Tag Archives: Entrepreneurship

The Microchip Revolution (Final Part)

I just finished reading The Microchip Revolution about which I wrote for posts here, there and there. This is a beautiful recollection of what Silicon Valley brought to the world. The revolution began with the Traitorous Eight who looked like this when young

and like that a few years later (from the New York Times Julius Blank, Who Built First Chip Maker, Dies at 86)

Fairchild Semiconductor’s founders in 1988. Victor Grinich (left), Jay Last, Jean Hoerni, Julius Blank, Eugene Kleiner, Sheldon Roberts, Robert N. Noyce (seated, left,) and Gordon E. Moore. Credit: Terrence McCarthy

I could not finish this history witout some cap. tables, the ones of companies mentioned here, that I could build: Intel, AMD, Cypress, IDT, Lam Research. I desesperately looked for data about Intersil, but neither the SEC nor Thomson Reuters could help me. Will you?





and as a postcript on Oct 13. 2020, Micron Technology, which had every unusual local investors from Idaho with a convertible loan structure:

The Microchip revolution (part III) : the maturity

You will find part I here and part II there. If the 60s were the early days which ended with the oil crisis in 73, the maturity came in the 80s with a second crisis coming from Japanese competition.

There was still a lot of uncertainty as the authors show in the chapters dedicated to Cypress, IDT, Micron. For example:

Another example about the uncertainty around which technology was superior for memory products at the time is that in 1986, when I was a founder of a semiconductor startup company with a business plan predicated on making bipolar RAM products. This was Synergy Semiconductor. We were funded by two premier Sand Hill Road venture capital firms, Sequoia Capital and Mayfield Funds. Even these supposedly smart VC partners couldn’t predict the superiority of the MOS technology in the memory chip business. Rodgers and Cypress made the correct bet on CMOS. It is also interesting that Sequoia Capital invested in Synergy with bipolar technology and Cypress with CMOS technology, thereby covering their bets. (Synergy never went public, struggled for 10 years and was eventually bought by Micrel.)

Intel didn’t believe that they needed CMOS for their memory or processor products for years. They knew that CMOS was a more complex process, and therefore more expensive, and they were not yet dealing with the high-power limitations of their process. Intel did not switch to CMOS for memory products until 1986. [Page 260]

Entrepreneurship is the ability to face these uncertainties and also to act by taking risks:

I already knew that [Rodgers] was a special guy, very smart, in great shape, from running every day and probably a risk taker, but this was nuts [diving in a dangerous place in Hawaii]. What if the timing was wrong and he gets sucked into the tube? How will I get help, it is a 15-minute walk over lava. But he did it. And then he jumped it. He did it twice! This event defines Rodgers. He is self-assured, even egotistical, but able to back up his decisions with actions and willing to take risks even if the parameters are not totally known. Shortly after the lava leaping escapade, he quit AMD and started Cypress Semiconductors. [Page 252]

While he was still at AMD, [Rodgers] got a call from a venture capitalist who was doing reference checks on an executive and inventor while at Fairchild and who also trying to raise money to start a new business. This got Rodgers thinking: “If this guy can raise money and start a new business, why can’t I do it?” And he began exploring the possibility of doing just that. [Page 253]

This reminds one of my favorite quotes ever, from Tom Perkins the famous P in KPCB (Kleiner, Perkins, Caufield and Byers): The difference is in psychology: everybody in Silicon Valley knows somebody that is doing very well in high-tech small companies, start-ups; so they say to themselves “I am smarter than Joe. If he could make millions, I can make a billion”. So they do and they think they will succeed and by thinking they can succeed, they have a good shot at succeeding. That psychology does not exist so much elsewhere.

The Microchip revolution (part II) : the very early days

If you missed Part I, it’s here. All the culture of Silicon Valley was born in these early years. Here are a few examples.

In the early days of the semiconductor, it was mainly about high-quality research: With an absentee boss, Sherman Fairchild, on the East Coast, the group could focus mainly on doing pure research, with no boss to bug them. Their main direction came from intense competition between each other. No VC or corporation would finance anything like this now! [Page 14] The authors are right. Only Google maybe is doing it with or without VC or boss approval and peer pressure is similar.

They finally make and ship their first product in 1958, 100 transistors to IBM. [Page 17]

Jack Kilby was awarded the Nobel prize in physics in 2000 for the invention of the integrated circuit. Unfortunately Bob Noyce had died 10 years earlier and Jean Hoerni passed away 3 years earlier. The Nobel prize is never awarded posthumously. The scientific community informally agreed that both Kilby and Noyce had invented the chip and that they both deserved credit. [Page 21]

Chapter 2 is about a non-startup, Hughes Research Labs, based in Los Angeles.

We did not have stock options; few of us even knew what they were. [Page 48]

Having dynamic leaders who gave free rein to ambitious young engineers and scientists meant that the engineers and researchers were stimulated by competition among themselves rather than by management layers above, which helped create an explosion of papers and patents. However, in both cases [at Fairchild and Hughes RL], the transfer of technologies from R&D to production was not easy. Although they were distinctly different organizations, both were very large corporate structures. But in the case of HRL, having R&D and production in the same physical location meant that discussions between the two groups were quite frequent.

Another difficulty was the lack of stock option program at HRL. This definitely caused significant personal turnover, especially among the non-attached young scientists who were hearing about the new utopic world, and its lucrative stock option packages, up in Silicon Valley. [Page 67]

Chapter 3: Intersil, a lost opportunity.

Another genealogy of Silicon Valley and extracted, the impact of Jean Hoerni.

Intersil was founded by Jean Hoerni, one of the eight traitors. The early days are best described as a mix of genius and chaos. The two most versatile personalities were Jean Hoerni and Don Rodgers, the VP Sales and also ex-Fairchild. Hoerni with 2 PhDs in physics was a shy genius quite the introvert but given to unpredictable mood swings. Rodgers was an extrovert. He came from the rough and tumble, hard-drinking, hard-living Fairchild sales team of the 1960s. One of the early frustrations was the ineffectiveness of the marketing department. [Page 71]

Hoerni’s contentious and rebellious personality often appealed to the young managers and engineers who were also looking for the next opportunity and also rejected conformism and authority, in part to the traumatism of the Vietnam war.

When I [Luc Bauer] started working with Hoerni, he strongly advised me not to be blindly loyal to any company, but only to my own ambition and goals. He said that if your employer doesn’t help you reach them, then you better change companies or start your own because life is too short.
[Page 74]

But Bauer talks about a missed opportunity and the reason follows: just have a look at the revenue growth of Intersil (founded in 67, IPO 72) and Intel (founded in 68, IPO 71):

Joe Rizzi, one of Intersil founders summarized his seven years at Intersil with two words: Lost opportunity. He said that all, or most of the seven product categories could have become sizeable businesses on their own, given enough care and focus to nurture their growth.
At the time, uncertainty in the market pushed to diversity of products. Intel’s narrow product focus was a risky gamble.
[Page 102]. Intersil had $572M in sales in 2014 and was acquired by Renesas in 2017. Intel is now a $71.9B business…

The Microchip Revolution by Bauer and Wilder (part I)

I felt a but of nostalgia when I received the following email : “The idea of doing a book on semiconductor startup had been teasing me for a while, I finally found a longtime buddy who has been okay with doing this book over the past 2 years. We were greatly assisted in this mission by the Computer History Museum (CHM) in Mountain View, CA. The book focuses on the period from the late 1950s to the late 1990s, about the development history of MOS and CMOS industrial processes mainly but not only from the point of view of managers, but also workers in fab and fab managers that we were at the time. We describe the development of 9 companies that we knew well and that had developed original technologies: Fairchild, Hughes, Intersil, Eurosil, Intel, AMD, IDT, Cypress, and Micron. The title is The Microchip Revolution – A Brief History.” [1]

I met Luc Bauer in the early 2000s when investing in a startup he was a business angel in and a mentor. I remember how he lectured me saying that Kleiner Perkins was much more professional than we were! Luc is a gentleman which does not mean he cannot be tough when he is frustrated; when people have been working hard in Silicon valley like he did, they can be really tough! But we stayed in touch and I was so happy to begin reading his book a few days ago.

SiliconValleyGenealogy-All

This is a poster about the Silicon Valley Genealogy of semiconductor startups from the mid 50s to the mid 80s. This is what Luc is writing about through 9 companies which I am pretty sure are on this poster. By the way, Luc is there too.

His book begins with Fairchild and the Traitorous Eight and it makes sense as it is at the beginning of the genealogy. By the way the book is dedicated to one of the eight traitors, Jean Hoerni, A Swiss national and one of the rare people I have heard about with 2 PhDs. Luc has the same double culture and double education (BS, EPFL Lausanne and MS, PhD Caltech)

So here are a few excerpts: “A good part of our motivation [for writing the book] was to relive the intensity in our lives when we started in this industry: the endless and stressful hours of looking for yield crash factors, the great excitement and shouts of joy when you see a brand new integrated circuit product coming alive and functioning perfectly when the “hot out of the furnace” processed wafer is put for the first time on the electrical test prober. Another great motivator for us was to propagate an important story to younger generations, that working in high technology fields is hard and exhausting, but also a source of joy and pride as it is easy to see the impact of your hard work on the company you work for and possibly on the workd you live in.”

Let me put this again below, in bold this time:

Another great motivator for us was to propagate an important story to younger generations, that working in high technology fields is hard and exhausting, but also a source of joy and pride as it is easy to see the impact of your hard work on the company you work for and possibly on the workd you live in.

More to come I am sure!

[1] The real email was in French: “L’idée de faire un livre sur le démarrage des semi-conducteurs me taquinait depuis un moment, j’ai finalement trouvé un copain de longue date qui a été d’accord de faire ce livre avec mois ces 2 dernières années. On été beaucoup aidé dans cette mission par le Computer History Museum (CHM) de Mountain View, CA. Le livre se concentre sur la période entre la fin des années 50 jusqu’à la fin des années 90, sur l’histoire de développement des processus industriels MOS et CMOS principalement mais pas seulement du point de vue des chefs, mais aussi des travailleurs de fab et managers de fab que nous étions à ce moment. On décrit le développement de 9 compagnies que nous connaissions bien et qui avaient développé des technologies originales: Fairchild, Hughes, Intersil, Eurosil, Intel, AMD, IDT, Cypress, et Micron. Le titre est The Microchip Revolution – A Brief History.”

Deeptech generation – a guide to young aspiring entrepreneurs

I just read two very nice guides about deeptech entrepreneurship. They’ve been published by BPI, the French Public Investment Bank. Either you read French or you will only read a couple of quotes I translated. I have however put the slideshare links at the end of the post.

So here are some testimonies:

Do not be afraid to start your startup, even if it may seem complex and endless. Whether the result is positive or a little less, it is an adventure that you will not be taken away from, just like a PhD. Entrepreneurship brings so much into your life, into your curriculum. Entrepreneurship is a continuous training that can only be rewarding.

The transition from my doctorate to the status of entrepreneur came naturally. The technology of […] was my doctoral topic, we had already developed several prototypes that we had evaluated and which were promising. We could not stop there without giving end users, who really need it, the benefit of this innovation. We decided to create the startup and to launch it until the commercialization of the device.

The world of entrepreneurship opened me up to new horizons and brought me experiences that I never imagined when we started a few years ago.

The creation of a startup is a very beautiful experience, a human one first of all. By creating […] I met people I would never have otherwise. It’s also a work experience, because doing research and ending up with a finished product is not at all the same thing. Finally, as a laboratory director I consider that valorization is part of my missions, and it also brings us a lot of visibility at the regional level, because we create value and jobs.

What drives you to do that is a human experience: be willing to go to the very end of a topic that you are passionate about. Do not do it because it’s fashionable but because it fascinates you.

When you go from researcher to entrepreneur everything changes: the way former colleagues and friends look at you, the prospects of professional evolution. The question must be asked: “Am I aligned with my personal values?”

To go from scientist to entrepreneur is often to put what you like aside. You have to get into finance, IP, contracts … It’s a real change of mindset. In parallel, meetings and the emergence of new opportunities require a real agility in the way of thinking and constantly questioning the vision of your work.

Contributing to the creation of […] allowed me to discover an unknown world, that of the industrial world and marketing, and brought me a lot of things: the additional respect of my colleagues, the recognition and the […] gratitude […] for the positive impact (to come) on the economic activity of the region. This brought me a real satisfaction because my academic research finds consumers and therefore a real usefulness. And more people are working on my ideas since I started the business.

Advice to young (and old) people by Jack Ma, the founder of Alibaba

Thanks to my dear colleagues for mentioning to me this moving, inspiring interview from Jack Ma, the founder of Alibaba. He is giving advice to people from any age related to work and entrepreneurship.

If you’re 25 years old, do not worry, any mistake is an income.

Before 20 years old, be a good student.
Before 30 years old, follow somebody. Go to a small company, you learn the passion, you learn to dream. It’s not which company you go, it’s which boss you follow.
Between 30 and 40 years old, work for yourself. Time to be an entrepreneur.
Between 40 and 50 years old, do the thing you are good at. It’s too late to do something new.
When you are 50 to 60 years old, work for the young people.
When you are over 60, spend time for yourself. Go to the beach!

But when you are 25, make enough mistakes. You fall, you stand up, you fall, you stand up.

The start-up of You by Reid Hoffman

I have never been a big fan of “How to” books, sometimes called “personal development”. Even if Reid Hoffman is a brilliant entrepreneur, he did not really change my mind with his Start-up of You. His book which sometimes look like an ad for LinkedIn and which is strangely written with four hands, one saying I (Reid) and the other, He (Ben Casnocha) is still a good description of what it requires to look at improving a career:
– know thyself,
– be adaptable,
– network,
– look for opportunities,
– assess risks.

He also has beautiful ideas. When he quotes authors such as Jonathan Franzen – “Inauthentic people are obsessed with authenticity” – or David Foster Wallace – “There is no experience you have had you are not the absolute center of”. (Pages 93-94) I assume Hoffman knows Franzen and Wallace were great friends until the death of the second – strong ties in networks.

He also prones diversity in networks. If people know each other too well, there is not enough diversity, if they do not each other well enough however, trust is tougher to build. You need both old blood (trust) and fresh blood in a team. (Page 118)

But a team is only as good as its members. team quality requires individual quality. Look below at the famous Paypal mafia(Page 159)

Even if Hoffman gives good advice t the end of each chapter, he is not over-analyzing. For example, when talking about risks: Of the voluminous research on risk, remarkably little of it actually analyzes how real businesspeople make real decisions in the real world. An exception is a study done by professor Zur Shapira in 1991. (…) What he found likely came as a disappointment to architects of fancy decision trees. The executives surveyed didn’t calculate the mathematical expected value of various scenarios. They didn’t draft long lists of pros and cons. Instead, most simply tried to get a handle on a single yes-or-no question: could they tolerate the outcome if the worst-case scenario happened?


Impressive panel @ESPCI_Paris #SiliconValleyinParis with @reidhoffman @tfadell @Hemaisphere, Sebastian Amigorean and Stephen Quake moderated by @APapiernik

You could ask me why I decided to read that book. In the end, it shows entrepreneurs are really good at action, less at analysis… The truth is I went to Paris to listen to him at a great event called Silicon Valley comes to Paris. I wanted to approach him, network! Without knowing I applied some his advice and also made some of the mistakes he is describing. My main mistake was not knowing his interest about European start-ups. In fact he has not invested in Europe, he does not know EPFL. It makes you humble and willing to network even further. Reid, would you come back in Europe and inspire aspiring young entrepreneurs?

How Do You Teach High-Tech Entrepreneurship according to Randy Komisar

It’s the 4th time in a few days that I show the video below to people. It is rather old (dated 2004) and it is just great. A sentence I remember from the first day I watched it is the following: “I think there’s stuff you can’t possibly learn in school and I’m not even sure you can learn that on the job. There’s an entrepreneurial character. Some people have it and some people don’t. Some people may not think they have it, and they may have it. A lot of people they think they have it, and many don’t.” Here is the video and then the full transcript…

I think what can be taught, by and large, is a set of very basic skills about the various domains required for startup to succeed: finance, organizations, transactions, strategy, business models. You can get an exposure to that which can raise your entrepreneur IQ a hundred points. Because starting without that context, it could be awfully hard to understand what’s happening around you as you work in these environments let alone try to do it. I also think you can get exposure to the personality and character of entrepreneurship through the case study method in particular. You can begin to see the tortured lives that many entrepreneurs have to live in order to pursue their dreams. And you can get a sense of how that relates to your abilities to cope and to make tradeoffs in your life.

I think there’s stuff you can’t possibly learn in school and I’m not even sure you can learn that on the job. There’s an entrepreneurial character. Some people have it and some people don’t. Some people may not think they have it, and they may have it. A lot of people they think they have it, and many don’t. The entrepreneurial character is very, very comfortable with uncertainty and ambiguity. That entrepreneur character is very capable of understanding and targeting opportunities that others don’t see and is tenacious about their pursuit. At the same time, they remain permeable to know ideas and to course corrections from feedback from the market and from people who might have more experience or more insights than they’ve got. There’s a personality that works in this environment. And there’s a personality that I think is uncomfortable. And I try to explain this in particular in the classes that I teach. There is a badge of courage in being an entrepreneur. I mean, we sort of, you know, if you read the press and you read the local technology rags you know there is a real sense that entrepreneurs are a special super breed. They’re different. They create a lot of value. I love working with them.

But if you’re not an entrepreneur that’s OK too. There’s lots of other value to be created. There’s lots of other things to be “attacked” in the market place that maybe more appropriate. So I think you can learn a lot. And I think you can accelerate your ability to learn more by building a context. But I think ultimately you got to ask yourself a hard question. Am I suited for the uncertainties and ambiguities, the ups and downs, and the risks of being an entrepreneur, or am I not?

“Don’t f**k it up” – Advice to founders

I should not like “Don’t f**k it up”. Just because I am not a big fan of “how to” books in high-tech entrepreneurship. There is another reason why I should not like, i.e. the subtitle: “How Founders and Their Successors Can Avoid the Clichés That Inhibit Growth”. Usually I think foudners should not have successors. But I did not hate les Trachtman’s book at all. The reason is Les gives good advice to founders, the main one being “Trust and Empower”.

Let me give you examples:

I know that every founder believes his company is special, exceedingly complex, and unique. I can assure you that the challenges confronting you are just not that different. Ninety-five percent of your problems are shared by other founders, which is good news because it means your problems are solvable. They’ve been seen and handled many times before—all that is required is the smarts and the courage to address them. [Page 2]

“Employees who are taught to mistrust their own instincts are not very likely to trust their colleagues’ instincts, either.” Fear of failure can easily poison a company culture. Team-building efforts are useless when everyone’s first imperative is CYA — cover your ass. [Page 12]

The process of building a team is not that different from raising a healthy, self-sufficient child. […] You want them to learn from their mistakes and the
resulting painful consequences.
[Pages 15-16]

Micromanaging can often be an excuse for not developing and committing to mid-range and long-range goals. It can also serve as an excuse, changing your mind about what’s most important from one day to the next. A lot of founders run small companies that way, and they never scale those companies because it’s impossible to run a larger company on the basis of what the founder is feeling that particular day. [Page 20]

and his advice to foudners is to give more and moe importance to strategy by [Pages 31-33]:
1. Track your time.
2. Decide what not to work on, and stick to it.
3. Plan for the unexpected.
4. Write down your goals and revisit them quarterly.

More in another post…