Digitally Evolve Marketing for High Tech Products Interview with Phil Davies, Vicor Corporation.

Sure. So Vicor, as you probably know, is a power-only company. We specialize in power delivery. The company's been around for a long time, established in the early 80s. We were the pioneer of the DC-DC converter brick, which pretty much everybody in the industry has copied, and that market has really gone to more of a commodity type place with DOSA and POLA pinouts where people copy each other's pinouts. Vicor is not really known for a commodity product. The fun thing for me about the company is the technology and innovation that Patrizio Vinciguerra, our CEO, really brings to the table and drives the company on. He's constantly inventing and creating and coming up with new power architectures, power switching topologies, control systems. The creativity that's gone into the packaging of our power products is just incredible, it's amazing. We have a factory just four miles down the road from here that makes our chip products, our DC-DC converter products, and it's an exciting place to visit. I go down there and see the new packages that are being developed and manufactured. So for me, I'm right in the thick of being part of technology and innovation, and solving our customers' toughest power delivery challenges. That's the exciting part of what we do.

So we have different channels to customers. Let's deal with what I call our five layers of growth strategy that I put together for the company ten years ago. The first layer is our existing customer base. Those customers have been very loyal to Vicor, buying our bricks for over 30 years now. That customer base is about 12,000 customers worldwide, and the majority outside North America are serviced by distributors. As we come forward with new products and new technologies, we do a lot of communication and marketing to the channel, the big distributors, and also to local distributors. We sell through a channel, so you've got to get the sales guys at the channel excited about selling Vicor and knowing how to sell Vicor. We do a lot of work messaging, communicating, training. We have a sales tool that they use so they can be effective in front of our layer one customers and talk about the new products, not just bricks. Layer two is the new customers we want to come to Vicor because we want them to purchase our advanced products, the leading edge products. In many cases, the distributors are playing a big role there too, helping bring us customers that we don't sell to today but they sell to through all the different lines they carry. They bring those customers to us, and we engage on finding the right match for Vicor because again, we're not selling commodities. We're looking for customers that have tough power delivery challenges, need density, efficiency, very high power in a small space. Our layer three strategy is big vertical markets like data center, artificial intelligence, automotive, satellite constellations, markets we've just entered. So we're looking for very big vertical markets with big players like Google, NVIDIA, General Motors, Mazda, Honda, those types of companies we want to engage with. Layer four is about new product introduction and the processes around that. Layer five is our brand: who is Vicor? We've been trying to move our brand from a brick supplier. Ten years ago if you asked anybody about Vicor, they'd say 'brick company, high priced, military, aerospace, defense.' Today, if you ask many customers, they'd say 'high performance analog semiconductor power module company, competing with TI, Analog Devices, Linear Tech, Maxim, Renesas.' So we're moving the brand to a different place. That's our five layers of growth strategy. We go to market through the channel and very direct with FAEs and sales people spread amongst 15 offices worldwide that we call TSCs, Technology Sales Centers, because we are selling technology. Everybody's pretty much an engineer with a strong engineering background, and we've got very strong FAEs and labs in our offices to support customers. So that's how we go to market. Sorry, long answer to your question, but hopefully that explains it.

Back when I came from... I had a couple of stop-off points, but I really came from Analog Devices. That's been the majority of my background in terms of growing as a marketer, as a sales guy, how to work with customers, how to work with people and get the best out of people. Analog Devices was my really formative years for building my capabilities as a VP if you like. Analog was built on a foundation of technology and innovation. Ray Stata, his background and capabilities, and he and Patrizio have many similar traits. That's what attracted me to Vicor. When I first met with Patrizio, I could see his commitment and dedication to technology and innovation, just like I'd experienced and seen with Ray at Analog Devices. Two great guys, two amazing contributors to the technology in the semiconductor industry. So that's really what got my attention and got me excited about coming to Vicor.

That's right, yeah, 20 years. Yes, we just hired David Krakow. He came from Analog Devices. David and I worked together for many years there. As Analog has done its acquisitions, Hittite, Linear Tech, and now Maxim, there are people who decide it's not the right place for them and want to join maybe a smaller company and be more effective. I was fortunate enough to pick up David there, who had decided to take on a new challenge. I have probably another three or four ex-ADI guys that I work with at Vicor in different positions. Again, the same reason I joined, they joined: technology and innovation and a commitment to doing things differently and selling a product that is not easy. Selling a customer on changing what they do today to something completely new, having a different approach, a different supplier, is not easy. It takes a long time, but it's hugely rewarding when that happens. And then that customer is typically joined at the hip with Vicor for quite a while because they've made a big commitment to a new approach, a new way of doing things. You form really long-term relationships with customers, and that's a great thing too in terms of the human interaction, the human side of it. So yeah, that's a wonderful thing. Very similar to what happened at ADI.

Oh boy. I think for me, it's always been about... I love conversation. I love talking with people, and I love the whole aspect of exchanging views and ideas and opinions if you like. I have a set of opinions, they're not always right, but they're my opinions. I also feel that when you have a technology and a company, you're obviously trying to project that to the world and to a very individual point of view at the customer level, talking to engineers and management teams and so forth. Those conversations are really the fun part of the job, interacting with people and engaging with people. I've always enjoyed that part of it. Marketing and sales, that's the perfect way to do that. As an engineer sometimes, you're stuck in your lab with your head down working on something, it becomes very individualistic in some ways. But being out there, visiting customers, seeing their world and their challenges, marketing and sales gives you that great opportunity. It must have a really extroverted character trait?

So what are your views about how digital media has affected marketing in the sense that I've seen certain firms, especially agencies more than the brand side, having a lot of analytical people sitting around to figure out the most optimal way to send out a campaign and all the usual digital marketing elements that have come in over the last 10, 15 years?

Yeah, because from what I've heard from our teams working with Vicor, a lot of the metrics used to calculate whether a campaign is successful or not have improved a lot over the past six months. It used to be more about effort, but now the tracking of results and how the whole analytics are running on Vicor's website is pretty good. So that's a good start.

And another question: over the last 30, 35 years, how have you seen the marketing for high technology kind of change? How have you seen that evolution?

Yes. I've seen Clubhouse, the app from last year, the new social media app. Over the last one or two months, I've seen a lot of electronics engineers get on board, having discussions about different components and sometimes on the development side, but sometimes on the hardware side as well. Any plans by Vicor to build communities on networks like these?

All right. So when you measure all these campaigns across the world and the regional campaigns as well, any set of metrics used to measure whether they're winning or not? Is it entirely on the buying angle or a mix maybe visits to the website mixed with actual purchases or engagement with Vicor support?

When your teams interact with different partners or even when they run direct ads on Google or LinkedIn, how is there a polished way to convey your target audience so that media partners don't confuse it with the regular entire spectrum of electronics and embedded system engineers, but maybe just the subset that is closer to the kind of engineers that can actually influence a buying decision for your modules?

How successful are maybe from the last 10 years our engineer turned marketers at the copywriting stage or helping to create the pieces of communication used to convey this?

All right. Okay, so I think those are almost all the questions I've had. Just one last question, but it's quite a serious one. Okay, so which song best suits your work ethic?

Right, okay. So that's it. It was nice speaking to you, Phil.

Sure. So Vicor, as you probably know, is a power-only company. We specialize in power delivery. The company's been around for a long time, established in the early 80s, the pioneer of the DC-DC converter brick, which pretty much everybody has copied in the industry. That market has really gone to more of a commodity type of place with DOSA and POLA pinouts where people copy each other's pinouts. Vicor is not really known for a commodity product. The fun thing for me about the company is the technology and the innovation that Patrizio Vincenzelli, our CEO, really brings to the table and drives the company on. He's constantly inventing and creating and coming up with new power architectures, power switching topologies, control systems. The creativity that's gone into the packaging of our power products is just incredible, it's amazing. We have a factory just four miles down the road that makes our chip products, our DC-DC converter products. It's an exciting place to visit. I go down there and see the new packages that are being developed and manufactured. So for me, I'm right in the thick of being part of technology and innovation, and solving our customers' toughest power delivery challenges. That's the exciting part of what we do.

We have different channels to customers. Let's deal with what I call our five layers of growth strategy that I put together for the company ten years ago. The five layers are the following. Layer one is our existing customer base. Those customers have been very loyal to Vicor, buying our bricks which we've sold for over 30 years now. That customer base is about 12,000 customers worldwide, and the majority of those customers outside of North America are serviced by distributors. As we come forward with new products and new technologies, we do a lot of communication and marketing to the channel, to the big distributors, and also to a number of local distributors. We're selling through a channel, so you've got to get the sales guys at the channel excited about selling Vicor and knowing how to sell Vicor. We do a lot of work messaging, communicating, training. We have a sales tool that they use so they can be effective in front of our layer one customers and talk about the new products, not just bricks. Layer two is the new customers that we want to come to Vicor because we want them to purchase our advanced products. These are the leading edge products, and in many cases the distributors are playing a big role there too, helping bring us customers that we don't sell to today but they sell to through all the different lines they carry. They bring those customers to us and we engage on finding the right match for Vicor, because again we're not selling commodities. We're looking for customers that have tough power delivery challenges, they need density, they need efficiency, they need very high power in a small space. Our layer three strategy is big vertical markets like data center, artificial intelligence, automotive, satellite constellations. We're looking for very big vertical markets with big players like Google, NVIDIA, General Motors, Mazda, Honda. Layer four is about new product introduction and the processes around that. Layer five is our brand. Who is Vicor? We've been trying to move our brand from a brick supplier. Ten years ago people would say brick company, high priced, military, aerospace, defense. Today many customers would say high performance analog semiconductor power module company competing with TI, Analog Devices, Linear Tech, Maxim, Renesas. We've moved the brand to a different place. That's our five layers of growth strategy. We go to market through the channel and we go to market very direct with FAEs and with sales people that are spread amongst now 15 offices worldwide that we call TSCs, Technology Sales Centers, because we are selling technology. Everybody's pretty much an engineer, everybody's got a very strong engineering background, and we've got very strong FAEs and labs. We've got really great labs in our offices to support customers. So that's how we go to market. Sorry, long answer to your question, but hopefully that explains it.

Back when I came from Analog Devices, that's really been the majority of my background in terms of growing as a marketer or as a sales guy, how to work with customers and how to work with people and get the best out of people. Analog Devices was my really formative years of building my capabilities as a VP. Analog was built on a foundation of technology and innovation. Ray Stata, his background, his capabilities, he and Patrizio have many similar traits. That's what attracted me to Vicor. When I first met with Patrizio, I could see his commitment and dedication to technology and innovation just like I'd experienced and seen with Ray at Analog Devices. Two great guys, two amazing contributors to the technology in the semiconductor industry. That's really what got my attention and got me really excited about coming to Vicor.

That's right. Yes, we just hired David Krakow. He came from Analog. David and I worked together for many years there. As Analog has done its acquisitions, Hittite, Linear Tech, and now Maxim, there are people who decide it's not the right place for them and want to join maybe a smaller company and be more effective. I was fortunate enough to pick up David there who had decided to take on a new challenge. I actually have probably another three or four ex-ADI guys that I work with at Vicor in different positions. Again, the same reason I joined, they joined: technology and innovation and a commitment to doing things differently. Selling a product, it's not easy what we sell. Selling a customer on changing what they do today to something completely new, having a different approach, a different supplier, is not easy. It takes a long time, but it's hugely rewarding when that happens. That customer is typically joined at the hip with Vicor for quite a while because they've made a big commitment to a new approach, a new way of doing things. You form really long-term relationships with customers, and that's a great thing too in terms of the human interaction, the human side of it. It's very similar to what happened at ADI.

I think for me it's always been about conversation. I love talking with people. I love the whole aspect of exchanging views and ideas and opinions. I have a set of opinions, they're not always right, but they're my opinions. When you have a technology and you have a company, you're obviously trying to project that to the world and to a very individual point of view at the customer level. You're talking to engineers and management teams. Those conversations are really the fun part of the job, interacting with people and engaging with people. I've always enjoyed that part of it. Marketing and sales, that's the perfect way to do that. As an engineer sometimes you're stuck in your lab, your head's down working on something, it becomes very individualistic. But being out there visiting customers and seeing their world and their challenges, marketing and sales gives you that great opportunity.

Yes, you have to have that a little bit of an extrovert. The introverts don't do well in sales and marketing. Although FAEs, I've seen some introverted FAEs and sometimes they're really good, but it's tough to get them to project in front of a customer, which you need them to do sometimes. But you have to have that extroverted side and enjoy people and enjoy conversation.

I would say that is one of the areas where Vicor has to really grow its capabilities. We've done a reasonable job of it, but that was one of the reasons for bringing in David from ADI, because he's been heavily involved in digital marketing and using digital media. I'm excited about what David is doing. He's only been here four or five months, but he's already started putting plans and changing the way we look at that, looking at new tools that we can use. That's a full force effort by him to change that. That's one of the reasons I wanted to bring him in, to bring someone with that capability and experience. That is huge for us in terms of an open field for us to really do much better in getting our brand out there and getting information out there to customers who haven't really thought of Vicor or using our power modules. So many young engineers are using that as their source of information, we have to really step up our game in that area. I'm looking forward to seeing that evolve.

Yeah, exactly. He's looking to strengthen our team as well by bringing in some new people with skills that we are missing. Bringing in people who have done it before and understand how to get it done is going to move us faster. I think the team will benefit from that and help grow their skills and capabilities. That's a big commitment from us over the next number of years, digital marketing and digital media.

That evolution has been very interesting. Unless you tie that evolution to the buying journey of your customer, the journey that your customer goes down to make a decision from the start of a project to the selection of all the different components, architectures, and performance of the system, if you look at that journey, it has changed dramatically. It's an enormous change for our customers. As a marketer, as a salesperson, you have to map your company to that buying journey. We call it a buying journey even though it's not buying, people doing it, policy purchasing is involved, but it's engineers and marketing and sales of end customers. That has changed enormously over the last 10 or 15 years. As a person involved in marketing and sales, I've been involved at ADI and now at Vicor mapping the company to that journey and trying to provide solutions to the customers' tough problems. You really got to identify the problems they are facing in that journey and try to offer value from the very beginning to the end. Because of digital media, because of the internet, all the data suggests that most engineers, most companies, are 60% down that buying journey before they even contact a company. They're doing their research online, looking at what's out there, talking to people. They're about 60% of the journey before they even contact you. Then when they contact you, you're one of like three to five companies they're contacting, so now you're in a bake-off. You're trying to pitch your product at that point of 60%. As a marketing sales guy, I don't want to do that. I want to start right up here. I want to be influencing and providing solutions and challenging the thought process of why change and why Vicor at the very beginning of that journey. The further up I can come, the better chances I have that I'm going to get selected further down that journey. Knowing and recognizing that and understanding that allows us to map our sales and marketing strategies to that journey and how that's changed and where engineers and companies are getting their information from. I think the most successful companies going forward will be the ones that not only have the technologies but do that the best.

Yes, we've talked about that. One of the places in the world where communities are very strong is China. We noticed that with WeChat, for example. The evolution of that in China has been a huge success for us. We've seen our brand in China grow quite rapidly because we targeted that WeChat area and the communities that have set up off of that in other areas. So yes, absolutely. That's again another area that David is looking at, working with our regional marketing people. One of the changes we made about eight years ago was all the marketing was done from here, it was centralized. We recognized early on that you've got to have marketing resources in the region, swimming with the culture, with the channels, with the way people are communicating and understanding that. If you look from China to India to North America to Europe, even countries in Europe, they're doing things differently. You have to be in there swimming with the people and understanding those things so you can adapt how you message, how you market, and how you sell. We pushed that out to the regions and established these sales offices and also staffed those sales offices with marketing people that have that DNA of how to message, how to position, and how to brand to the target customer base. That's something we're going to continue to do, find the right platforms for us to get our message to those communities. It's something we learned early on in China.

That's a great question, really insightful. I think all of those things. In terms of looking at metrics, metrics are very important all the way from how we look at what we call funnels, from opportunities to what we call a project registration where we are registering a project that we want to put resources on. It depends where in that buying journey that project is. Sometimes it's so far towards the end that I'm just giving a price, and that's not good. Some of them are very early on, and that's where we want to be. We're tracking those funnels, looking at metrics across the funnel. To your point, we're looking at website traffic, trying to look at what companies are coming to our website that can then map to those projects we have. We're looking at customers within the website that map to campaigns we're running. For example, we're going to be looking at a robotics campaign in Q1, we're running it now. We want to look for robotics companies coming to our website or even contacting our sales offices or our distributors. We've got a whole stack of things that we're going to be improving on in terms of looking at data so we can fine-tune all of these different pieces, all the different resources and skill sets we have, and how we position, message, and brand the company. Great question.

Another great question. That's an area where we've got a lot of work to do. I think that's a very important next step for us, to really hone in how we're going to market. We've moved from being a brick supplier with 10,000 to 12,000 customers. Those are not commodity products by any means, but we have thousands and thousands of part numbers, different input voltages and output voltages. We've moved the company to being more application specific standard products, but application specific products looking at different power delivery networks in an automobile, electric vehicle, hybrid, or a data center using an Intel processor or an AMD or even a GPU or an ASIC. We're mapping power delivery networks and looking at where we can intersect with our technology roadmaps. The piece that's going to be critical is identifying decision makers and influencers in companies that haven't looked at building power delivery networks with power modules. That's the biggest market for us to grow into, the discrete and controller market where Linear Tech and those guys, Infineon sells a ton of discrete switches, Linear Tech and Maxim sell a ton of controllers. Engineers across many companies and markets and continents are still using discrete components instead of power modules. We want to get the message to those guys: don't do it that way, do it this way. Getting across the value of doing it that way is really important because the why change and then why Vicor is a big deal for these customers who've done it a different way and been very successful. All the infrastructure that's there to support the different way, just think about the supply chains set up in a big company like Ford, Continental, NVIDIA, or Google to support 12-volt components that are used today. The industry is moving to 48 volts and even higher, so there's a whole new supply chain infrastructure that has to be built. It isn't just picking a micro product, it's the complexity of that. The decision making has gone from one or two engineers to typically a buying team of eight to ten people, and you've got to get them all on your side to make the decision of why Vicor in my vehicle. It's really complicated and complex, so you have to come at it from lots of different angles.

Not very good. Because engineers typically, the people we work with to create content, I end up personally loving writing so I love doing a bunch of editing. Typically what I get to edit is very product centric, all about the product, about amps and volts. You have to take that and build on it in terms of saying okay, now what problem does that solve? What value can that add? What does the power delivery network look like from your power source all the way to the point of load? You've got to somehow convey that power module technology in that space, but talk about it. You got to mention the volts and the amps a little bit about what it can do, but it's really about changing the way you do things and getting that message across. Typically engineers are not great at that. But as they get more and more involved with creating what we need, they start to grow and develop. I'm getting less and less editing to do now than I did at the very beginning. It's getting much better, but at the very outset it was not good.

The thing about me is I like all sorts of different music, all the way from the opera, Pavarotti, all the way to The Who, Springsteen. If I think about any song, I think anything that has lyrics that talk about life and how people and humans interact with each other, the relationship type of songs, the songs that talk about love and friendship and happiness. I just love happy songs.

You too, Dylan. You too. Always. Good stuff. Thank you. All the best.