Innovation Junkies Podcast

Matt Francis on Innovation Through Customer Empathy

The Jeffs talk with Matt Francis, founder of Ozark Integrated Circuits (OzIC). Find out what they have to say about: what innovation means for OzIC & what results it has driven, the value of innovation for R&D-focused companies & what they should know about it, & what the future of strategic, sustainable growth looks like for the R&D industry.

Jeff Standridge: This is Jeff Standridge and this is the Innovation Junkie’s podcast. If you want to drastically improve your business or improvement in growth strategy to generate sustained results for your organization, you’ve come to the right place. Over the next half hour, we’re going to be sharing specific strategies, tactics and tips that you can use to grow your business. No matter the size. No matter the industry. No matter the geography. We’ll be talking about everything from sales and marketing, the organizational, operational, and leadership effectiveness, the innovation and digital transformation, everything in between. Routinely, we’ll bring in a top mover and shaker. Someone who’s done something unbelievable with his or her business. We’ll dig deep. We’ll uncover specific strategies, tactics and tools that they’ve used to help you achieve your business goals. Welcome to the Innovation Junkies podcast.

Jeff Standridge: Hey, guys. Jeff Standridge here, and welcome to the Innovation Junkie’s podcast.

Jeff Amerine: Yeah. It’s Jeff Amerine here, as well. And we are so fantastically lucky today to have Matt Francis with us, the founder of Ozark Integrated Circuits. So, I’ll give a little bit of background… Hey, Matt. So, we’re going to brag on you here a little bit. So, Dr. Matt Francis founded the Ozark Integrated Circuits in 2011 and it’s become a key player, really a world-class player, in the emerging field of IOT for extreme environments. He’s an entrepreneur. I know he lives on a big farm and has horses and he’s also an active volunteer with IEEE. And importantly, serves as a city council member in Elkins. So, in his spare time, right?

Matt Francis: Yes. Well, actually my wife likes to say, I run an electronics company in my spare time but-

Jeff Standridge: You do that to support your hobbies?

Jeff Amerine: Well, you do a darn good job of it, for sure.

Matt Francis: Well, it’s a pleasure to be here with you guys, today.

Jeff Amerine: Give us kind of the lowdown, a little more background and detail on Ozark Integrated Circuits and some of the really amazing and disruptive innovation that you’re doing there.

Matt Francis: Well, sure. So, we just celebrated our 10th year being here in South Fayetteville. We started Ozark with trying to solve the problem of basically, putting electronics in places that electronics don’t want to work. And as you can imagine in the world of all things, things tend to work at room temperature because that’s where most of the world lives. But if you’re in a jet engine, or you’re trying to explore energy and industrial environments, there are a lot of places where things get really hot, really cold, lots of vibration and those electronics fail. And so, the IC part of Ozark IC is integrated circuits, switches, things based off of semiconductors, right? So, processors and computers and things like that. And so, we actually started from that end of things back in 2011, trying to solve the circuits part. And then, over time, we figured out, “Well, we can kind of do that.” But then, we have to actually hook them into the systems. That’s called packaging in our world.

Matt Francis: And so, we’ve developed a lot of packaging. And, I think, where we really got innovative, starting from the software side, how we designed the circuits. The majority of our design has been done on open source. I’m a big advocate of open source platforms and that gave us a lot of ability to innovate right our own tools and things to tackle this really kind of different problem from the mainstream. And then, within the electronics themselves, we use a lot of additive manufacturing to customize things and a lot of digital processes, database-driven manufacturing processes because… You might imagine, the things we use to make this stuff work at really high temperatures are kind of exotic. And so, you need to optimize your waste and make sure that it works the first time because it can become a very expensive problem if you have to iterate a lot.

Jeff Standridge: I’d like to know Matt, just for my background, how did you come to start trying to solve this problem with Ozark?

Matt Francis: Sure. I’m a graduate of the University of Arkansas. I did my PhD work in radiation-hardened electronics and the U of A has a really strong background in this area for a number of years. And so, the previous company that I was a participant in starting, we were doing radiation-hardened design and modeling and things like that. But we were really on the analysis side of telling you if we thought it was going to work or not. And that company didn’t go that… if you can imagine a tool for an engineer is a lot smaller market than what the engineer makes. And so, when I started Ozark, I really wanted to be on the other side of that, actually making the products, making the hardware.

Matt Francis: And so, with Ozark, with my co-founders, we were looking at different markets and things, and we said, “Well, this high temperature market seems to be a place in particular, where there’s not complete solutions.” And so, based off some of the strength and some of the research being done at the U of A, where we could collaborate on some things and facilities like the High Density Electronics Center here, we started looking at high temperature electronics technologies. And then, I think, really where we kind of blossomed is we started figuring out what the applications really were, what the challenges really were, and started mapping those. And so, over time, as I said, we went from being more of kind of a traditional, what they would call a fabulous design house where you just do the design and send it out, and became a fully integrated manufacturer where we do the majority of our electronic integration and packaging in-house, as well as the design.

Jeff Amerine: And you’ve leveraged in kind of a spectacular way, the Small Business Innovative Research awards from multiple agencies. Some of our listeners may be familiar with that but some are not. I mean, it could be instructive to talk about how critical that’s been to the growth and how you’ve used that over the years to propel the growth and expansion of the company.

Matt Francis: Absolutely. Yeah. So, the SBIR-STTR program, it’s a Small Business Innovation Research and the STTR is Technology Transfer. And those are programs that’s set aside for each federal agency that is targeted exclusively to small businesses. They are all used slightly differently but essentially, the government is your customer. And so, we’ve been able to, I think, we’re up to over… I know we’ve won more than 14, now of the various awards. But from agencies like NASA, Air Force, Department of Energy, each of those agencies has different care about things that they see as application or technology gaps. And so, as a small business, this is non-dilutive funding that you can apply for. The phase one awards are typically on the order of 125 to $250,000, depending on the agency, six months to a year.

Matt Francis: And then, once you’ve gotten into phase one, you can go to phase two. You’ve hopefully developed your commercialization strategy during phase one, really expanded that, that’s a big part of the transition. But then, those phase twos can be over a million dollars depending on the different mechanisms. And so, now you’re in a multi-year development cycle. And, as Jeff mentioned, we’ve been able to really leverage those, I think. At this point, we’ve gotten close to $10 million that we’ve raised through those programs, developed a series of platform technologies that we’ve then been able to solve real customer problems with. So, it’s basically our R&D funding, arm of our company has been funded by SBIR and then we’re now transitioning. We transitioned those technologies into products.

Jeff Standridge: Matt, that’s fantastic. $10 million of R&D funding through SBIRs and STTRs. One of the things we want to do is help our listeners understand how they can grow their companies through innovation. And so, what do you think, using you as a case study, for instance, what do you think differentiates you in terms of your success regarding SBIRs? I mean, many organizations are lucky to win, maybe one or two of those awards, you’re at the 14th level, right? So, what do you think differentiates Ozark Integrated Circuits when it comes to SBIR and STTR applications?

Matt Francis: Oh, I think there’s a couple of things. Well, starting out, I wrote and managed the majority of those and there’s obviously a limit to just how many projects one person can do. And so, a key thing that I’m pretty proud that we’ve been able to do is as we’ve grown our team, we’ve been able to grow additional staff around the SBIR program, bring them up through it. And so, right now, for example, I have four people running programs within the company, not just myself. So, I think that’s one thing is in those… you sort of have to develop, if you’re going to go down that path, you have to develop a whole team. And when we do proposals and projects for that matter, it isn’t a one-man show. We collaborate on those together.

Matt Francis: We have different members of our team that bring different strengths to the proposal. Some understand the application part better. Some understand the technology part, the business part. And then, utilization of resources in that proposal process. So, Rebecca Todd and the folks at the Arkansas Small Business Technology Development Center, they helped us tremendously with market studies in really figuring out how our technologies fit. And we’ve now, I think, the kind of thing that took us to from winning a couple here and there to really starting to just win a ton of projects in a lot of different areas as we realized that we have several platform technologies. And so, once you have that understanding and that roadmap, you now realize, “Oh. Well, I have this technology or series of technologies and I’m applying it to different problems.”

Matt Francis: So, that means your business plans and all that kind of stuff that seems like a ton of work and these proposals is not so hard because the markets get shared, and the technology information gets shared. So, I think that’s really, as our commercial strategy firmed up, we actually started winning more of them than when we were really just more technology-focused, right? And then, I think the last part of it is just having a culture of customer empathy because these are, in many ways, just like any kind of commercial bid and that it’s just more formal, right? It’s more written and formal.

Matt Francis: But you still have to explain to NASA or the National Science Foundation or whoever you’re pitching to, “Why me?” And that always starts with understanding their problem. And I think we do a really good job of explaining that to the agency, what we think their problem is, owning that problem and then selling our technology on it. And so, I guess from that perspective, it isn’t any different than just good sales. But I think one of the things that separates us is we really do try to understand the broad problem they’re trying to solve and where we fit inside it.

Jeff Standridge: Very good.

Jeff Amerine: You’re developing really strong application domain knowledge in some very disparate sectors, Miller Aerospace, and you’ve got geothermal and you have space applications and whatnot. Talk about some of those applications and how you came to realize that if you have stuff that has a broad operating temperature spectrum or can handle high radiation, how did you resolve to look at those three verticals, initially?

Matt Francis: Well, I’d like to say there was a distinct strategy but I think some of it just comes through stumbling into the right things at the right time and keeping your ears open to the ground. But some of the initial high-temperature work we did, we were looking at some… It was driven more by what funding opportunities were available, for example, from NASA. And so, NASA… this is one of my favorite examples of SBIR and how you have to understand the difference between the technology in the business case. We figured out… we thought we had some really good technology and approaches for solving a problem that NASA had, which was they wanted electronics that would work on the surface of Venus.

Matt Francis: Okay. It’s a really challenging problem. You’re talking about 500 degrees celsius. So, nearly a thousand Fahrenheit. A hundred bar pressure. So, a hundred times of Earth pressure with traces of sulfuric acid, [inaudible 00:16:19] coming down [inaudible 00:16:20]. Okay. It’s a nasty place. So, Venus, the US still hasn’t, we still haven’t said anything there. We’re just really starting to look at it. And so, as far as our market, it’s really small because I could make one set of devices for NASA. And then, in five or 10 years, it goes to Venus but that’s not going to sustain my company. And so, that’s part of the SBIR program. Not only do they recognize that instead, “You have a commercial market for this, right? You can solve our problem but you have a market.”

Matt Francis: And so, in the process of that, we looked at some different spaces and we started poking on this thing called Enhanced Geothermal, that people have been working on. And this is really drilling geothermal wells. I mean, honestly, some of them are so deep, you almost hit magma. Okay? So, it’s getting to what they call hot rock. Well, you start looking at that and gosh, the pressures are higher than Venus and the temperatures are almost as high. So, we kind of make this connections like, “Oh. If you go out to Venus and it’s this way. And if you go down in the earth deep enough, it’s almost like Venus again.” Well, that was obviously a bigger market than a terrestrial market and space market. And so, we started exploring how we could pivot and apply that technology down there.

Matt Francis: And then, in the meantime, we started doing some work at lower temperatures for mineral applications like jet engines. And along the way, started figuring out, “Oh, across a jet engine, you have everything from the intake, some are quite cold, to the afterburner could be over a thousand degrees.” So, there’s temperature regimes within that engine that start looking like Venus. And so, we started exploring that market. And then along the way, as we did these, we started identifying the key players in each market, develop champions in different companies and industries. And then, you start building up, as Jeff is saying, that kind of application knowledge, “What works here?” “What works there?” What special things do you have to do to make it work in this, the same technology but make it work in this application versus that application.

Matt Francis: And so, I think a lot of it is, again, it’s just listening. Whether it’s listening to your end customer or listening to, essentially, your investor in this case which is the government, the different agencies and what they’re trying to solve and then mapping those things.

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Jeff Standridge: We talk with a lot of folks and we talk about customer discovery, and customer empathy, and the voice of the customer, and those things a lot. And it’s difficult sometimes, to have those conversations in deeply technical organizations where you have subject matter experts that know their technology extremely well. But hearing you talk about the voice of the customer and the empathy for the customer, I think, I would agree with you, that is a differentiator. If we think about the definition of innovation being creativity, ideation, and inventiveness that results in new ways of doing things. Talk to us a little bit about how you’ve harnessed or leveraged innovation within OZIC, to drive business results for your company.

Matt Francis: Sure. Well, I said, again, innovation for our company. It starts with the people. We’ve collected just an outstanding team and with a lot of diversity of thought in that team. People with different backgrounds, we’ve got young guys who have done research and come out of school. From that side, we’ve got guys that have spent decades in the industry and we try to foster an environment where when we go to tackle a problem, it isn’t done in a vacuum. It’s not just, “Matt’s going to go write a proposal for this customer.” We get together, brainstorm through those solutions, and then come up with a proposal, whether that’s literally a proposal or something we want to try.

Matt Francis: I think the other part of it is just building the capability. And so, I like to say, we’re scrappers. We’ll go buy a used this or a used that, refurbish it, modify it, adjust it. And some of our test systems, you can’t buy on the market. We’ve just bought a furnace or a chamber or whatever test apparatus that we need to get the job done. Gone in, made the modifications, and made really unique capabilities. And-

Jeff Standridge: I want to go by… Sorry. Go ahead.

Matt Francis: Yeah. Go ahead now.

Jeff Standridge: I was going to play back some of the things that I heard because I think they really stand out and Jeff Amerine, and you’ll recognize some of these things. Just in the last three minutes of what you said I heard talent, and cultivating that talent toward innovation. I heard environment and culture, building the environment. Collaboration, which is part of that, as well. Coming together, brainstorming. I heard capability and process. So, you actually have built a capability for innovation. And then, I’ve heard throughout the discussion today, iteration and pivot, right? Iterate, reiterate, you can’t buy it on the market. You create, you pivot, et cetera. So, all of those core factors that, again, you don’t hear a lot in a deeply technical organization. So, I’m really kudos to you for figuring those things out and harnessing them to generate the kind of innovation that you’ve generated.

Matt Francis: Yeah.

Jeff Amerine: And Matt, it’d be interesting for you to also talk about, you’ve had this history of being in the front-end of R&D and some really cutting-edge stuff. The company’s in a position now to transition, at least in part, to full-scale production. Putting out, delivering the devices that are the result of a bunch of years of R&D. If you think about how to give advice to innovative R&D-focused companies about making that transition, what have you learned so far and what do you anticipate will be things you will learn as you go through it?

Matt Francis: Sure. Well, I said, I think the key to getting there has been, summarizing what you guys just said, it’s just you have to own the problem. And I think, if I had to pick one thing that has got us here, it’s that if we know what the problem is, and we have our technology, and there’s a gap, let’s just own the problem. Whether we are experts at that or not either become experts at it, or go find the experts. Own the whole problem and don’t let those gaps be excuses. And then, as far as taking that now and applying it to actually making this stuff, “Oh, we’ve learned some lessons.” Everything’s three times harder than you think it’s going to be. That’s making stuff but we’ve done those, we’ve gone round and round about… Well, what is our key capability and what should we invest in?

Matt Francis: What should we outsource? And what I keep coming back to, especially, as a strong R&D-driven company, is that every time we bring a capability and we dial it in for production, we learn things that we can apply back to R&D because we actually now really know how you do it. And you can have the best partnership in the world, and we have some awesome partnerships, by the way. We have some great suppliers and stuff but with your key technologies, you can have the best supplier in the world. And just things get lost in translation where you’re literally the difference between sitting there running the machine versus explaining a process flow. And I think some of our most innovative IP has been developed literally while we were making something for a product and then realizing, “Oh, this is why it’s that way. Huh. I wonder if three steps back we had done this, if it would work better.” And so, I think that-

Jeff Amerine: You’re actually able to engineer for producibility so that production gets more straightforward with less risk.

Matt Francis: Yeah. Because you have the observability where all the knobs are. You also own all the knobs and you have to make them all work but you have the observability you need to know, “Oh. Well, I can just go back here and twist this knob and make all of this way easier.” And so, I guess, whenever I get frustrated with the… because the challenges of production, it has its own unique challenges in getting yield and reliability and all that. But the payoffs, they feed all the way back to your product development side if you actually know what it takes to get the product out.

Jeff Standridge: So, as we start winding down here, Matt, we want to leave our listeners with some, maybe, pearls of wisdom. As you start thinking about strategic, sustainable growth for Ozark Integrated Circuits, what does the future look like?

Matt Francis: Well, I guess we have a strategy. For better or worse, when people come to us, we just generally don’t say, “No.” Unless the problem is just where the left field and not something that we’re remotely familiar with, we will listen to almost any problem. We built some crazy things for customers that are not remotely, what I would call, extreme environment. But somebody came knocking, we said, “Yeah, we can do that.” And some of my oldest, longest in the field products are actually, things that are some pieces of software and things that are just been out there and they worked. But through those processes, making that even though it’s completely different from what our core products are, you still develop your customer relationships, your basic business practices. You develop your support structures and all those kinds of things.

Matt Francis: And so, I think that’s one key takeaway for… I think, for tech startups is don’t be afraid to take something. It’s better to take some sort of straight up commercial opportunity, even if it’s unrelated. Take it on and you will grow up tremendously, very quickly. And then it’s going to pay huge dividends when you get your technologies and your products in the field, those can become teacher customers for you. And I have a good list of teacher customers that I would love to thank you for work we did for them. Hopefully, they were happy with it. And we learned a ton from just doing it. I think that’s one. Go ahead.

Jeff Standridge: Yeah. We just heard this customer empathy kind of woven throughout the conversation today and that, just as you described, continuing to listen to the customer and provide solutions that solve their problems.

Matt Francis: Exactly. As I said, I try to tell my folks that when we go into a customer call… A successful customer call is don’t spend more than 10 or 15 minutes tooting your own horn. Let the customer talk to you. Tell them enough about what we do so that they can start making the connections in their head of, “Oh, okay. That’s what you guys do. Well, this is the problem I need to solve.” And then, you have the conversation. But, I agree, I think that listening and empathy is probably our single biggest strengths in solving problems.

Jeff Amerine: Matt, if the listeners, and they may likely want to do this, want to find out more about Ozark Integrated Circuits or they want to reach you directly to kind of pick your brain, what’s the best way for them to find out more?

Matt Francis: Sure. You can go browse our website, ozarkic.com. We’ve got a presence on Facebook, LinkedIn, Twitter, if you want to follow kind of the latest goings on for Ozark. And the best way to reach out to Ozark is our general email address, info@ozarkic.com.

Jeff Standridge: Fantastic.

Jeff Amerine: Fantastic. Congratulations, again, on winning the MassChallenge this year and all the accolades you got with that. That’s a very selective group that gets that. And that’s really, the who’s who in innovation that gets into that. So, you guys did extremely well. It was amazing to see.

Jeff Standridge: Matt, thank you.

Matt Francis: It was a lot of fun. It’s been a lot of fun talking with you guys, today.

Jeff Standridge: We appreciate you for being with us. And we will see you all on the next episode.

Matt Francis: Yeah. Have a great rest of your day.

Jeff Amerine: Hey, listeners. This is Jeff Amerine. We want to thank you for tuning in. We sincerely appreciate your time. If you’re enjoying the Innovation Junkie’s podcast, please do us a huge favor. Click the subscribe button right now and leave us a review. It would mean the world to both of us. And don’t forget to share us on social media.

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