Sunday, October 26, 2008

Lighting Lamps

Tomorrow is the Indian festival of Diwali (also called Deepavali), which, literally, means festival of lights. The festival symbolizes the victory of good over evil or light over darkness and many Indians celebrate the festival by lighting lamps. This year, I have the rare opportunity to light some lamps of a special kind. My younger son , Krishnan, and his friends have asked me to be their advisor for the Tech Challenge 2009, an open ended design contest sponsored by the Tech Museum of San Jose.

My first experience with the Tech Challenge was through a volunteer group solicited by the Tech Museum to advise kids in an afterschool program at Lowell Elementary School in San Jose. I wrote about that experience last April. It truly was one of the best experiences of my life. Four of the six teams from Lowell won prizes that year and many of those kids had never done anything like that before or won anything in their lives. They worked well as teams, had fun and learned to solve an open ended design problem and delivered under pressure on the day of the Challenge. I am certain that at least a good number of those kids will make science and engineering a significant part of their lives.

My elder son, Arjun, and his high school friends who decided to join the contest in 2004 on a whim, also won a prize. Arjun and his friends considered themselves "technically challenged" in that they did not have serious engineering or scientific skills. But, after that year they signed up for the Tech Challenge all the years they were in high school and interestingly, won a prize of some kind every year. I am positive that this had a significant impact on their views on science and engineering. Arjun switched from being a biology major this year at UC Davis to being a biomedical engineering major. He chose UC Davis because of the school's reputation for engineering and their penchant for design contests.

Today there is much concern among many industry leaders such as Bill Gates, Dr. Craig Barrett and others on America's leadership in technology and the need to foster an interest in science and technology in America's youth. The last few years have shown me that this is less a function of the money thrown at the problem, but more a function of driving motivation. If you can ignite a spark of interest in one child, you could drive a chain reaction in many other lives. I am looking forward to this year's Tech Challenge. To me, it offers an opportunity to rejuvenate as I watch innovation in action and the whole host of possibilities it drives in a new generation. Happy Diwali !


Sunday, May 25, 2008

Momentum for MEMS

The MIT Club of Northern California's Semiconductor Entrepreneurship series hosted a keynote address on "MEMS and Startups" by Dr. Kurt Petersen, on May 15th. MEMS are microelectromechanical systems and at nano-scales classified as nanotechnology also. Dr. Petersen is considered one of the founding fathers of MEMS and has also co-founded four startups, Transensory Devices, NovaSensor, Cepheid and SiTime. Dr. Petersen's 1982 review paper "Silicon as a Mechanical Material" is considered one of the seminal papers in the field. You can find his bio summary on the event link. The talk was fascinating in that it covered the emergence and growth of a new industry and the fate of four startups in the space, a story often repeated with some variety in Silicon Valley.

MEMS devices have grown by an order of magnitude every decade from the 1970s. In the '70s the applications were mostly industrial, followed by medical in the '80s, automotive in the '90s and consumer in 2000 and beyond. the volumes have grown from the millions in the '80s to billions currently. Early applications in the '70s were pressure sensors and thermal print heads. Today they cover areas such as pressure sensors, accelerometers, digital light projectors, gyroscopes, oscillators, inkjet print heads, microphones, microfluidics for biotech and many others. In 2006 MEMS was estimated as a $5.6B industry with TI, HP, Canon and Bosch leading the pack with revenues of $905M, $500M, $427M and $374M respectively.

MEMS is everywhere in automobiles with all kinds of sensors, and it is expected that every cell phone will have 6 or more MEMS chips by 2013. Early MEMS devices were built in speciality foundries, but today big foundries like TSMC have announced plans for full scale entry into MEMS . MEMS is rapidly moving to state of the art 6" and 8" wafers. When devices such as the iPhone and Wii use MEMS, clearly there is enough volume to attract the bigger players. With the big foundries entering MEMS, the possibilities for fabless MEMS companies also increase. In fact, Dr. Petersen's SiTime is one such company. He recalled the early '80 and early '90s when they had to beg foundries to build MEMS devices.

Dr. Petersen talked about his experiences with his startups. The first, Transensory Devices founded in 1982 is now part of Measurement Specialties. The second, NovaSensor, founded in 1985 along with Janusz Bryzek and Joe Mallon was funded by Schlumberger with $2.5M in equity and $2.5 M in R&D. The company shipped second source pressure sensors within 7 months of funding and became a first source supplier because of quality and delivery. The company was sold to Lucas Industries in 1990 and acquired by GE sensing in 2004. Today NovaSensor has over $100M in sales. Dr. Petersen described milestones in the company's history such as getting the first borrowed fab, building their own fab after a year and a half, getting sued and going through two layoffs.

Cepheid was founded in 1996 and self funded for 18 months. From 1997 to 2000 they received three rounds of funding for a total of approximately $24M from angels and CampVentures and went public in June 2000. They shipped first product in 2000. Cepheid's mission is to change the way DNA testing is performed using microfluidics and PCR. All US mail is screened for anthrax in Cepheid systems. Today Cepheid has over 500 employees and a market cap of close to $1.4B and derives most of its revenue from the human diagnostics market, but is not yet profitable. The revenue from the USPS is about $40M/year and CPHD is one of Silicon Valley's top 150 companies with a revenue of $130M in 2007. Their GeneXpert has 3 FDA approved human tests and many more under development.

SiTime was founded in 2004 and received three rounds of funding totaling about $43.5M from NEA, Greylock, CampVentures and Bosch. SiTime's mission is to make the first and best MEMS based oscillators in the market. They seek to beat the quartz oscillator cost model of $0.50/oscillator. SiTime shipped first product in volume 33 months after start and is currently shipping over 100k units/week. SiTime is one of the early fabless MEMS companies. Quartz oscillators are used in a variety of devices from watches at the low end to consumer electronics and very low jitter high end devices. MEMS oscillators are initially targeted at the mid-range consumer electronics segment and will penetrate the other markets over time. SiTime is still a private company.

Based on experiences with his startups, Dr. Petersen talked about key startup requirements as being an experienced team which could weather adversity, a market over $200M and advanced technology with IP protection which was inexpensive and met market needs. However, the reality of startups is that they are never perfect, never easy and make mistakes. They also have bad hires, bad times, conflicts due to multiple type A personalities, are frustrating and have poor initial products. However, if the founding concept addresses a market or technical need they are usually successful and can be a very exciting ride.

Yes, these are indeed true of many Silicon Valley startups. But, there are many which don't fit this mold. Sometimes luck plays a large part and being at the right time and right place with a good idea is all it takes. It does help to have a successful startup under your belt if you want VC funding. Dr. Petersen's talk illustrated many of the ups and downs of the startup world which are not readily apparent to the rest of the world who read the success stories of Silicon Valley startups like Intel, Apple, Yahoo, eBay, Google, Youtube and others.


Sunday, May 11, 2008

Is Silicon Valley losing its (Midas) touch ?

Today's San Jose Mercury News had an interesting discussion on the softening economy and its impact on venture capital. This is a question which gets asked periodically and time and again the Valley comes up with yet another winning streak. First it was semiconductors, then the Internet, now in its second incarnation as Web 2.0, and maybe clean technology to come ? So, why the question now ? The Mercury News draws attention to the first quarter 2008 VC funding results and points out that poor returns are forcing a shakeout in the VC industry and money is flowing to the biggest firms. This, of course, is the essence of capitalism :-) Winner takes all.

What is most interesting is the chart they refer to while identifying the trend. They point to the dip in funding in Q1 '08. The chart, short as it is, from 2005 to 2008, has several dips in it already. I dare say that if the chart stretched back to 2000, there would quite severe dips from 2000 to 2003. :-) But, the Valley seems to come back with a bang. So, I would not count Silicon Valley out yet.

However, it is interesting to look at historical trends and see where the money seems to be flowing to. I really like the Money Tree reports. They let you slice and dice the data many different ways. Here you can see that Silicon Valley's lead is not going to be overtaken in the near term :-) The historical trend also does not show any recent sharp drop off, though, of course its not easy to match 1999-2000. :-) Where are the VCs who used to fund interesting projects like WebVan :-) ? It is rather interesing to watch the historical trends for VC funding for various sectors, like semiconductors , or software, or energy, or medical devices and equipment. Its easy to see what's hot and what's not over some period of time.

Naturally, the VCs seem to follow the money where the sectors are concerned :-) But, the regional dominance of Silicon Valley seems tough to beat in the near term. It does not hurt that the dominant VCs to whom the money is flowing, happen to be here either. However, it is true that globalization has had an impact. Many of the Silicon Valley VCs do have extensive operations and investments all over the world. In a sense, they go where the opportunity exists at any point of time, whether it is India, Israel, China, Korea or Vietnam. But, the Silicon Valley influence remains strong.


Tuesday, April 15, 2008

California Clean Tech Open 2008 Launch

The California Clean Tech Open (CCTO) 2008 competition was launched at the San Jose City Hall Rotunda last Wednesday, April 9th afternoon led by San Jose Mayor Chuck Reed and David Rodgers from the US DOE. What was significant about the event was that this was the first time since its inception that the event was held in San Jose.

Maybe San Jose wants to show that the center of gravity for clean technology is in Silicon Valley. The venue was appropriate. It was the steel and glass rotunda of the gleaming new San Jose City Hall. This was my first visit to the new building and I must say it is quite stunning. You can check out pictures of the new City Hall here. There was a glittering reception with the usual Silicon Valley crowd of entrepreneurs, VCs, investment banker, attorneys and the like.

Mayor Reed issued a challenge to solar installers to enable zero upfront cost solar installations for homeowners within 60 days. Seemed like a tall order to me. But, SolarCity seems to have responded to the challenge with a proposal today which eliminates all up front payment for new installations in San Jose. But, unfortunately, the program only lasts for slightly more than 60 days, till the end of July :-) Solar City is funded by Draper, Fisher, Jurvetson and Steve Jurvetson was one of the speakers at the event. Its always interesting to listen to Jurvetson speak. His rapid fire delivery has a high content density and you can lose a lot in a minute if you are not listening. :-) In any case, he believes that the future is clean tech from a VC perspective.

Marc Gottschalk gave an overview of the 2008 competition. Eric Cummings of Cool Earth Solar talked about his company's success and his team's experience during the 2006 CCTO competition. Cool Earth Solar was the first runner-up in the Renewable energy category in the 2006 CCTO competition. They just raised $21M in Series A funding in February 2008. Gunther Portfolio has an even more detailed writeup on them from February. Hopefully, GP will be back in action with more interesting posts soon.

I had a chance to talk with Eric Cummings at the CCTO event. He remembered our meeting during one of the CCTO events in 2006. They have come a long way since then and the competition has helped them build a successful company. There was a poster at the Cool Earth Solar booth which implied that current renewable energy technology was inefficient and would lead to losses by the utility companies who invested in them. Eric seemed to imply that Dr. Borenstein's comments along these lines, a few months back were valid and more efficient alternatives were a few years out.

Overall it was a fun event to kickoff an exciting 2008 competition. Maybe this year's competition will breed more companies along the lines of Cool Earth Solar. The stakes are huge, if the latest award by PG&E to Brightsource is an indicator. The award is for 900 MW of electricity from five solar thermal plants to be built in the Mojave desert. If several of the other clean tech startups in the Valley start delivering on their promise, Silicon Valley will drive yet another global industry after semiconductors and the internet.


Thursday, March 13, 2008

A Parallel World

Today, Reuter's had an interesting article on Craig Mundie's vision of a parallel world. Craig Mundie is Microsoft's Chief Research and Strategy Officer and has inherited the mantle of Microsoft visionary from Bill Gates himself.

The article caught my eye for multiple reasons. I had the good fortune to work for Craig Mundie's company, Alliant Computer Systems (mentioned in the article) quite a few years back, doing what he suggests only a handful of people know how to do, mapping serial applications to parallel computers. It was an interesting experience. These were massive applications running into tens or hundreds of thousand lines of code which had to scale on multiprocessor systems to deliver performance and compete against supercomputers like Cray. The performance delivered could make or break the sale of multimillion dollar systems.

Yes, Craig is a visionary and always has been. To be picked as Bill Gates' successor in this role is acknowledgement enough. But, as he himself points out, having a vision is one thing, predicting when it will happen is another :-) I am sure those of us in the '80s and '90s who thought parallel computing was ready to take off can attest to that.

The current shift to parallel computing is born out of necessity, with single processors reaching capacity limits in terms of heat, power consumption and semiconductor process technology. Craig predicts the arrival of a new "killer app" to take advantage of the coming powerful parallel computing platforms and even a new programming language. He defines his challenge as taking Microsoft past its traditional strengths into new technology areas. This will be interesting to watch, because he has been an advocate of Microsoft's early participation in web based television and other leading edge areas, much before they were fashionable or profitable. It will be like Microsoft taking on some Silicon Valley attributes :-)

This would explain the rate of Microsoft's Silicon Valley acquisitions over the last decade. Dean Takahashi has an interesting take on Microsoft's recent bid for another Valley icon. Speaking of Dean, he has succumbed to the Valley's entrepreneurial lure and has ceased to write for the Mercury News. I am sorry to see him leave because he is one of the best technology columnists I have read and he captures the beat of the Valley so well. But, as always, endings mean new beginnings. I wish him well in his new venture.


Monday, March 3, 2008

Making money off Social Networks

On Tuesday, February 19th I attended the MIT/Stanford Venture Lab event on Shaking the Money Tree of Multi-Platform Social Networks. Like the one on Green Tech for the consumer market in January, this one was also a sold out event. However, the similarity ends there, since they are two completely different markets. The panel was moderated by Jeremiah Owyang, a Senior Analyst at Forrester and consisted of panelists from two startups Social Media and Rock You and from more established players Bebo and Google, with Kevin Gullicksen from Morgenthaler Ventures giving the VC perspective. Jeremiah gives a nice summary of the event on his most excellent blog, with links to notes from others. As the post states, it was a most excellent event.

Jeremiah's introductory slides classifying the online community and showing the demographics of the creators versus spectators were very interesting. For those interested he has his slides posted on his blog. It would be pointless to reiterate the summary which Jeremiah and others have covered earlier. But, the two things which stood out to me were 1) the proliferation of competitors, perhaps due to the low barrier to entry and 2) the difficulty of monetizing the social networks in spite of a plethora of apps and widgets on sites like Facebook and others. Social Media did point to several of their app developers making some money, but clearly scaling revenue seems to be an issue at this point.

However, what was most striking was the energy and exuberance of the community. Its almost as if they did not care whether they made money as long as they had fun creating the networks and the applications. Perhaps that was the source of most of these networks and the making money part came as an afterthought. It will be most interesting to see which of these networks turn out to be profitable and why.


Thursday, February 28, 2008

Solar Seismic Shift prediction

Green Tech Media's Jennifer Kho has an excellent post on the chances of a shakeup in the solar power industry and what that might mean. Greentech Media's Solar Market outlook panel seems to think a shakeup is inevitable and the only remaining question is one of timing. It almost seems like yesterday that the buzz started :-) Some of the predictions show the shakeout lasting two to three years and being driven by the massive capacity addition and subsequent price competition. The general feeling is that the companies which can ride out the shakeup will be in a great position five or so years out.

Jennifer Kho's post also identifies some of the largest trends affecting the industry such as aggregation, partnerships/acquisitions, cost reductions, cross over from semiconductors to clean tech and others. The posts covering these trends make interesting reading, especially the one showing executive crossover from high tech to clean tech including such luminaries as Bob Metcalfe(inventor of Ethernet) and Vinod Khosla.

Speaking of Vinod Khosla, he is making bold predictions, (again?). He predicts that India will be the next greentech hub, due to the availability of a large pool of scientists and technologists and a potential large market for clean energy. Since India has very little oil and gas resources within the country, historically they have made early attempts at building nuclear power plants and quite a few hydroelectric power plants. In fact, my father was an engineer who was involved in the construction of three or four major hydroelectric projects. As a kid I remember living near those construction sites in the rainforests of Kerala, and visiting several of the dams and the first underground powerhouse in India which he helped construct.

However, India's energy needs are growing by leaps and bounds with the country's progress as also the environmental impact from fossil fuel use. India probably needs clean energy more than most other countries, but Khosla probably is right that mass adoption may not come till prices come down.


© 2007, 2008 Madan Venugopal    All rights reserved.