The Telltale Sign

Startups need to keep up appearances -- as Optical Switch Corp. has just discovered UPDATED 8/1 8AM

July 31, 2002

5 Min Read
The Telltale Sign

Over the past couple of days, Light Reading has been playing a little game of cat and mouse involving an anonymous reader and components startup Optical Switch Corp.

It started on Tuesday, when our Concerned Reader sent us this message:

  • I noticed the other day that the sign on the Optical Switch Corporation building in Richardson had been painted over. Did another one bite the dust?

We checked. "We're not closed down. We're just in the process of redoing our sign," said Cathy Edwards, corporate communications spokeswoman for Optical Switch.

Concerned Reader's response read:

  • They must be re-doing the cars, too. In general, there have been 15-20 cars in the parking lot. Since the sign got painted over, there have been an average of 3.

Followed by:

  • When I went by the office this morning (at 9:30 AM local) there were 6 cars in the entire parking lot. None of them had been "redone" in the same plain white that the sign was.

Edwards patiently explained: "When it's 105 degrees, everybody tries to park in the shade. We're all bunched up around the back of the building."

Concerned Reader then came up with a new development:

  • Cathy was right, they were just redoing the sign. It now reads "Maverick Commercial Real Estate." Seems like a change in business focus, at least...

Bingo! Edwards passed the buck upstairs. Upstairs explained that Optical Switch Corp. had dumped its various efforts to develop optical switches (see Optical Switch Comes Into the Light) and is going to focus on applications for its anti-reflective coating technology, some of which may not be for the telecom industry.

As a result, Upstairs is looking for a new company name, and hasn’t found one yet. The company has laid off staff – Upstairs professes not to know how many – and the new sign is an attempt to sublease a large expanse of office space that‘s surplus to requirements.

A similar thing happened a few months ago to Alidian Networks Inc., when it moved its premises. Alidian's phone went unanswered for several days and its Website was unavailable, leading to speculation that the company had gone bust or gone into hibernation – which it hadn't. Once the story appeared on Light Reading, Alidian's executives crawled out of the woodwork to set the record straight (see Alidian Networks: Lost and Found!).

All of this demonstrates the importance of keeping up appearances in these troubled times – when not answering the phone can literally put a company out of business in the eyes of the world. And there are plenty of other faux pas a company might commit that can send out the wrong signals (although, of course, it may also be the right signal).

We can't offer advice on how to spot the difference between a company that's drowning or one that's only waving. But we can offer our list of our favorite top ten "absent signs of life":

1. No one answers the phone: Always a bad sign, but the company in question may simply share Light Reading's local service provider, whose name may begin with a V (or the vendor may be Israeli, and it's Friday).

2. The company Website is unavailable: See No. 1... Although a far more common misdemeanor is forgetting to remove the Website when a company no longer exists, leaving it for Web archæologists to dig up in 50 years time.

3. No sign outside company HQ: Surely, no one's going to make that mistake again?

4. No one shows up for work: No cars in the car park (front or back) and no lights on in the building are never signs of robust health. One seemingly innocent explanation is that all the employees have mysteriously decided to take an extended summer vacation at the same time (or have been asked to take unpaid leave – see SpectraSwitch Takes a Holiday and Optical Companies Extend Holidays). Or it may simply mean the company has the most advanced automated manufacturing system imaginable, which doesn't require any human operators – that's Agility Communications Inc. story, and it's sticking to it!

5. Localized resumé spike: A laid-off employee has nothing better to do than advertise the fact that he's out of work, by bulk mailing resumés to other companies in the area.

6. Not turning up at tradeshows: Especially ones where the space is booked, the booth babes are hired, and the company is listed in the exhibition brochure – even if the general feeling is that the booths are overpriced and undertrafficked.

7. Not turning up at conferences: Big events are organized so far in advance that everyone is waiting for company X's contribution with bated breath and actually notices when it doesn't happen. A classic example is PMC-Sierra Inc.'s (Nasdaq: PMCS) long-awaited packet switching strategy, which was to have been unveiled at the Network Processors Conference late last year – if it hadn't dissolved its Internet Routing division a few days before the event (see PMC-Sierra Pulls Packet Silicon). And service provider Yipes Communications went as far as co-organizing the Gigabit Ethernet Conference in Santa Clara, Calif. But on the same day the notes went out to publicize the show, Yipes filed for Chapter 11 bankruptcy protection – and just to show it wasn't kidding, it pulled out of the show.

8. Telling journalists your company is about to make a significant announcement in the next few days/weeks/months, and then going completely silent: Germany's Aifotec did this (see Is Aifotec in a Jam?). Similarly, Optical Micro Devices Inc. (OMD) prepared Light Reading for a briefing, fell silent, and then ended up having its assets put up for sale (see UK Components Foundry for Sale).

9. Filing for Chapter 11: Sounds obvious, but it doesn't hurt to state the obvious. It's also worth pointing out that Chapter 11 isn't always followed by Chapter 7 – shutting the business down (see, for instance, Yipes Reborn – Amid Accusations).

10. Gossip – especially that posted on our message boards: As our exchange of messages with Concerned Reader and Optical Switch Corp. shows, where there's smoke, we often find fire, eventually. Keep the gossip coming!

— Pauline Rigby, Senior Editor, Light Reading

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