The Founding of Triconex

Triconex was founded in September, 1983 with a business plan to build a Programmable Logic Controller  (PLC) that would serve as a safety shutdown system for factories.  The PLC would incorporate a technology in the public domain, called Triple Modular Redundancy (TMR).  The primary target market was the petro-chemical industry, particularly refineries and other plants where an accident would cause major damage.  The PLC was designed to safely shutdown a factory when an accident occurred, thus preventing further damage.  

The founders, Jon Wimer, Brad Bylund, and Roy Aldridge, envisioned building a PLC that would charge a 30% market premium over a competitor's offering.  Customers would pay a premium because the flagship product, called the Tricon PLC, would be tested and certified to the highest level of integrity and thus a customer could justify the initial expense for a higher level of safety.

The lead founding member of Triconex was Jon Wimer, who was a sales Vice-President of August Systems, which had been the original vendor of TMR technology for safety system.  August Systems was founded in 1978.  By the early 1980's, several marketing surveys were predicting a growing market using TMR technology for safety systems.   Joining August Systems in the market were Triplex and then Triconex.

Among the marketing surveys written was one by Peter Pitsker, an automation industry veteran with a chemical engineering degree from Stanford.   Mr. Wimer read Mr. Pitsker's report, and the two of them wrote a business plan to pitch to investors.   A Los Angeles based venture capitalist and USC professor, Chuck Cole, read the plan and liked it.  Mr. Cole  had started a VC firm, with two partner name, Julian, Cole & Stein with two partners.  Mr. Cole convinced his personal attorney, Richard Riordan, a future two-term mayor of Los Angeles, to invest the initial 50,000 in the firm.   Mr. Cole's fund invested another 50,000 and Triconex had its initial startup capital.  Mr. Wimer would have to raise more money for the startup, and raising money proved to be one of his strongest talents.

Triconex began operations in Santa Ana, California in March, 1984.  Twenty people, mostly engineers took their places in a sparsely furnished office and hovered over two prototypes of the Tricon.  Among the early engineers were Bill Chile, who has been working in Alaska, Jerry Cuckler, a QA analyst from the local aerospace industry, software engineers Glen Allerman and Phil Huber, and hardware engineers David Smith and Gary Hufton.

By February 1986, the company was foundering, running out of cash and had yet to sell a single system.  Impatient board members, led by Chuck Cole, forced the company to re-organize or lose funding.

What did Triconex do to survive?   Just five years after nearly being forced to close, it was listed by Business Week as one of the fastest growing small companies in America in 1991.  The Tricon controller was firmly established as a market leader.  Triconex was expanding international operations and attracting more investors to fund growth. 

Who became the new CEO in 1986?  Why was he chosen?  Why did investors allow the company to continue?  What steps did the new CEO take to make Triconex a market leader?  Common sense rules that any business should adopt, especially in today's uncertain business climate with a rapidly changing geo-political landscape.