September 18th, 2018
Silicon Catalyst Advisor John East Q&A’s
John East has had a long and important career in the semiconductor industry in SiliconValley. He served as Chief Executive Officer and President at Actel Corporation from 1988 to 2010. Prior to that, he had worked for other Silicon Valley semiconductor companies including Advanced Micro Devices, Raytheon Semiconductor, and Fairchild Corporation. He has served on the Boards of Directors at Atrenta, Tortuga Logic, Alacritech, Zehntel, MCC, Single Chip Systems, Pericom Semiconductor, and Adaptec.
Q. HOW DID YOU GET INTO SEMICONDUCTORS?
A. As a kid, I liked to tinker around with crystal sets. When I was ten years old, I got an Amateur Radio License. So -- not surprisingly, I decided to become an electrical engineer when I went to UC Berkeley. When I graduated, I became an integrated circuit design and product engineer at Fair- child back in 1968, when many of the famous guys were still around. The old guard was there or had just been there, guys like Jerry Sanders, Charlie Sporck, Bob Noyce, Gordon Moore, Andy Grove. It was a fun time!!
Q. TELL US ABOUT YOUR EXPERIENCE WORKING WITH STARTUPS
A. After I retired from Actel, I didn’t want to spend the rest of my life golfing and working crossword puzzles. I wanted to serve a useful purpose. But being on a public board these days just doesn’t appeal to me. The “official” thing to do when you retire from a CEO job is to go on boards of directors. I had been on a handful of boards before retiring and continued to do that after I retired. The problem was, I loved working on products, customers, and markets, those things are fun and interesting. Unfortunately, the trend is that the board meetings at large companies have less to do with what is fun and interesting and more to do with legal, social, and financial matters. The combination of products, markets, and customers is what makes or breaks a company. If you handle those things right, you make a lot of money. If you don’t, you go broke.
But with public company boards these days, you spend so little time on that kind of thing. It seemed to me that the answer to that was to work with startups. So that’s what I’m doing today.
I’ve worked with three incubators including Silicon Catalyst and have also worked with some startups that are not associated with an incubator. My first incubator experience happened with EvoNexus, an incubator located in Southern California. They connected me with a company called Tortuga Logic. I started working with Tortuga as an advisor and then joined their board of directors after they got their seed.
My years as an individual-contributor were mostly spent doing engineering. I didn’t do much hands-on marketing in my youth. Now, though, I worry more about markets and customers. Those areas are totally undervalued by most startups. You win by having more customers. Not by having more megahertz or fewer femtofarads.
I’ve never worked at a company where my biggest ongoing problem wasn’t sales. But that sad fact often eludes the CEOs of super-technical start-ups until it’s too late. So my role in start-ups often comes down to pushing the sales and marketing efforts when everyone else is pushing the engineering.
Q. HOW DO YOU EVALUATE STARTUPS THAT YOU WANT TO WORK WITH?
A. First, I look at the market. I like three fields in particular; IoT, security, and AI. They are growing areas that I’m particularly interested in. I know a bit about them but would like to learn more. There’s no better way to learn than to get involved.
Second, I look for people that I like. You don’t want to work with jerks. Life is too short!!! You want to make sure you have good chemistry with the folks you’ll be working with.
Third, I look for a product that I think has a market, and one that won’t be inundated by hundreds of competitors doing the same thing.
If you find those three things, you can have a win and can have some fun while you’re winning.
I only sign on as an advisor to a startup if they agree to put me on the board when they do form one. Why? Generally, I get emotionally involved and spend a lot more time than a typical advisor does, so I inevitably want more in influence in the company’s future than an advisor would have.
Q. WHAT SILICON CATALYST STARTUPS HAVE YOU WORKED WITH?
A. I currently am on the board of directors of SPARK Microsystems. I had gone to one of the first Silicon Catalyst events, back when the incubator had about six companies total. Nick Kepler (Managing Partner at Silicon Catalyst) had recommended that I look at the startups, and SPARK in particular. I met Frederic Nabki, Co-Founder of SPARK, and liked him a lot and the concept really grew on me. The more I thought about it, the more I thought we could sell it. SPARK clearly knew what they were doing technically, and it seemed to all of us that they were onto something that could turn into a really big market. So I signed on as an advisor and then went on the board when they raised money late last year.
Q. IS THERE A MISTAKE THAT YOU SEE MOST STARTUPS MAKING?
You can easily get so wrapped up in making the product work that you don’t think about the selling. A lot of times start-ups are based on technology developed by a technical founder who is an expert in the field. He or she usually devotes himself fully to developing the technology and isn’t particularly familiar with the market. Sadly, it’s never just about doing something that you know how to do. It always comes down to getting people to buy what you’ve done.
Q. WHEN A STARTUP IS LOOKING FOR AN ADVISOR, WHAT ARE THE KEY THINGS THEY SHOULD LOOK FOR?
A. The first observation I have is that some startups really want advice and some just want a name to put on their list of advisory board members.
I am an advisor to one company where I just grab lunch or dinner with the founders once a year or so and occasionally help with an introduction. I have no problem with that. There’s a place for that. If that’s what you are looking for, then you should focus on finding a guy with the right title. That’s pretty simple.
In other cases though, the founder is thirsty for knowledge. Many of these startup founders have never worked in a corporate environment and they don’t know anything about what it takes to make a wafer and to ship a part. They don’t understand semiconductor quality systems or device characterization or why simulations don’t always work. They know they have to do a layout and send the mask set to a fab, but then it goes into a black hole. They’ve never marketed. Never sold. Never kept books. Never raised money. If you’re a founder like this who is aware that you don’t know certain things but need to learn them, then you should look for an advisor who has these experiences and can teach. So in the end, it depends on what you want. If you want a big name, get a big name. If you know you haven’t done business, then you better find someone who has done it. And of course, the chemistry thing is important! Don’t sign up anyone who you don’t enjoy being around!
Q. WHAT ARE YOUR THOUGHTS ABOUT INCUBATORS AND SHOULD STARTUPS DO THEM?
A. I love incubators, particularly for semiconductors. Who can afford to do a semiconductor start-up without help with the in-kind tools and services? Tape-outs never work right: you need to do them over and over again. You can’t pay for that on your own, you need to get on a shuttle. To do a state of the art product tape-out requires a boat load of tools which you can’t afford to buy on your own. Some of the fabs and design tool companies have programs with which you can get help but it usually isn’t as complete as what an incubator like Silicon Catalyst can provide. So, yes semiconductor start-ups should jump at every opportunity to hook up with someone like Silicon Catalyst.
There’s a less obvious benefit too. Silicon Catalyst also does a good job of giving structure to a start-up. The quarterly presentations of company status and progress force some discipline that might not otherwise be there and the audience of experts in the semiconductor field can often help spot and remedy upcoming problems before they become critical.
Bottom line: anyone who is doing a silicon start-up without an incubator is probably screwing up.
Q. WHAT DO YOU THINK THE FUTURE HOLDS FOR SEMICONDUCTOR STARTUPS?
A. We are now about a $400 billion dollar industry. I remember when we were just passing $1 billion for the first time. The biggest, most successful tech companies are totally dependent on silicon. Apple, Cisco, Intel, Facebook, etc. would die in a hurry if semiconductors ceased to exist. In fact the world as it is today would die without semiconductors.
But semiconductors have become a big-company business. We’ve had this surge of “big company eats little company”. That’s a little scary. I believe that most of the innovation still happens with the little guys. If there were no more little guys, innovation would slow down. Fortunately, we haven’t come to that point yet. There always seem to be a few more startups coming on the scene. So, it’s still a workable model, but it’s different than the old model. The Valley used to be full of 100 million dollar companies. Not anymore. They’re all gone. I don’t think that will ever turn back around. There will be a handful of big companies (Intel, Texas Instruments, Broadcom, etc.) that dominate the business. Hopefully, though, there will be a never ending flow of startups bringing innovation.
Q. ANY PARTING WORDS OF WISDOM?
A. I remember being associated briefly with Exxon, the huge oil company, back in the late seventies. They had an office in Manhattan with a bunch of super smart guys who understood technology. They had experts of every new technology that was coming along. They also had a separate bunch of experts who only understood markets and what was going to be wanted 5-10 years down the road. The goal of that effort was to find the intersection points. Where was an emerging technology going to intersect with a new, rapidly growing market? Where would a new market that was about to emerge intersect with a blossoming technology? That, to me, is a good way to look at things and an interesting way to conduct business. That’s what start-ups should be doing and that is what Silicon Catalyst should be helping them do.