Case Studies

Market Validation & Acquisition: Validate Programmable Network Processors as a New Market Segment While Building Company Valuation

Agere was an Austin-based startup that was developing a revolutionary programmable network processor that could provide wire speed transport for data communications rather than using a traditional ASIC that was expensive to design and could take up to 18 months to develop.


The Challenge

Research conducted by The Bernard Group (TBG) revealed that there was considerable skepticism about Agere’s new programmable processor because it did not use traditional programming language and the design was not based on a known architecture. Also, Agere’s closest competitor used a well known RISC-based architecture and C++ programming language. Switch and router OEMs had to be convinced that this new product could actually perform at the speeds that were claimed. They also had to be convinced that Agere’s Field Programmable Language (FPL) was simple and easy to learn. Finally, the leading competitor had a 6 month lead time evangelizing their story.


The Strategy

TBG developed a phased PR campaign designed to:

• Build market leadership
  o Develop strategic plan to launch Agere in a way that would quickly elevate its status as a market leader
• Educate the market
  o Agere’s easy-to-use programmable language reduced coding time by up to 80%
  o Articulate the disadvantages of RISC based architecture that needed many additional transistors and added to the problem of heat generation
• Gain market validation
  o Conducted select media, analyst and customer lab interviews and demonstrations showing wirespeed throughput was capable with a programmable network processor
  o Staged well developed road shows to articulate both Agere and the new market segment’s clear advantages
• High visibility and thought leadership
  o Built a ground swell of news and articles that launched Agere’s visibility as an emerging leader in this market. Included white paper placements, technical articles and executive interviews responding to programmable network processor market issues
  o Maintained strong coverage by leveraging new reporters, respected marked leaders and well-read journalists and reporters.
  

The Tools

TBG’s executive team understood that Agere was not the first to market so it was critically important to move quickly to gain visibility with the leading reporters, analysts and industry speakers circuit. The campaign had to begin with a well articulated story. Equally important, the corporate and product story had to convince skeptical analysts, OEMs and investors that this radical new design would create a whole new market. An intensely focused campaign, promoting Agere’s clear technical and performance advantages was launched.

During the first tour it became clear that the leading analysts who covered this space recognized that a new market segment was in the making. There was still some skepticism as to whether Agere would be a market leader. To further raise Agere’s profle and market awareness, Agere sponsored a six-city tour for the industry’s leading technical trade publications that focused on design and performance challenges in the network processor market. In addition, Agere’s product was submitted to the test labs of several technical trade publications and obtained breakthrough performance results. A series of well-timed press releases and interviews were arranged in order to consistently communicate Agere’s successful milestones in the development and sampling of their products. All exhibited and attended trade shows were leveraged as a platform to continue articulating Agere’s story that consistently featured their outstanding management team.


The Results

Over an 18-month period TBG’s PR campaign resulted in 26 analyst meetings, over 240 interviews and 180 positive articles in vertical technology print and on-line publications and top tier interviews with Forbes, Business Week, Wall Street Journal, New York Times, C/NET, etc. Agere was one of only 20 start-ups to be selected (from more than 600 nationwide applicants) to appear at the Southwest Venture Capital Conference. Agere was purchased by Lucent for over $500 million in less than 18 months from startup. In addition, because of the brand and identity of the Agere name, Lucent later adopted it when they spun out their multi-billion dollar microelectronics group calling it Agere Systems.