Ex-Cyras CEO Joins Roshnee Spinoff
After resigning as CEO of Cyras Systems Inc. (see Cyras: Crisis? What Crisis? ) in September -- claiming geographical incompatibility between his Boston home and the company's Fremont, Calif., headquarters -- how could he justify his recent emergence as chairman of startup Inara Networks Inc., also based in Silicon Valley?
"It's a much different situation," said Pearse, who was reached via phone -- at his office in Boston -- this week. In addition to explaining the seeming occupational contradiction, Pearse also shed some light on the latest chapter in the history of the company once known as Roshnee Corp., which has since split into two concerns: San Jose-based Inara is developing an optical system for use in metro networks; while Kanata, Ontario-based Optovation (run by optical startup legend-turned-VC Rajvir "Raj" Singh -- see Fiberlane Founder Finds Another Startup) is turning out components.
According to Singh, who is "acting" CEO of Optovation, the companies are busy completing a round of funding, and plan to make some official announcements about financing, staffing, and product direction soon. Roshnee, which attracted $11 million in funding last March (see Roshnee Raises $11 Million in Financing and Assembles Team), was split in September (see Roshnee to Split in Two), echoing the now-legendary breakup of an earlier Singh startup, Fiberlane Communications.
Fiberlane split three ways in 1998, with two of the resultant startups, Cerent and Siara Systems, selling for a combined total of more than $11 billion in the following year (Cerent was bought by Cisco Systems Inc. [Nasdaq: CSCO], Siara by Redback Networks Inc. [Nasdaq: RBAK]). The third piece of the Fiberlane pie was Cyras, which was bought by Ciena Corp. (Nasdaq: CIEN) in December for 27 million shares of stock, worth $2.6 billion at the time the deal was announced (see Ciena To Buy Cyras for $2.6 Billion).
Though the Roshnee effort appeared to be sputtering in August, with some key executive departures (see Raj Singh's Sour Note), Singh says things at both Optovation and Inara are now humming along.
"In two weeks we should have a lot more to say," said Singh in a phone interview. "Everything [related to the Roshnee split] is going well, better than I thought."
That includes the drafting of Singh's longtime friend Pearse as chairman of Inara, which plans to build optical switches for the large-carrier market. With fewer than 60 employees spread among several locations, Inara is as different from Cyras as, well, day from night.
"As chairman, I don't have to be there [San Jose] every day," Pearse says, unlike Cyras, which he said had a philosophy of "Fremont or die." According to Pearse, his original deal was to be Cyras's CEO for a year, helping aim the company toward an IPO but not staying there to see the offering completed.
"My whole deal was to stay with Cyras a year, and it was going on 15 months," says Pearse, who left the company somewhat abruptly last September. Though Cyras's expected IPO eventually morphed into the Ciena buyout, Pearse says the possibility of a pending public offering hastened his departure.
"As CEO, you can't take a company through an IPO and then leave soon after," Pearse says. "You'll get sued. But you can leave beforehand, so I did."
According to the 42-year-old Pearse, who has three children in high school, being an absentee father wasn't an attractive option. "My kids didn't like it, and they're big enough now to beat me up," he jokes. "So I couldn't force them to move, even if I wanted to."
Inara, Pearse says, has been set up to encourage multi-location operations. While most of the hardware talent will work out of the San Jose headquarters, the company already has a systems integration unit operating out of Denver, as well as some optical engineering workers in San Diego.
Though he wouldn't comment on product specifics, Pearse says Inara will be building switches for use by large carriers.
"If you're targeting CLECs, you're dead," he says. "And if you're going after big carriers, your company better be run by people with back doors into the RBOCs or players like Level 3 [Nasdaq: LVLT]."
Pearse -- who has a long history of selling to large carrier customers during career stints at Nortel Networks Corp. (NYSE/Toronto: NT), Bay Networks, and Sprint Corp. (NYSE: FON), among others -- claims he and Inara president Mohammad Fahim -- previously at MCI (now a part of WorldCom Inc. [Nasdaq: WCOM]), Enron Corp. (NYSE: ENE), and Sprint -- "know all the chief engineers" at the large carriers, which should help the company when it has product to sell.
Those yet-undefined systems will likely be using components from Optovation, a components play that is also mum on product specifics. Singh, who brought most of the remaining Roshnee executives with him to Optovation, says the company will license component technology to Inara, while also owning a percentage of Inara.
According to Singh, Optovation now has 35 employees, while Inara "should have 60" by the end of January.
Inara's planned growth, Pearse says, should be helped by its multi-location strategy, which he says is a must for startups competing in the tight talent market.
"To get big fast, you have to use more locations -- to go where the talent is," Pearse says. Including letting the chairman work from Boston if he wants to.
"This job lets me focus on what I'm really good at -- building a company and building relations with carriers," Pearse says. "It's a much better situation."
Pearse is also helping found another optical startup, the not-so-nimbly named Akroria Networks Inc., Los Altos, Calif., which is designing lambda switches. According to Pearse, Akroria is Greek for "sunlight," or so he thinks. Inara, meanwhile, is possibly Persian for "light," though neither Singh nor Pearse know for sure.
"All I know is that soon we're going to run out of languages for company names with 'light' in them," Pearse says.
-- Paul Kapustka, Editor at Large, Light Reading http://www.lightreading.com