Train Wreck

I realize that the advice I give CEOs may fall on deaf ears. Still, that's a lot of ears; they can't all be deaf. And if a board director, a staff member, a good friend or a gutsy employee was to forward this link, isn't a good CEO obligated to at least take a look? I know, I won't hold my breath.

Still, the CEOs of the future need to know this stuff. Now that's a thought.

Assuming somebody's getting something out of all this, today's unsolicited advice is about the business. Many technology CEOs are surprisingly short on what it really takes to build a profitable, growing company in today's competitive marketplace. This is the biggest challenge for any CEO of any company. It's not the kind of thing you learn in executive MBA school.

In many cases, and this is especially true in small- to mid-size technology companies, CEOs play to their strengths and ignore weak areas. It's human behavior. Unfortunately, they're not getting the guidance they need from their boards or others.

And that brings us to what is, without a doubt, the shortest version you'll ever see of what every CEO of every technology company needs to know about running the business, along with a few links for more info. ... Read more

Two and a half years ago, I wrote an article entitled Intel: The one-hit wonder. My conclusion, at the time, was that Intel's business and operating model--built around its dominance in PC processors--is a trap that has kept the chip giant from competing effectively in hot markets like communications and consumer electronics.

With Intel Developer Forum in full swing in the city by the bay, I found myself wondering, has anything changed since I wrote that story and is the conclusion still valid? In my opinion, the answers are no and yes, respectively.

Don't get me wrong. Intel is still the world's 800-pound chip gorilla. It's actually made quite a comeback from a tough bout of market share loss to perennial rival AMD. The Centrino brand is killing in the mobile Wi-Fi space and it's working feverishly to duplicate that success with WiMAX. ... Read more

Most start-ups fail. There are lots of reasons, but in my experience, the most common cause is that they develop technology and not products. Lots of people confuse the two terms, but the distinction is critical in start-ups. Here's why.

According to the book Marketing High Technology by the field's godfather, Bill Davidow, "Marketing must invent complete products and drive them to commanding positions in defensible market segments." Bill called this the Strategic Principle.

Bill Davidow

(Credit: Mohr Davidow Ventures)

In case you've never heard of him, Bill Davidow was senior vice president of marketing and sales at Intel, where he helped the Santa Clara company to become the chip goliath it is today. Later, he founded Mohr Davidow Ventures, a prominent Silicon Valley venture capital firm. The man has credibility.

Let's break down the Strategic Principle.

The first part means this: it's one thing to develop technology that does something cool, perhaps even something that's never been done before. It's another matter to deliver a complete product that meets a critical market need better than the competition. And by "complete product," I mean hardware, software, infrastructure, sales channel, promotion, customer service--the whole nine yards.

The second part means that if your product does not have what it takes to be a market leader, then you might consider segmenting the market more narrowly. Perhaps the product will then have a chance at sustainable market leadership. The catch is that the narrower segment still has to be big enough to be of interest from a business standpoint.

Now tell me, who can argue with Bill's logic? What company, start-up or otherwise, doesn't need marketing? ... Read more

Yesterday was the setup for an eye-opening smart home adventure for my new custom home. Here's the conclusion:

I found lots of solutions that weren't robust enough for my application. One of the best was by Control4, a venture-funded startup in Salt Lake City, Utah. Control4's products are wireless and perfect for retrofitting an existing home since they don't require structured cable. Still, I had the luxury of wiring the house, which in my perhaps overly-conservative way of thinking is more bulletproof than wireless, so I kept on searching.

The best solution I could find for new home construction was Lifeware by Exceptional Innovation. Lifeware integrates with Windows and now Vista Media Center, creating a single interface and relatively seamless integration between subsystems. I even found a contractor capable of designing, networking and installing all the subsystems.

I was more than a bit queasy about Microsoft having any part in controlling my home. What if it crashed? Would the whole house turn blue until I rebooted it? And how exactly do you reboot a house? What if a virus or a worm or spyware got in? But Lifeware was supposed to be bulletproof, so I temporarily set my fear aside while I awaited the all important price-tag.

I was really excited to get the contractor's proposal. I involuntarily held my breath as I opened the attachment and then scrolled down to the bottom of the six-page document. After the initial shock wore off, I was finally able to breath again. I called another vendor for a sanity check. Same thing.

I wondered if these people were smoking something or maybe I'm just cheap? I didn't believe the latter, since I was building a relatively expensive home. I'll let you decide. Here's the math: ... Read more

Back in 1990, my wife and I went to Europe to explore the land of our forefathers (and foremothers) by car. The first thing I noticed when we got in our Audi rental was that it didn't have air conditioning. It was August; what were these people, barbarians?

Then I turned on the radio. The display had all this text information that identified songs and other stuff. Now that was cool. I was sure that, before long, American broadcasters would adopt similar technology.

Seventeen years later, I'm still waiting.

Last year I was asked to do a minuscule amount of consulting for iBiquity, the developer and exclusive licensor of digital radio technology in the U.S. I was dying to find out what had delayed my ability to identify a Jane's Addiction song on the radio, not to mention hear it in CD quality. Here's what I learned, but first, some background.

In 1991 CBS, Gannett (publisher of USA Today), and Westinghouse (which is now owned by Toshiba, in case you didn't know) formed USA Digital Radio Partners. I'm guessing it was some sort of joint venture. In 1998, a Westinghouse executive and former McKinsey consultant named Bob Struble led the company's spinoff with backing from a horde of broadcasting companies. Two years later, the company merged with Lucent Digital Radio and iBiquity Digital was born.

iBiquity calls its product "HD Radio." No, HD doesn't stand for high definition. It originally meant hybrid digital, but the company now claims that HD doesn't stand for anything. That's probably because it's easier to get a trade mark if the term is a name as opposed to a generic term. Intel did the same thing with MMX technology, which originally stood for multimedia extensions, although you couldn't get anyone at Intel to admit that now. ... Read more

Last week, Opti Technologies announced a patent infringement lawsuit against a bevy of chip companies: Advanced Micro Devices, Atmel, Broadcom, Renesas Technology, Silicon Storage Technology, SMSC, STMicroelectronics and Via Technologies. At issue are two patents for "Compact ISA-Bus" technology.

Opti had recently sued Apple and AMD over three patents for "Predictive Snooping" technology used in some computer chips. And, in August of last year, Opti settled with Nvidia for $11 million plus up to $9 million more if nVidia continues to use Opti's technology in its products. The nVidia action included all five of the above-mentioned patents.

Silicon Valley faithful will remember Opti as a once-respected chip company that fell on hard times. Is the company's recent patent litigation rampage the death-throws of a desperate company or a promising new business model? Let's go through it.

At present, Opti has but one full-time employee, CEO Bernard Marren. And, according to the company's 1995 proxy statement, Marren gets a cut of everything he brings in to shareholders on a sliding scale that starts at 5 percent and ramps down to 1 percent. Mike Mazzoni, the company's part-time CFO, appears to have the same deal.

Do the math; it's not bad work if you can get it.

I had lunch with Marren a few weeks ago. The 71-year-old industry veteran seemed excited about Opti's prospects and he may have reason to be. Marren isn't new to executive management. He's a former founder and president of electronic distributor Western Micro Technology and the Semiconductor Industry Association (SIA). He sits on a number of boards, including Microtune, Infocus and Unipixel. Marren knows his way around the negotiating table.

For better or worse, patent infringement litigation is business as usual in the chip industry. If not for broad cross-license agreements, chip companies might spend more time suing each other than developing products. Nevertheless, some companies have carved out significant niches by developing and licensing technology. ARM, Qualcomm, Rambus, Tessera, even IBM and Texas Instruments, make a solid business of it. But, for the most part, these companies develop technology with that business model in mind. Believe me, they prefer to negotiate than to litigate. ... Read more