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The ESD Alliance will host another of its startup evenings with Jim Hogan, entitled Crossing the Chasm: Building a Startup to a Successful Exit. It is actually the evening in the middle of EDPS, the Electronic Design Process Symposium, as a sort of dinner keynote. And yes, dinner is provided.
Yesterday I previewed EDPS.
As usual, the ESD Alliance evening features Jim Hogan, this time in conversation with Amit Gupta. He was the co-founder of Solido Design Automation. Since his company was acquired by Mentor, I think we can say he succeeded in doing just that. Even more so, since he was also the founding CEO of Analog Design Automation (ADA) which Synopsys acquired in 2004. The event will be on Thursday, September 13th, from 6-9pm at the SEMI Headquarters in Milpitas. Note: if you think SEMI is still on Montague Expressway, they moved to Milpitas.
As it happens, I interviewed Amit on just this topic myself, a few years ago. The challenge for an EDA startup is not to get to $1M, since everyone has some friends. But getting from there to $5M to $10M to $20M is really hard.
When I talked to Amit, he had broken his advice down into a series of lists. The first list for the early startup phase, the second list to get across the chasm to proliferation, and then finally what to do after that (basically decide if and how you want to exit).
I assume you have read Geoffrey Moore's book Crossing the Chasm. If not, then rush out and buy it immediately. The key point is that the reason early adopters buy a product is not the same as what will get the mainstream market to buy it. You need a more complete product. For example, early adopters will do things like writing their own technology files. The mainstream expects the foundry to provide them.
If and only if (aka iff for mathematicians) you successfully complete all these steps do you have a shot at crossing the chasm. Then you can read Geoffrey Moore's next book Inside the Tornado (which uses Synopsys in early Design Compiler days as one example). This is the point at which you throw gasoline on the fire. In my opinion, it is the critical decision point in an EDA startup (and many other types): when do you ramp sales? Too early and you run out of money paying a sales force who cannot sell the immature product. Too late and...this never happens.
I have only had one experience of being "inside the tornado" and that was at Ambit. One year we did $840K in revenue. The next year we did $10.8M. Read that story in my recent blog post on the 20th anniversary of our acquisition by Cadence.Amit's advice was that you need to:
Then in the third phase, Amid has a very short list:
For the biggest picture of all, the whole company, there are also a few rules.
Once again, the event will be held on Thursday, September 13th from 6-9pm at the SEMI Headquarters in Milpitas. If you want to come, then register. If you are registered for EDPS then this is included and I don't think you need to register a second time.
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