Some entrepreneurs have to wait decades for their moment in the sun. That certainly was the case for Daniel V. Borel, the Swiss-born chairman of computer-peripherals maker Logitech International (LOGI). Since Borel founded the company in 1981 with a Stanford University buddy, Logitech has survived economic downturns, technology revolutions, market missteps, and battles with Microsoft (MSFT) and Intel (INTC). Now, the maker of computer mice, keyboards, digital cameras, and video-game accessories is enjoying unprecedented success--thanks in part to its chairman's steadying hand.
Borel is happy to share the glow with another entrepreneur who came on board more recently but gets equal credit for Logitech's recent boom. Italian-born-and-educated Guerrino De Luca joined Logitech as CEO in 1998 after a career at Olivetti and Apple Computer. His years at the company have been some of its most glorious: Sales have grown 30% annually, revenues are approaching $1 billion, and shares are up 60% in the last year. Does success make Borel and De Luca smug? Far from it. "We've both been through tough times, and you never forget the hard lessons," Borel says. Adds De Luca: "We can never afford to think we walk on water."
Even if they don't think it, a lot of their customers and investors do. Logitech has thrived in a tough, fast-changing business by simply outperforming rivals. Its products--from the latest cordless optical mouse to a nifty new fold-up cloth keyboard for the Palm--are known for their innovation, catchy design, and quality. Logitech has grabbed 55% of the world market for trackballs--stationary desktop pointers. And it sells 45% of all Webcams, after chasing Intel out of the business. Logitech's top achievement, and the source of nearly half of its revenues, is mice. After years of rivalry with Microsoft, the Swiss company is tied with the software maker for first place in U.S. retail mouse sales, according to researcher NPD Group. With the lowest costs in the business, Logitech earns 37% gross margins. Last year, net income was $75 million on $944 million in revenues.
It wasn't always this way. Borel, 52, was raised near Lausanne and earned a master's degree in physics at the Swiss Federal Institute of Technology. He left Switzerland in his mid-20s to get a computer-science master's at Stanford. In 1981, he and school chum Pierluigi Zappacosta won a contract from Japan's Ricoh to develop an early desktop publishing system, which included designing a mouse pointer. The software project died, but the partners began selling the mouse on its own in 1982 and won deals with Hewlett-Packard, Apple, and others. After a 1988 initial public offering, Logitech branched out into handheld scanners, digital cameras, and game accessories. But when the PC market tanked in 1992, Logitech went into crisis.
That's when Borel got aggressive about building a business independent of PC makers. He created a strong brand identity by stressing cool European design and cut costs by shifting manufacturing to Asia. By 1997, when Zappacosta retired, sales were nearing $400 million, but the company was still closely tied to the PC business.
Enter De Luca. An engineering graduate of the University of Rome, he earned his marketing stripes running Apple's European operations in Paris. Since joining Logitech, De Luca, 49, who works in California, has acquired makers of Webcams and audio speakers and moved into accessories for video games and handhelds. Soon, Logitech is expected to bring out its first add-on for mobile phones--a cordless headset De Luca describes only as "unusual." Now Logitech, once a humble mouse maker, has grand goals. As phone and cable companies battle over "last mile" connections to homes and offices, De Luca says, Logitech aims to be king of the "last inch" between human fingers and electronic gizmos. With Borel and De Luca in charge, you can bet Logitech will get there.