Semiconductor Startup Critical success Points 2011 apr(2)

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Working in a startup environment can be an adrenaline packed rewarding experience pushing the risk reward envelope to "infinity and beyond". Not without challenges, navigating a startup through the obstacle course of cash burn, risk mitigation, hiring the right employees, staying focused and timely execution are the responsibility of EVERY member of the team.

All too often in the startup environment there are misaligned expectations, poor accountability, and inconsistent goals that needlessly add additional layers of risk. Large companies, small companies as well as startups suffer from these malignancies.

A toolkit based on first hand learning experiences in this environment is valuable insight into your current or next engagement. To that end I have compiled a set of take-a-ways based on what I have learned over the last 10 years working for technology startups. I use these critical success points as a filtering mechanism and a check and balance in my daily activities. I hope you find them as useful as I do.

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Semiconductor Startup Critical success Points 2011 apr(2)

  1. 1. Critical Success Points for Semiconductor Companies 1 DAVID J. DONOVAN UPDATED APRIL 2011 Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  2. 2. Preface 2 Working in a semiconductor startup environment can be an adrenaline packed rewarding experience, pushing the risk reward envelope to "infinity and beyond“. Navigating a startup or small company through the obstacle course of cash burn, risk mitigation, hiring the right employees, staying focused and timely solution execution are the responsibility of EVERY member of the team. All too often in this environment there are misaligned expectations, poor accountability, no sense of urgency and inconsistent goals that needlessly add additional layers of risk. Large companies, small companies as well as startups suffer from these malignancies. A toolkit based on first hand learning experiences in this environment is valuable insight into your current or next engagement. To that end I have compiled a set of take-a-ways based on what I have learned over the last 10 years working for technology startups and big companies. I use these critical success points as a filtering mechanism and a check and balance in my daily activities. I hope you find them as useful as I do. Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  3. 3. Clarity of Purpose 3  Every employee must be able to state & understand the company’s value proposition & purpose in one sentence. Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  4. 4. Focus, Focus, Focus 4  Stay on the course to meet the stated objectives  Be wary of distractions such as  Non target customers taking an interest in your product and diverting resources off the course  Feature creep- allowing additional product functionality or features into your design and production path.  Maintain a single clear value proposition Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  5. 5. Cash 5  Cash is King  Spend money on execution not on fluff  Pre revenue focus is to minimize burn rate  Expenses should be commensurate with industry peers  Manage to cash flow  Preservation of capital trumps everything Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  6. 6. Execution 6  OSTM Process  Each project/subproject should identify and utilize communicable Objectives, Strategies, Tactics and Metrics  Applies across all functional departments  Give ownership to department heads, set expectations and make accountable Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  7. 7. Communication 7  No one group/person is designing/producing in a vacuum  No assumptions, check your interfaces  Do what you say you are going to do when you say you are going to do it  Sounds simple but difficult in practice Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  8. 8. Customer 8  Customers are internal & external to the company  Each group must understand the total solution that the team is presenting to the marketplace and their departments role in its success  The components of a successful total solution to the market place depend on internal deliverables first  Customer engagements  1st customer engagement is NOT “What do you need?” or “What can we do for you?”  1st engagement IS “We know your market, we know your processes, here is what we can do, here is how we can solve your point of pain” Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  9. 9. Competition  Identify 1-2 silver bullet competitors  Monitor activities in the channels and ecosystem such as strategy deltas, investment shifts, restructuring, acquisitions  Test assumptions periodically  Closely monitor & track the competitive structure of target market for changes Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  10. 10. Personnel 10  Hire the best skilled people you can  Multidimensional skills and advanced degrees are generally greater asset than single point expert with some exceptions  Enthusiasm, commitment, ownership, accountability, communications skills are as important as subject matter experience  Hire someone with a natural sense of urgency Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  11. 11. Marketing 11  Critical to understand customer point of pain and address in timely and cost effective manner  External customers perspective includes the entire value chain/eco-system.   Your perspective should take this into account Ensure the target market value chain has a high awareness of your company/product  Helps cross sell, leverage sell, partner development and acquisition Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  12. 12. Product 12  The tech road map is full of pot holes where companies are buried when they:   Designed a compelling product in a vacuum and failed to see the total solution Designed a compelling total solution but failed to deliver the product  Right message, right timing, right value props mean nothing if you can’t the get product to customer on time Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  13. 13. Manufacturing 13  Critical component lead time can kill a launch  Design for contingencies  Adjacent mature market demand can corner critical components needed for applications   Displays, GOBI, flash, DRAM, duplexer Secure supplies, plan needs Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  14. 14. Authority 14  If you give me the responsibility then give me the authority Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  15. 15. Critical Success Points 15 (BY FUNCTION) Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  16. 16. BOD/VC 16  Critical that BOD/VC have industry background commensurate with the technology funded  Eg., semiconductor capitalization needs a cost understanding of masks, engineering tools, multiple tape outs, testing, yields, market risks  Expectations need to be managed by CEO & CxO  Shoot for tier 1 VC funding. Micro VCs have shallow pockets for follow-on investments Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  17. 17. CEO 17  Ensure that CEO goals are aligned with broader company goals and are not self serving  Leads to conflicting allocation of resources and inefficient execution Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  18. 18. CTO 18  Critical to spend majority of the time overseeing all aspects of design; block to block & in system to minimize design time Must have vested interest & goal of seeing design through to production/cash generation  Design is NOT complete until STAC*, BD, customers have vetted & qualified for mass prod   No  next project until first one is complete Owns checks & balances process to tape out such that all risks are minimized towards a saleable product  Doesn’t mean their cant be impairments that are manageable and not hindering sell-ability *Standards, Test, Applications, Compliance Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 01/01/2011
  19. 19. Design Engineering 19  Critical that chip is designed in context of the system it will operate in, including behavior influenced by the implementation in a total solution, i.e. with baseband, RFFE    Designing for chip bench performance only is not an option Design verification processes must be in place and adhered to insure design goals are met before tape out Need constant reminder that venture is a for profit production company not perpetual R&D facility Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  20. 20. Sales & Biz Dev 20  Critical to have a voice/insight into the design process to act as a customer advocate and insure the end product substantially meets the Market Requirements Document  Selling in a vacuum and consistently resetting expectations for customers erodes confidence and credibility  Utilize best tools available to monitor track, adjust your daily business flow  Dashboards, top 10, losses, new ops etc., eg SFDC  Sales need to have skin in the game Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  21. 21. All 21  Critical that a stakeholders operate in manner consistent with a sense of urgency, problem ownership and accountability.  VC funded days are finite  Efficient   management of time and task required Problems need advocates who can efficiently and effective create resolution consistent with company goals Needs to be penalties for failure Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010
  22. 22. Mutual Expectations 22  Know the answer to these questions:  What do I expect from employer?  What does employer expect from me? Copyright © 2008-2011 All Rights Reserved Semiconductor Critical Success Points • David J. Donovan 08/01/2010

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