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dylan.mcgrath
Well said, Maheen. It is good to hear that there was a good vibe at DVCon. EDA ...
EDA's entrepreneurial capital
Maheen Hamid
4/4/2012 12:45 PM EDT
Traditionally, much of the growth in EDA has been driven by innovation brought to market by entrepreneurial ventures. Yet wherever we turn these days, there are naysayers who downplay the potential of EDA. They either undervalue the innate worth of existing small companies or, worse yet, seem reluctant to invest in proven ideas that have good business merit because “the returns are too small.”
Bigger fish in the sea, such as social media and its supporting ecosystem, have become prize catches for investors who view them as the way of the future, all the while commanding unjustifiable valuations. I wonder how growth in such industries will sustain itself if the underlying infrastructure—specifically, the hardware—does not continue to improve at an unprecedented pace. That leads me to have tremendous faith in the relevance of EDA because as long as hardware design teams struggle with complexity and time-to-market, the EDA industry will continue to grow.
EDA insiders understand this well, and entrepreneurial capital proudly continues to set the pace in our industry. One only had to look around the exhibit floor at DVCon last month to see that the companies exhibiting were mostly entrepreneurial. Their energy was invigorating.
Market potentials aside, the entrepreneurial founders of such companies understand that it is hard to pin down the key success factors for a winning formula in EDA. Changing buying behavior, customer needs and desires, and channel development are the crystal balls we have to juggle every day.
Compounding the traditional complexities of selling EDA tools is the “iPhone effect.” The first user-friendly smartphone forever changed how we relate to knowledge and how we prefer to process it. Consumers have become more impatient than ever before because instant gratification has become a global habit rather than an individual quirk.
Walking around DVCon gave me a chance to reflect on the past eight years, during which Breker Verification Systems moved from fledgling startup to consulting services provider to full-fledged verification software company. Despite its evolution, I still consider the company to be entrepreneurial, and my fellow co-founder and I intend to maintain that spirit because that is what makes business exciting.
Market timing in EDA is like throwing the dice. I have watched smart EDA entrepreneurs with a great idea develop a product that’s too far ahead of the market. For example, hardware/software integration in 2006 wasn’t the big verification nightmare it is today. Breker’s verification software may have been ahead of the market six years ago, but we stayed focused and bootstrapped ourselves by doing consulting work until our product resonated with design teams needing a system-on-chip verification solution—our sweet spot.
Along the way, we realized we had progressed from selling the idea of an innovative technology to a selling a solution that improves the lives of our users. Our defining mantra at Breker is simple: need-based product development. We listen intensely to our customers so that we can improve our specialization in SoC verification. Our developers cultivate a deep understanding of the technical problem across multiple customers and, as a result, may have a better idea of a given design team’s technical challenges than the team itself does.
Perhaps the hardest lesson for any entrepreneurial company to learn is focus—the ability to select and concentrate on a single market segment, or beachhead, as Geoffrey Moore defines it in Crossing the Chasm. The focus could change three or four times if it doesn’t resonate with design teams, and getting there requires listening to them to determine what they need.
Once a company has found a niche, it needs to be disciplined about sticking to it. Such discipline is especially hard to maintain when the company hasn’t yet seen a return on investment, and it may breed tension with the sales organization as the company turns away related markets. But if the company’s management understands the strengths of its solution and understands its customers, the focus will pay off. Sometimes, as Apple proved with the iPhone, consumers don’t know what they want until you show it to them.
I’ve focused here on the most important things that have helped us succeed during a tumultuous economic time: bootstrapping, listening and focusing on a single market—SoC verification—in which we’ve had the ability to dominate. Fellow EDA entrepreneurs, I am sure, are similarly evolving.
And if the energy at DVCon is anything to go by, the entrepreneurial capital in EDA continues to thrive, promising good returns on investment.
Maheen Hamid is the chief financial officer and a co-founder of Breker Verification Systems.
Bigger fish in the sea, such as social media and its supporting ecosystem, have become prize catches for investors who view them as the way of the future, all the while commanding unjustifiable valuations. I wonder how growth in such industries will sustain itself if the underlying infrastructure—specifically, the hardware—does not continue to improve at an unprecedented pace. That leads me to have tremendous faith in the relevance of EDA because as long as hardware design teams struggle with complexity and time-to-market, the EDA industry will continue to grow.
EDA insiders understand this well, and entrepreneurial capital proudly continues to set the pace in our industry. One only had to look around the exhibit floor at DVCon last month to see that the companies exhibiting were mostly entrepreneurial. Their energy was invigorating.
Market potentials aside, the entrepreneurial founders of such companies understand that it is hard to pin down the key success factors for a winning formula in EDA. Changing buying behavior, customer needs and desires, and channel development are the crystal balls we have to juggle every day.
Compounding the traditional complexities of selling EDA tools is the “iPhone effect.” The first user-friendly smartphone forever changed how we relate to knowledge and how we prefer to process it. Consumers have become more impatient than ever before because instant gratification has become a global habit rather than an individual quirk.
Walking around DVCon gave me a chance to reflect on the past eight years, during which Breker Verification Systems moved from fledgling startup to consulting services provider to full-fledged verification software company. Despite its evolution, I still consider the company to be entrepreneurial, and my fellow co-founder and I intend to maintain that spirit because that is what makes business exciting.
Market timing in EDA is like throwing the dice. I have watched smart EDA entrepreneurs with a great idea develop a product that’s too far ahead of the market. For example, hardware/software integration in 2006 wasn’t the big verification nightmare it is today. Breker’s verification software may have been ahead of the market six years ago, but we stayed focused and bootstrapped ourselves by doing consulting work until our product resonated with design teams needing a system-on-chip verification solution—our sweet spot.
Along the way, we realized we had progressed from selling the idea of an innovative technology to a selling a solution that improves the lives of our users. Our defining mantra at Breker is simple: need-based product development. We listen intensely to our customers so that we can improve our specialization in SoC verification. Our developers cultivate a deep understanding of the technical problem across multiple customers and, as a result, may have a better idea of a given design team’s technical challenges than the team itself does.
Perhaps the hardest lesson for any entrepreneurial company to learn is focus—the ability to select and concentrate on a single market segment, or beachhead, as Geoffrey Moore defines it in Crossing the Chasm. The focus could change three or four times if it doesn’t resonate with design teams, and getting there requires listening to them to determine what they need.
Once a company has found a niche, it needs to be disciplined about sticking to it. Such discipline is especially hard to maintain when the company hasn’t yet seen a return on investment, and it may breed tension with the sales organization as the company turns away related markets. But if the company’s management understands the strengths of its solution and understands its customers, the focus will pay off. Sometimes, as Apple proved with the iPhone, consumers don’t know what they want until you show it to them.
I’ve focused here on the most important things that have helped us succeed during a tumultuous economic time: bootstrapping, listening and focusing on a single market—SoC verification—in which we’ve had the ability to dominate. Fellow EDA entrepreneurs, I am sure, are similarly evolving.
And if the energy at DVCon is anything to go by, the entrepreneurial capital in EDA continues to thrive, promising good returns on investment.
Maheen Hamid is the chief financial officer and a co-founder of Breker Verification Systems.
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dylan.mcgrath
4/4/2012 1:11 PM EDT
Well said, Maheen. It is good to hear that there was a good vibe at DVCon. EDA depends on a constant bubbling up of small companies that bring innovation to the table. The dearth of investment is troubling, but it's heartening to know that entrepreneurs such as yourself are still living the dream.
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