By Eric Peterson | Oct 13, 2014
Founded: 1980; spun off from Particle Measuring Systems in 1993
From Boulder's optics mecca, CEO Paul Kelly is spearheading an international expansion, manufacturing best-in-class optics for lasers of every stripe.
After launching Particle Measuring Systems in Boulder, Dr. Robert Knollenberg started Research Electro-Optics (REO) to make high-performance optics for the company's particle counters.
The now-separate companies still enjoy a close partnership, says Kelly. "We're right next door to each other," he says. "They're still a customer of ours."
REO supplies high-end mirrors, prisms, lenses, beamsplitters and other optics to a wide range of military, industrial, medical, and research applications. The company's products are in everything from Mars rovers to Predator drones to semiconductor test equipment, as well as heavy-duty lasers used in manufacturing and surgery.
Another notable customer, the National Ignition Facility in Livermore, Calif., has thousands of REO's optics installed in what is the world's largest laser facility.
"One-third of our business is in defense," says Kelly. "About 25 percent of our business is industrial lasers. They really need high-end optics in those lasers so they don't get fried."
These are not commodity products. "We're really focused on that top 10 or 20 percent of technical requirements," says Kelly. That means polishing surfaces to two-tenths of an angstrom -- that's 0.02 nanometers -- and developing best-in-class coatings and processes for customers' specialized applications. "It's among the best capability in the world," touts Kelly.
The ultimate goal of all of this innovation is minimizing stray light. "The more perfect the surface is, the less stray light," explains Kelly.
Nearly all of the optics are manufactured, polished, and coated in the company's 107,000-square-foot Boulder facility. The company is increasingly making sub-assemblies with its optics, not just the optics themselves. Explains Kelly: "Customers are asking us to move up the food chain."
REO is on track for 15 percent growth in 2014 and Kelly is laying the groundwork for more. "Over the next three years, our expectation is to double the business," he says.
Kelly was president of REO's former parent, Particle Measuring Systems, until 2012 when he headed next door. "It's interesting to come in here to have the perspective of being a customer for 15 years," he says. "It's fantastic technology. REO has a global leadership position in the optics industry."
Challenges: "We have a pretty aggressive growth strategy," says Kelly. "One of the top challenges is people." But Boulder -- which is one of the three top optics centers in the U.S., with Rochester, N.Y., and Tucson, Ariz. -- is an easy place to lure new employees, he adds. "We can go anywhere in the country and recruit people to come to Boulder."
And recruitment is always easier if you have less churn, and REO minimizes that through strong benefits and culture, including an onsite medical clinic (healthcare costs are dropping by double-digits, touts Kelly) and paid volunteer time off (VTO) for philanthropic projects.
Opportunities: International growth. "We've built a global network of partners," says Kelly. There are now 20 reps overseas, more than double the total a few years ago. "What I say to my guys is 'You lose every game you don't show up to.’"
But REO is doing more than merely showing up in Asia and Europe. "The message seems to resonate," Kelly notes. "They're giving us a chance and we're winning business. Who would have thought that a company in Boulder, Colorado, would supply optics to China?"
Needs: An apprenticeship program. "There's a strong history of these things in Europe and not much experience with them here in the U.S., but there's a lot of momentum," says Kelly. "We're not getting returns and rewards for this for years, but if you don't start, you'll never get there."
He envisions a three-year program that balances on-the-job training and classroom time. "At the end of that, you have a fairly qualified optician."