Impinj, Riding Wave of RFID Resurgence, Looks to Double Sales, Add 20 Employees

10/13/10Follow @gthuang

As a reporter, you can tell when the innovation economy tide is turning, when a particular sector is rebounding, or when certain companies have turned the corner. How? Because all of a sudden CEOs want to talk on the record, PR people are your best friends, and marketing and real estate guys chat you up about the field at random events.

That’s the feeling I’m getting about radio frequency identification (RFID) these days—and I’m getting it from both coasts. The field of RFID comprises tags, readers, and software that, together, enable wireless communication via tiny embedded chips so people can gather information about everything from the location and status of product inventory on shelves to runners in a marathon. A couple of months ago, I profiled ThingMagic, a 10-year-old Boston-area RFID company founded by MIT Media Lab alums, whose time appears to have come, thanks to fortuitous changes in the market.

ThingMagic’s sister company in the Northwest is Impinj, a 10-year-old Seattle RFID tech firm founded by University of Washington professor Chris Diorio. Impinj is a bigger company than ThingMagic—and has raised much more venture capital—but both startups survived the RFID-for-retail-supply-chain-tracking hype around 2003-2004 (and the ensuing crash) and lived to tell the tale. The firms have worked together on RFID reader technologies, with Impinj selling its reader chips to ThingMagic. Now they and a few other survivors and competitors, including San Francisco Bay Area-based Alien Technology, are poised to make some bold moves.

I spoke with Impinj CEO Bill Colleran by phone last week to hear about the company’s progress, and some interesting new challenges ahead. One thing that grabbed me was how much the competitive landscape in RFID was decimated by the early hype and glacial adoption of the technology—plus the economic recession. That now leaves Impinj with relatively few competitors. “There’s been a shakeout along the way,” Colleran says. “We’re in a great position to grow as this industry takes off.”

And take off it apparently will, across sectors like consumer electronics, automotive, healthcare, and apparel and other retail applications—finally. “RFID has experienced a resurgence in the last year or so,” says Colleran. “The common theme is the technology has continued to move along—performance is dramatically better, and cost has come down…It’s a maturing of the technology and ecosystem. We’re seeing wholesale adoption.”

That’s easy to say, of course, but here are some stats to back it up. Impinj says it will ship as many RFID tag chips in the second half of 2010 as it has in the previous five years combined. It is also seeing “significant growth” in sales of its RFID readers and reader chips. The company is on track to increase revenue by 50 percent over last year, and is projecting 100 percent growth from this year to next year, Colleran says.

With these projections comes a new round of strategic hiring at the firm. Impinj went through a round of layoffs in the spring of 2009. But now it is hiring to fill about 20 open positions in Seattle, Colleran says. The company has just over 100 employees, down from about 130 in February of last year.

A few specific areas of growth for Impinj (and also companies like ThingMagic, which had 32 employees as of August): retail stores such as Wal-Mart, Bloomingdales, Macy’s, and Levi’s say they will do inventory tracking of individual items of apparel to reduce the need to overstock items on shelves; apparel shops want to provide smart recommendations to customers in dressing rooms, based on what they are trying on; and Coca-Cola is doing marketing tests of different beverage flavors using RFID-enabled dispensing machines (a project developed in partnership with DEKA, the New Hampshire-based company run by inventor Dean Kamen).

So, if RFID applications do explode, could Impinj become the biggest tech success story out of Seattle since Amazon.com? That remains to be seen, but there are a few parallels—including being a strong survivor of a recession, and having compelling and unique technology in a reawakened market. Much of the company’s future will be determined by the strength and character of its leadership team. (So long as they keep talking to the press, so good.)

From where Colleran sits, the hardest thing about the past few years clearly was
“weathering the storm with the economic downturn from last year, coupled with the fact that RFID hadn’t crossed the chasm of mainstream adoption,” he says. Now the company’s challenges are all about expanding smartly while continuing to do the crucial daily work of running a business. “How do you move from shipping tens of millions of units per quarter to billions of units per quarter?” Colleran says. The company needs to “do it in a measured way, but we’re also bursting at the seams.”

It doesn’t sound like an exit is in the cards anytime soon. “The vision hasn’t changed. We’ve been focused on building the best company we can,” he says. “Liquidity events will present themselves. Those opportunities look a heck of a lot better than they ever did. That doesn’t mean we do things differently. The magnitude of the exit opportunities get better all the time. Our investors are patient. They say, ‘What’s the best long-term decision from where we stand today?’”

To that end, Impinj has a wry sense of the future that could serve it well. “We are crossing the chasm, and we see this tornado of growth ahead of us,” Colleran says. “Thank god it’s finally here—now be careful what you wish for.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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