David Twyver

Last summer, Ensemble Communications President and CEO David Twyver had to make the critical decision of whether or not to take his fledgling company public. Ensemble needed to raise cash to bring its point-to-multipoint fixed-wireless equipment to market, and to say the financial markets were ripe for such an endeavor is quite an understatement. Wall Street and every Joe with an E*TRADE account were piling heaps of cash on tech companies. Not going public in such a market was a sheer act of lunacy.

Twyver opted for the booby hatch. Ensemble passed up the windfall of public investment dollars and sought further private funding, raising $69 million from venture capitalists and strategic partners.

Three months later, Ensemble's competitors saw their share prices topple, their customers started filing for bankruptcy, and those overenthusiastic investors — armed with gritty financial details only public disclosure can provide — started screaming for the heads of their once-darling portfolio companies.

“We've been either lucky or wise, depending on how you look at it,” Twyver says.

Now, in a market where tech stocks trading at a few cents a share is not uncommon and going public is the last thing any sane company considers, Ensemble is thinking about that IPO. Ironic? Yes, but smart business, Twyver claims.

Too many CEOs and boards of directors became infatuated with the shiny lures of a robust market, Twyver says, but most ignored the fact that their companies weren't ready to face the grim realities of trading on a public exchange. And those inadequacies became all too apparent when the bottom fell out.

“We're trying to be a real company, not just a flash in the pan,” Twyver says. “A real company has customers that have bought from it more than once. A real company has demonstrated margins.”

Twyver maintains that an IPO is in the offing if the financial markets improve by the end of the year. The difference now is that Ensemble is no longer a development company. It has brought its Fiberless fixed-wireless systems into commercial production over the last four months under less than optimal circumstances. Not only has it started selling its product at a time when most carriers have sewn their purses shut, it is essentially pushing new technology, which usually is the sacrificial lamb in a down market.

Broadband wireless, itself an emerging telecom sector, has staked its small claim with point-to-point systems, while point-to-multipoint systems such as Ensemble's time division duplexed, adaptive modulation solution have yet to muster industrywide support. Still, analysts consistently give Ensemble rave reviews, touting the company's Adaptix bandwidth provisioning technology as the key to unlocking point-to-multipoint's potential.

Twyver concedes that the company has faced obstacles like the rest of the telecom industry. Ensemble has flip-flopped on staffing, adding to its sales force to push its products but slashing its overall work force by 15%. Furthermore, Lucent Technologies recently balked on its OEM agreements, forcing Ensemble to radically redefine its sales plan. But Twyver says that even that misfortune was turned to Ensemble's advantage.

“Lucent told Netro and us to fend for ourselves,” Twyver says. “But we've found that we're capable of generating our own sales channels.”

Ensemble originally planned to do the bulk of its business through OEM and marketing agreements through vendors such as Lucent, DMC Stratex Networks, Matsushita and Sony. Now it finds two-thirds of its business through direct sales. The company announced its first supply agreement with Denmark's butlerNetworks in April, but Twyver says there are many more other agreements either in the works or undisclosed.

Twyver certainly paints a rosy picture of Ensemble's prospects, but he's especially stingy with the financial details. Such is the advantage of holding off on that IPO. Unlike many of his peers — who must sweat through earnings announcements trying to stay upbeat — Twyver is spared the quarterly conference calls.

“Sometimes it's nice to not have the pressures of public disclosure,” he says.