Sir Robin Saxby, the founding CEO of processor IP licensor ARM was in London on Wednesday (March 20) to address a gathering of engineers, executives and bankers organized by the Global Semiconductor Alliance.
The background to the one-day conference on semiconductor entrepreneurship was the lack of venture capital interest in startup chip companies over recent years and how that source of capital for nurturing companies can be replaced.
In a talk to the well-attended event Sir Robin – who now works as a business angel investing in startups – gave the audience the benefit of his experience growing ARM from a 1991 startup to a global force. His advice came in the form of bullet points but with a repeated emphasis not on technology but on the customer.
However, Saxby started by bestowing his approval on a former colleague, the 22-year ARM veteran Simon Segars who, it was announced the day before, will take over from Warren East as CEO of ARM on July 1, 2013. Saxby said that he expected the transition to be smooth and produce no change of strategy. "The difference between Warren and Simon is seven years of age. Which means Simon is able to do the air miles," said Saxby.
Saxby started his speech by saying that the absence of venture capital should not be seen as a hindrance to starting a compnay and that using customers' money rather than venture capital was a better way to launch a business.
Saxby's bullet points were:
1) Think global. You need to be the world's best at something. In ARM's case it was MIPS per milliwatt (and MIPS per dollar).
2) Study existing markets and business models.
3) Global sales leaders are as important as the R&D team. Get customers involved as part of the project.
4) Technology only has value when you solve a problem and satisfy a customer's need.
5) Be brutally honest about your own strengths and weaknesses.
6) Employee share options will help control costs and act as a motivator. They are the light at the end of the startup tunnel.
7) The team is greater than the individual.
8) Embrace change as a good thing.
9) Think beyond the possible and then back off to reality.
Saxby concluded by saying that the time taken to develop semiconductor-based business has in many cases moved out beyond the time horizon for venture capital and therefore something different is needed. "VC payback time is too short to grow successful tech businesses. You need 10 years to create a technology business but I am working on some ideas around that [funding issue]."
Probably some are trying to follow a similar set of guidelines but none in the technology sector have achieved as much success as ARM.
The 10th bullet point would probably be "Have some luck"
All 9 bullet points are a must to a startup. I particularly like 7th and 8th. Team works are crucial. More brains will definitely help pave a better future. Change is inevitable. I don't believe any entrepreneurs can avoid it since the market keeps changing. If there are more eyes to see and more ears to hear, a good leader might very well define the better paved road for the whole team. To Clarke, I love the 10th. Which startup can be successful w/o? ;)
I cannot take the credit.
At the same event Ron Reddy, a founder of the now public Peregrine Semiconductor -- and a very witty speaker -- said something along the lines of "It is the entrepreneurs' job to keep a startup alive until they get some luck."
Nice story, but... Investments needed are enormous these days. To startup something vital (physical results, something you can hold in your hand and not just bubbles of air) is almost an impossible thing to do. Legal issues almost always kill startups instantly as soon as some success comes out. I am very very negative about the effects of patents, and even worse, software patents. Legal issues are simply too complicated and thus horrible.
On the other hand, looking at students at our university I see low entrepreneurship: Almost no one wants to startup something. But I am sure there are possibilities to pickup good ideas and to start off a good company with it (as we did ourselves with only a couple of guys)
With tears in my eyes I saw SemiSouth fab equipment for sale. They had some incredible interesting products... What went wrong? Patent issues? I have no clue. But one thing is for sure: If we know more about this we might learn from it.