over the years
National Instruments is founded in the Austin, TX, garage of president and CEO James Truchard
Kelly Air Force Base of San Antonio becomes the company’s first customer
LabVIEW, National Instruments’ pioneering graphical system-design
software, is launched
The first international office opens in Japan
National Instruments goes public with its IPO debut on March 15
Fortune names National Instruments to its annual list of the 100 Best Companies to Work For
Hungary becomes home to National Instruments’ first overseas manufacturing facility
National Instruments’ finds it 10th consecutive year on Fortune’s list of the 100 Best Companies to Work For
Construction begins on a R&D and operations facility in Malaysia
National Instruments surpasses the $1 billion revenue mark for the first time
National Instruments’ history is one minted for the modern age. The company was launched in 1976, in the garage of one of its three cofounders. It now has 6,400 employees, offices in more than 40 countries, and provides products to more than 35,000 companies.
Growth of such magnitude takes strategy, and John Roiko, vice president of finance, manages National Instruments’ financial plans and execution. Staying true to the technology supplier’s 100-year plan, he’s also got his hand in taking the company to new places, such as Hungary, Costa Rica, and Malaysia. We spoke with him about the necessary steps for smart growth in the company’s sector.
As a technology supplier, why was pursuing international markets a smart move for National Instruments?
Our company’s mission is to help scientists and engineers create a positive impact on society. Their achievements are limited to the tools they use. Our company equips them with the tools they need to accelerate their productivity and increase their innovation and discovery.
What initiatives have you undertaken to make sure National Instruments takes the proper steps for growth?
National Instruments operates with a long-term focus and, over the years, has developed a 100-year plan. This allows us to heavily invest in research and development, sales, and marketing. Strong gross margins allow us to create new products, expand our market, and penetrate the markets we serve deeper.
Have recent events spurred such action?
During 2001, we saw our first revenue decline in the company’s history. It was the end of the dot-com era. Our president and CEO, Dr. T [Dr. James Truchard], made a strategic decision to double down on R&D. That took guts and a long-term focus, as it takes time for new product development to gain scale, but from 2003 to 2008, we doubled our revenue.
For a company of such size, what are the most important financial safeguards that can be put in place?
The answer is twofold. First, you must maintain a strong cash position. Our company has never had debt on our balance sheet. This is consistent with our long-term growth strategy. A company can only maintain control if it has a strong cash position. Second, we need to continue to maintain strong gross margins, so we can continue to invest in R&D and sales and marketing.
How do you make sure growth happens in the right way?
We keep our focus on the long term. We might miss an analyst’s number for one quarter, but long-term growth is our objective. We also have a very experienced management team. Two of the original founders, Dr. T and Jeff Kodosky, are still very involved in the day-to-day operations. And we’ve had consistency in our management team, most of which have been here through the 2001 downturn and experienced the success we achieved by investing through the downturn.
What’s would you say to a business attempting to grow its brand globally?
Identify your target market—ours is scientists and engineers—and determine a strong selling strategy, whether direct or indirect. Find your differentiation. How can you price your products and services to develop a long-term financial model that works for you? Then work hard and produce your best work. —Stephanie Vozza
Wells Fargo is honored to work with National Instruments—a company recognized as one of the best companies to work for globally and ranked number 18 by Fortune. We congratulate John Roiko and all of National Instruments’ employees on their exceptional success, and we look forward to their future achievements.