Monday, January 7, 2013

Stuff that sucks less

With the tsunami of CES press releases this week and in keeping with the theme of, "I don't need more stuff, I need stuff that sucks less," I want to mention two inexpensive products I've been trying over the holidays:

Dropcam – All security systems are compromises, but I may have found a solution that addresses my meager needs.  A ton of technology in tiny package, fast and to easy set-up, very cool iPhone, iPad and web interfaces to the cloud based DVR functions with motion, sound and disconnect alerts.

Roku - My only justification is HDTV access to Amazon Prime content; not sure if any of the other "channels" are worth a damn. Easy hook-up, initialization and user interface.  Given how little TV I watch, I'd really like fire my two cable companies, but on-demand access of the desired content has eluded me.  The Roku is an experiment in this endeavor. 

Both of these devices are bandwidth hogs, so you don't want to use them on a metered broadband service. We pay about $600 a month in connectivity costs; two homes (cable, broadband and telephone), two cell phones and a Verizon MiFi.  My naive expectation is that $7,200 a year would buy fantastic mobile connectivity and content.  Waiting......

I don't have positions in either company..wish I did!

Saturday, May 28, 2011

Immersion search and browsing

The landscape is littered with dead bodies, but is it not time for someone to take another shot at a richer search and browsing experience?  Exploration of new topics via search (movies, music, art, science, travel, sports, and even shopping) is often as much about the journey as the destination.  I'd love to be able to navigate a visual array like the Safari Top Sites display that would tile Wiki's, stack videos, and other pertinent sites for me to rapidly explore a single search term.  Google has emphasized speed and simplicity (I suggest that you read In The Plexif you have not already done so) and delivered a highly efficient but sterile solution.

Instead of trying to compete with Google in search (SeachMe, Viewzi, Grokker failed for many reasons), possibly the immersion experience comes from an application, maybe a browser plug-in, or an app like FlipBoard, that leverages the power of Google search API and the steadily ramping network and processor bandwidth.  Search-Cube heads in the right direction, but it is ugly and inefficient; wouldn't you always want the Wiki page, video stack, etc. in the same spot on the screen every time so you wouldn't need to visually decipher or manipulate the presentation?

Apple does a fine job at user interfaces and could leverage the building blocks inherent in Safari, but I cannot imagine them investing in a utility that has Google search as its underlying technology.  Beyond a brilliant 2D search environment, I look forward to the day we have a true immersion search, browsing and computing interface.  Take a good look at Oblong Industries if you want a glimpse of the future.

Thursday, May 26, 2011

Thoughts on the Freescale IPO

Bloomberg Businessweek published a solid summary of this week's Freescale IPO, but there is more to the story.  I have great respect for Rich Beyer leaving the comfort of Intersil and walking into the burning building in 2008, albeit with a outstanding compensation package averaging $5M cash per year plus equity, to rescue Freescale on behalf of their private equity investors.  The industry dominating business practices, technology innovation and quality that was Motorola Semiconductor of the 1980's died a horrible death in the 1990's and spawned On Semiconductor and Freescale in 1999 and 2004 respectively.  Both companies have had to navigate the semiconductor industry cycles with suffocating debt, and in the case of Freescale, fleeing talent, fleeing customers and collapsing markets. I've actively recruited engineers and business leaders away from Freescale over the past decade, but the well is nearly dry.  Those who are left acknowledge that they may be out of a job any day due to the relentless cutting, but they are generally unemployable elsewhere.

There is money to be made in all segments of the semiconductor industry, both as an employee and shareholder, but the Freescale story will continue to be one of gains driven by business and debt restructuring not from innovation or market disruption.

Good luck Rich!

Monday, May 9, 2011

The Smell of Success

Over the past year I’ve been helping one of my clients build their engineering team and executive staff. One of their projects for a new market and new customers required a new engineering team, new software tools, new manufacturing technology, new technology partners, etc…….often a recipe for “Fail Fast” lessons. We went from zero to sampling a revolutionary new product in 15 months and I attribute this success to the new team’s leader, the great engineers he was fortunate to hire and the company’s culture.

Venture capital and entrepreneurial communities all sing the familiar song that says that failure is OK….it’s a learning experience…..that which does not kill you will make you stronger…etc. I completely agree that mistakes and failures are powerful learning opportunities if your ego allows you to be introspective, but don't not lose sight of the fact that you shouldn’t be rewarded for failure. You may collect a salary (and severance) and be able to raise future capital, but you haven’t done your job.

I have written previously about “What do I look for when building a team?” and would like to add one more quality:

“Knows what success smells like.”

You must build leadership teams with people who have known great technical and/or business success. There is an intangible element of decision-making, risk analysis and leadership that comes from knowing what success smells like and how to find it.  I’ve likely reviewed 10,000 resumes in my career and hired about 250 engineers and executives. If you have been the industry for 10 years and haven’t contributed a major technical or business success, you’re not in the running for my organization. If you think your failures can be blamed on a succession of companies collapsing around you, maybe you chose the wrong companies in which to build your career.

Fail Fast is a very valuable concept because it allows you to move quickly onto your next Success.

Sunday, May 1, 2011

Understanding the Semiconductor IP Companies

ARM, MIPS, Tessera, Rambus, InterDigital, Patriot Scientific and Mosaid (Toronto) derive a majority of their revenue from licensing intellectual property (IP) to semiconductor manufacturers. IP revenue is also a significant fraction of the revenue stream for Qualcomm (33%), Silicon Image (20%) Synopsys (13%), Cadence and Mentor Graphics.

Think of their business model as software development, sales and support with no exposure to the supply chain and yield headaches that periodically strike semiconductor manufactures and shock their shareholders.

The customers of these companies often face make-versus-buy decisions….do I invest time and money to design my own widget, or do I buy the building block from an IP vendor? Both options present different technical and financial risks and the IP companies work to compel you, with both stick and carrot, to buy! 

Companies like ARM and MIPS invest heavily in R&D and deliver critical new technologies for highly competitive consumer and communications infrastructure markets, some (Mosaid, Patriot Scientific, InterDigital) are exploiting patent portfolios through licensing and litigation, and others (Tessera and Rambus) are a mixture of both models.

Quick comments on a few of these companies:

ARM Holdings (ARMH) – I’m very bullish about ARM’s continuing global technology contributions and revenue growth for embedded microprocessors. They are a well respected vendor, highly responsive to the niche performance demands of consumer products (smart phones, tablets, automotive, etc.) and may make inroads against giant Intel in the cloud computing server market.

MIPS (MIPS) – While they have failed to take significant market share in the highest volume consumer markets, MIPS’ processor designs are utilized by Broadcom, Cavium Networks, Cisco, Entropic, Juniper, Netlogic Microsystems, Renesas Electronics, Sony, and Toshiba in set top boxes (cable and satellite), video games and network communications. They lost focus on the microprocessor business with their 2007 acquisition of analog IP vendor Chipidea that was divested in 2009. MIPS will likely exist as a runner-up to ARM until a customer or competitor acquires them.

Tessera (TSRA) – Licenses their portfolio of semiconductor packaging and imaging technology patents. Their continued revenue growth requires them to acquire and author new patents to replace portfolio patents that expire or are determined to be invalid by the courts or government patent offices. Companies like Tessera, Rambus and Patriot Scientific are not so affectionately referred to as patent trolls in the industry. They don’t have much in the way of a sales force, but they are expert intimidators and litigators.

Synopsys (SNPS), Cadence (CDNS) and Mentor Graphics (MENT) all supply software design tools to the semiconductor industry and added IP design and licensing to their portfolio of products.

Tuesday, April 19, 2011

Intel - No longer ideas, just wasted tweets

My friend Howard Lindzon's Twitter steam is genuinely his stream of consciousness.  He's usually funny and occasionally profane, and there are daily messages of wisdom.  One of todays tweets was:

Nice, a joke and some wisdom.

In an earlier post I made the case that Intel should buy ARM to maintain a dominant position in the microprocessor business. I have little doubt that we will unknowingly buy Intel processors buried in consumer electronics for decades to come and that they will maintain acceptable margins and moderate growth......but the story ends there. longer ideas, just wasted Tweets.

Wednesday, April 13, 2011

Semiconductor M&A News Summaries

With semiconductor M&A activity and interest accelerating, the posts on this blog with the highest traffic and presumed greatest utility have been my M&A summaries.
So, here's an update: