote did take place. Just one ex­am­ple - wide use of ro­botic weld­ing has im­proved process qual­ity, re­duced need for welder jobs, but cre­ated new jobs in ro­botic weld­ing en­gi­neer­ing. This is a prob­lem of life­long learn­ing.

Last year, Hansama­trix cel­e­brated its 15th year an­niver­sary.

Hansama­trix has be­come a pos­i­tive force for the 21st cen­tury knowl­edge-based econ­omy, re­gional com­pet­i­tive­ness de­vel­op­ment, and en­vi­ron­men­tal pro­tec­tion.

Il­mars Os­ma­nis is the CEO of Hansama­trix.

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