GH: You both have years of experience in the industry and the sector and seen many changes. What might be the top strategic priorities for Topcon Positioning Systems going ahead in this particular age of fast-moving technology?
Ivan: It's always been at the heart of our strategies to look at the market and what our customers need. This is our top priority and is certainly something that we will continue to do. We pay a lot of attention to how the market is evolving and where the customers feel the most pain in their workflows, in what they do, day by day.
Ray: We have to figure out how we can drive the cost of this new technology to a lower price point. And focus on the training and the capability of people to use this equipment and make it easier for them to use it. This is critical for the success of the business overall. There's not going to be any machines that don't have automation attached to them. So, as we go forward, we need to get the price and the training to where we need it to be. Every machine needs measurement equipment on it. Every machine. You need to know where the machine is all the time and what is the workload that the machine is doing.
Ivan: This will enable what we call the democratisation of the technology. Make it simple, make it at a cost for the customer that is affordable so that each and every vehicle can have one piece of technology. And for every company to have the services that come with it in their cloud environment. This democratisation of technology is making technology much more accessible to companies and to individuals who become much more efficient in their processes.
GH: How would you describe the culture you've helped create at Topcon Positioning Systems to
move forward these technological products and advances?
Ray: I've worked at Topcon for 32 years. We started as just a survey instrument company, but the dream and the goal was how do we take that technology and connect it to every machine so we can automate the work processes. We've had a tremendous culture of innovation, what we call TM1, to be the market number one. Bringing a unique technology to the marketplace and revolutionising the business, the process. We’ve had a tremendous culture of innovation, about solving the real problems in the industry related to measurement and all the new technologies that have come out in the past 10-15 years. And allowing that to drive price down. A big part of it is training and teaching people how to use the technology.
Ivan: You can see the precise results obtained by automating operations of machinery. This is really the strong element of our culture. To live a dream, to transmit this dream through engineering, through testing the parts, to the sales and marketing of these parts and then eventually to our customers and to the market in general. All in order to change the world.
Ray: I would also say we’re a little bit unique from a cultural standpoint. We grew this business up in Livermore, California, but we have a Japanese parent company with a lot of entrepreneurialism which is very helpful for us. We didn't have to get a return on investment in the first week or the first month or the first year. We were investing for the long term of the business. I think that stands us in good stead here at Topcon and helped create the culture that we have inside the business.
GH: What are these market changes that you've seen over the years?
Ivan: A customer will feel a pain. It's up to us to really understand what that pain is. We will consider what is redundant in what the customer is doing. What could be done better? The vast majority of the market tends to use what already exists to solve problems but they still feel the pain and they don't actually know how to fix it. They realise that they are doing something in a certain way and see how difficult it is. And we have to pick that up that and work with our product management team, with our engineers. This is something we have done very effectively: invented products that have really revolutionised a field because the products have been used to change the way customers do things. The litmus test of success is that if after they first buy and use that product, they continue to buy it. If customers never revert to the old technology, then this is a sign that we really interpreted what was their pain point.
GH: Do you see new market threats, new competitors entering the sector, disruptive technologies?
Ray: Oh, absolutely. We create this new technology, move it out into the marketplace and other companies see that it creates more business. There's always going to be followers. That's just a natural part of doing business. And we're very proud of staying on top of the technology. So, I think we're in great shape, even with more competition. To me, it's really good for the market and good for us as a business. It makes us stay sharp, but we have to be open enough to recognise and understand that we're not inventing every single solution. We see what competition is doing and we compete.
GH: How will you drive innovation and new ideas moving forward to meet these changing market trends and needs by the customer?
Ivan: We have an advanced research team and we have several activities inside the company that bring us innovation, flashes of what the future can be. At this moment we have more than 5,000 patents, of which around 2,600 are probably active and we continue to generate patents at a very high rate, like ten or so a month. That's an indicator of our high level of R&D.
GH: What are two of the biggest obstacles facing Topcon Positioning Systems right now and how will you overcome them?
Ray: One of the biggest obstacles for us is getting people who really understand the business and the installation rates of technology, how fast we can get equipment on machines, that sort of thing, to show the benefits of our technology. If we had a hundred more dealers with the expertise to do just that, it would really speed up our adoption rate. But this takes time and we are building this model as we go forward.
Ivan: Yes, that's probably the single biggest bottleneck for our business. But another barrier to market product acceptance can come from regulations. Right now, regulations about things such as communication standards and so forth are old. So, while the regulations may speak about how to transmit the radio waves, they don’t talk about standardisation for the sector now that we have moved forward with video and stuff like that. Every time we have a standard, it opens up a much larger market and makes it possible for us and for others to try harder to innovate. More attention also should be paid by governments to enable the use of more open platforms.
GH: What's the coolest bit of technology that you've seen come out of Topcon Positioning Systems? What has been something that you think is extremely innovative?
Ray: Oh, wow! I can list a hundred components and technologies. I'd say one of the biggest is the IMUs, Inertial Measurement Units. When we first started in the business, one IMU from Honeywell, I think, that you'd put on a motor grader, cost $26,000. Today, we’re building those sensors for about $300. You're not going to sell a lot of motor graders if the cost of one component is $26,000 and the system is $100,000 to manufacture and you’ll then have to sell it for $200,000 or $300,000. You might sell a few but certainly not a lot.
Fortunately, Topcon Positioning Systems is located on the edge of Silicon Valley [in California] and we are very much in touch with companies that are inventing and developing products and technology. You can even talk to the engineers that invented it. That's the benefit of having a location close to Silicon Valley. But Ivan is the engineer so from a technology standpoint this conversation could go on for four or five hours probably.
Ivan: You know, I've been part of this, our history and technologies, for such a long time. I tend to have feelings probably like a mother for each and every one of our inventions. I'm very jealous and it’s very difficult for me to see who's the best kid because there is none, I can’t choose! I love them all. If I have to summarise this in one word, the best technology is always the next one that I'm working on! There's a lot of love put into these products and we know them so intimately and once something is released, I'm always thinking of the next generation. And even two generations ahead. That's the beauty of this company. Topcon Positioning Systems allows me to do this.
GH: So, Ivan, what you're saying is that over the years, it's a case of your heart and soul is in the innovation, the product line and you're always thinking ahead to the next technical innovation, to the next baby, as you say.
Ivan: Definitely, yes!
