For Arbor Photonics, a Myriad of Reasons Not to Flee to the Coasts
When Phillip Amaya, CEO of Arbor Photonics, was first brought in to head up the advanced laser processing company, he said he had every intention of locating the start up in California. But Michigan’s aggressive approach to home-growing businesses and keeping them in the state changed Amaya’s mind.
“The state came through to help us out,” Amaya says of his decision to keep the company in Ann Arbor. “Their programs accomplished what they were intended to do.”
According to Amaya, because the company—which designs high-powered fiber optic lasers that are used to manufacture everything from microelectronics to defense equipment—isn’t in the “sweet spot” for most venture capital firms obtaining funding has been a challenge. “There’s a lot of firms that have scars from the telecom bubble where they invested in companies that had fiber optics or lasers in their names,” he says.
But the state’s economic development approach has helped to fill in the gap. Arbor Photonics has secured $2 million in funding from the Michigan through state-sponsored economic development competitions and other programs. Amaya added that he admires Michigan’s strategy for economic development, which focuses on developing businesses in the state and encouraging them to stay there instead of just incentivizing companies across the country to relocate.
And the approach seems to be working, Amaya says. He added that since the company’s founding in 2007 other startups as well as organizations such as Ann Arbor SPARK have provided Arbor Photonics with advice and even helped the company find its current location.
“Between the University (of Michigan), state economic development programs, and local VCs, it’s a very supportive environment for starting a business,” he says.
So far the company has raised $4.7 million, including the $2 million in state funding, and it plans to start shipping its products by the end of the first quarter of this year. According to Amaya, the company expects to make $30 to $35 million in sales by 2015 off of the technology that was originally developed by Almantas Galvanauskas, a professor of electrical engineering at U-M and VP of the company.
From the outside, Arbor Photonics’ headquarters—a few-room office and lab space tucked away in a nondescript industrial park in Ann Arbor—doesn’t seem like much, but before entering the lab visitors are reminded of the technology’s power with signs that read “Danger” and advise anyone stepping into the lab to put on protective goggles to shield their eyes from the lasers’ intense light.
Inside the lab, the fibers, which are about the size of angel hair pasta, are strategically coiled on tables and surrounded by post-it warnings. The light inside the small fibers can deliver enough power to manufacture LED screens, wafers for computer electronics, or laser defense equipment.
“This technology enables you to make the brightest lasers commercially available,” Amaya says, “and by brightness we mean power and the ability to tightly focus it.”
According to Amaya, the goal of the company is to provide manufacturers with “more watts per dollar” than any other fiber optic laser on the market.
“Our competitive advantage is purely technological performance,” he says. “More power means faster processing speed or the ability to process new materials that weren’t possible to process by traditional means.”
Fortunately for Arbor Photonics, the need for faster and more precise manufacturing technology will only continue to expand, Amaya says.
“As things get smaller your processes need to adjust,” he says. “If you pick up your iPhone for example every component in your iPhone is touched by a laser at some point in the manufacturing process.”