Dr. Rama Rao

RRCM


EXCEL

Financial Physics

financial physics

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As seen September 14, 1992 in

Long Island Business News


Close Up

Dr Rama Rao:
A Practical Dreamer
Dr Rama Rao came to the US in 1979 to earn his PhD in physics at the University of Illinois at Chicago, because he felt he could "learn more here than in 15 years" in his native India. But he also had a dream of starting his own high technology company, developing and manufacturing laser products for industry and commercial use. That dream is a reality, and he is now CEO of Excel Technology (OTC, Holbrook).

Excel made news in March as the "little fish swallowing the big fish," when it announced its intention to take over Quantronix (OTC, Smith-town), a $29-M company. Excel's reported sales in 1991 were $250,000. Dr Rao said he was drawn to Quantronix for its manufacturing abilities and customer base, while Quantronix could benefit by Excel's high technology laser products and energetic leadership. Shareholders are expected to approve the takeover Oct 1.

In 1986, Dr Rao tried and failed to get the backing of NYC financial institutions because of his lack of experience, but with the encouragement of his wife, Triveni, who also has a PhD in physics, he pursued federal agencies, including the Small Business Innovative Research Program and the National Aeronautics and Space Administration, to get $1-M in start up funding to develop his idea for a multiple-use laser product that could be used for a variety of medical and other functions. "Hospitals were paying $100,000 for just one of the laser systems," Dr Rao said. Seeking funds to market the product, Excel went public in May 1991, raising $4-M.

Excel is now ready to market a new product, a dental laser that will reduce pain and is non-invasive, an important consideration in AIDS prevention. The US market for the product is estimated to exceed $100-M by 1995. Rao has developed a financial package to make the $30,000-$45,000 product attractive to dentists.

When speaking of his "dream" and the future of his company, Dr. Rao likens Excel to Computer Assoc. (NYSE, Islandia), a $1.4-B company whose CEO Charles Wang also began on a shoestring. Although Excel began in a garage, Dr Rao hopes to steer its growth into a $100-M company in five years. "I hope I have the courage and strength of Charles Wang."

His management style lies in finding the right experts, with the "passion and belief and desire to be winners." With the dental laser comes an expansion into commercial uses, from the current scientific/industrial base. Dr. Rao anticipates that each division of the new company will be headed by one such expert, who will then be responsible for promoting that division's products. "This is a third wave of management generation, and they're not content to sit back and collect bonuses. They want to be apart of the growth;" Dr Rao said.

LI is Excel's base of operations because of the positive atmosphere for high technology companies, with the proximity to Grumman (NYSE, Bethpage), Brookhaven National Laboratory (Upton) and SUNY Stony Brook, according to Dr Rao. The second factor is the human one. LI has a technical workforce, one that, in Dr Rao's view, has the loyalty and stability necessary to build a high technology company. With the 200 Quantronix employees and Excel's 12, he hopes to add another 200 to the staff when the dental laser takes off. - ABB