success factors for value creation in the era of ...rustec.asu.edu/2012/serge-leef-1.pdfserge leef,...

Success factors for value creation in

the era of technology convergence

Serge LeefVice President, New Ventures

General Manager, System Level Engineering DivisionGeneral Manager, System Level Engineering Division

Mentor Graphics Corporation

May 2012

Serge Leef background

Arizona State University: BSEE (1983), MSCS (1985)

Intel: 4 years — Software Engineer � Senior CAD Development Engineer

� Switch & RTL Simulation, Synthesis, APR

Microchip: 2 years — Manager, CAD/CAE

© 2010 Mentor Graphics Corp. Company Confidential

www.mentor.comSerge Leef, Information and Communication Technology Research Forum, May 2012

— Manager, CAD/CAE � RTL Simulation, APR, Floorplanning

Silicon Graphics: 3 years— Director, Corporate Design Automation

� Cycle Simulation, Logic Synthesis, Co-verification

Mentor Graphics: 21 years— Engineering Manager � Engineering Director � GM � VP

� GM, System Level Engineering Division� VP, New Ventures

2

SYSTEM DESIGN CHALLENGE


www.mentor.com

SYSTEM DESIGN CHALLENGE

Serge Leef, Information and Communication Technology Research Forum, May 2012

Progression in System Design

1970 1980 1990 2000 2010 2020

Digital SignalProcessing

MultiprocessingGigabit,

Non-volatileMemory

Integrated System Design


www.mentor.com

Microprocessor

DesktopComputer

Packaged IC

Military & Aerospace

Communications

Consumer


EnergyMedical

IndustrialAutomotiveAerospace

4

� Domain-specific

� Highly heterogeneous

� Distributed over networks

Highly interactive with physical world

Attributes of Embedded Systems


www.mentor.com

� Highly interactive with physical world

� Require multiple disciplines to implement

� Validated mainly through physical prototyping

� System integration and test organizations are pivotal

� Subject to rigorous quality, certification, qualification rules


Typical System Architecture

PSU / Power ManagementPSU / Power ManagementIn

puts

sig

nal

Inpu

ts s

igna

l co

nditi

onin

gco

nditi

onin

g

Inputs Processing Inputs Processing FPGA or ASICFPGA or ASIC

CPUCPUControl Control

AlgorithmsAlgorithms

Outputs Processing Outputs Processing FPGA or ASICFPGA or ASIC

Out

puts

sig

nal

Out

puts

sig

nal

cond

ition

ing

cond

ition

ing

Cockpit commands,

Sensors(e.g. speeds, pressures,

temperature,

Solenoids,Valves,Stepper Motors,Sensor

Excitation

Portable Energy Source (Battery + Alternator)


www.mentor.com

Inpu

ts s

igna

l In

puts

sig

nal

cond

ition

ing

cond

ition

ing

AlgorithmsAlgorithms

Out

puts

sig

nal

Out

puts

sig

nal

cond

ition

ing

cond

ition

ing

temperature,valve position)

Comms

Excitation signals,Comms

Bypass controlsBypass controls


ECUNETWORK

PLANT

System Example: Car


www.mentor.com

� Hundreds of PLANTs

� 40-80 ECUs (4-32 bit CPUs)

� Up to 10 NETWORKS of 4+ distinct types

Modern vehicle is a complex, distributed compute and control system


System Example: Airplane

3rd network

ServerTerminal

Display Switch

Router

WindowsGalley

Seats………

Lights

Avionics(AFDX + ARINC 429 - CAN) IFECab OpsA/C Ops

S ystem A S upplier xx Su pp lier yy



IM A

LR U

LR U

S W ITC H

LR U

LR U

IM A A FDX

w orld

C A N node 1

C A N node 2

C A N node n

C AN n od e 1

C AN node 2

CA N node n

System B

SW ITC H

L R U = Line Re place able U nit IM A = In teg rated M o dular A vion ic (G a te w ay function)

8

System Example: Guided Missile

In-flight power management for guidance �


www.mentor.com

Post-impact detonation �


Medical: Multi-physics interaction and test

Hospital-based

Pacemaker

Surface ECG

Blood Pressure

TemperatureData Link


www.mentor.com

� Multi-domain, multi-physics medical system� Human body physiological sources

� Electrical sensors and actuators

� Ultra-compact low-level embedded software /

digital control

� High performance GUI and medical monitor

embedded software

Hospital-basedremote heart monitor

Blood Pressure


INNOVATION OPPROTUNITIES


www.mentor.com

INNOVATION OPPROTUNITIES


System Design Challenges

� Design requirements are becoming more complex

� Lower cost, lower power, lower weight

� Increased performance, reliability, or safety

� Convergence of multiple disciplines

� Everything has to work together: Digital, Analog, Software, Mechanical, etc.


www.mentor.com

Digital, Analog, Software, Mechanical, etc.

� Multi-company, distributed supply chains

� Complicated communication via a number of domain-specific file formats, tools, and protocols

� Design optimization

� More than just getting a design to ship, a successful project relies on predictable schedules, and optimization of Reliability, Performance, Manufacturing Cost, and Life-cycle Cost


SpecificationsSpecificationsSpecificationsSpecifications

How do you design the whole system?

Embedded Embedded Embedded Embedded SiliconSiliconSiliconSilicon


www.mentor.com

DigitalDigitalDigitalDigital AnalogAnalogAnalogAnalog

Mixed Mixed -- SignalSignalMixed Mixed -- SignalSignal

Sensors & Sensors & ActuatorsActuatorsSensors & Sensors & ActuatorsActuators

Plant / Plant / MechanicalMechanical

Plant / Plant / MechanicalMechanical

Application Application SoftwareSoftware

Application Application SoftwareSoftware

Platform Platform SoftwareSoftwarePlatform Platform SoftwareSoftware

Embedded Embedded SoftwareSoftwareEmbedded Embedded SoftwareSoftware

MultiMulti --PhysicsPhysicsMultiMulti --PhysicsPhysics

SiliconSiliconPlatformPlatformSiliconSilicon

PlatformPlatform


DataDataTrafficTrafficDataData

TrafficTrafficProtocolsProtocolsProtocolsProtocols

NetworkNetworkNetworkNetwork

13

Need to Remove Walls between Disciplines

MechanicalMechanical ElectricalElectrical

ElectroElectro--MechanicalMechanical

Sensors & Sensors & Actuators &Actuators &

�� ThermalThermal�� Mechanical Mechanical �� FluidicFluidic�� Mass TransferMass Transfer

Analog, Digital, & Analog, Digital, & MixedMixed--Signal circuitsSignal circuits


www.mentor.com

ControlsControlsSoftwareSoftware

ControlControlCircuitsCircuits

Actuators &Actuators &SpaceSpace

Digital Digital ControlControlMicroMicro--

controllerscontrollers

DSP DSP ProcessingProcessing

Transfer Transfer functionsfunctions

�� Advanced AlgorithmsAdvanced Algorithms�� Signal Processing Signal Processing �� Embedded ControlEmbedded Control�� SupervisorySupervisory�� GUI & PresentationGUI & Presentation

––

++

++

CmdCmd

AngleAngle

ieqsieqs

iesies

ww

kkss


How to Pursue Innovation in System Design?

� Big companies rarely succeed in innovating� Stagnant organizations resistant to change (IBM PC example)

� Risk/reward ration is all wrong ($10M exit event)

� Cycle: dissatisfied employees to entrepreneurs � Purchase model: front and buyout


www.mentor.com

� Solution� Accept a combination of organic and external

� Looking at 100 opportunities per year

� Closely examined 20

� Bought 7 - ranging from $2m to $70m

� Each GM seeks related or augmenting startups

� I looked at 10 last year: Sweden, Germany, Hungary, US, France


INNOVATION SUCCESS FACTORS


www.mentor.com

INNOVATION SUCCESS FACTORS


What makes a good environment for

technology ideas and start-ups?

� Location, public policy and culture play key roles

� Creativity is only one factor leading to possible success

� Elements essential for successful innovation ecosystems:


www.mentor.com

� Education infrastructure

� Business-friendly climate

� Risk capital ecosystem

� Culture of failure


Education Infrastructure

� University research� Mechanisms for funding relevant programs

� Relationships with professors who recommend best students

� Entrepreneurial professors drive commercialization of inventions

� Technology transfer� Rights should be transferrable or licensable at predictable cost


www.mentor.com

� Rights should be transferrable or licensable at predictable cost

� If not predictable, established companies do not get involved

� Government links� Governments are NOT good venture capitalists

o Typical goals are prestige and employment

o GREED must be the key driver for capitalist enterprises

� Governments can play a role by focusing researcho Select areas of national interest

o Facilitate through funding University/Industry partnerships


Educational collaboration examples� France: IRT �� Large scale initiative

� Government objective:o Keep the French research competitive

o Strengthen the link between research and industry

� Allocated millions of € to improve GDP growth via tech sector

� 5 centers of excellence: biotech, nuclear, semi, aero, systems…

� Establishes locations for each; facilities free to participants

� Each center is driven by 3-way partnership amongo Universities, Government Research Labs and the Industry

o 50% to 90% of personnel costs are subsidized


www.mentor.com

o 50% to 90% of personnel costs are subsidized

� USA: CHREC �� Small scale initiative� NSF (National Science Foundation) driven consortium

� Focus on “Domain-specific Computing” via reconfigurable hardware

� 4 University research teams: UF, VT, BYU, GWU

� 10-20 industrial sponsors providing funding and direction

� Technology transfer options available to the sponsors and can be

licensed to other companies within NSF-inspired framework

� Great source of future hires for the industrial sponsors


Business Friendly Climate

� Corporate registration� 2-5 days in US, Canada, Australia, New Zealand

� 152 days & 50 steps in Brazil

� Legal system� Strong protection of intellectual property

� Means to enforce contracts

� Rapid adjudication of disputes

� Bankruptcy laws mitigate downside risks to

Most and least friendly countries to small biz

Rank CountryFSB

Score

1 New Zealand 2.03

2 United States 2.01

3 Canada 1.99

4 Australia 1.93

5 Singapore 1.88

6 Hong Kong 1.86

7 United Kingdom 1.85

8 Ireland 1.85

9 Denmark 1.75

Most and least friendly countries to small biz

Rank CountryFSB

Score

27 South Africa 1.32

28 Malaysia 1.31

29 Colombia 1.29

30 Russia 1.29

31 Austria 1.28

32 Mexico 1.26

33 Turkey 1.26

34 Korea 1.25

35 Czech Republic 1.24

36 Italy 1.2


www.mentor.com

� Bankruptcy laws mitigate downside risks to

investors

� Tax policies� There should not be any business taxes while

the startup is in the investment mode and has

revenue below certain threshold

� Employment regulations� Need to be able to rapidly adjust to funding and

business conditions

� Labor costs must scales smoothly and

predictably


9 Denmark 1.75

10 Iceland 1.75

11 Norway 1.7

12 Sweden 1.64

13 Japan 1.64

14 Finland 1.6

15 Thailand 1.6

16 Chile 1.59

17 Israel 1.59

18 Latvia 1.57

19 Switzerland 1.57

20 France 1.5

21 Jamaica 1.49

22 Netherlands 1.45

23 Belgium 1.45

24 Germany 1.37

25 Portugal 1.36

26 Peru 1.33

36 Italy 1.2

37 Taiwan, China 1.15

38 Spain 1.11

39 Hungary 1.11

40 Slovenia 1.1

41 Uganda 1.05

42 China 1.05

43 Argentina 1.04

44 Poland 1.02

45 Croatia 0.95

46 India 0.94

47 Jordan 0.94

48 Uruguay 0.92

49 Ecuador 0.92

50 Brazil 0.92

51 Philippines 0.9

52 Greece 0.76

53 Indonesia 0.61

Source: Who in the world is entrepreneurial? CNN-Money, Geoff Lewis, June 1, 2007

Risk Capital Ecosystem

• Refine prototype(s) into product• Engage with teaching customers• Pricing, packaging, marketing strategies• Market development

• Achieve product differentiation• Win business against competition• Build repeatable success methodology

•• Sales organization & executionSales organization & execution•• ProductizationProductization and wide deploymentand wide deployment•• Outbound marketing programsOutbound marketing programs•• Public launchPublic launch

• Develop working prototype(s)• Understand the ecosystem• Business model development• Market definition



• Market definition

21

� Phases and Milestones*� Series A funding - $1M to $3M

� Series B funding - $5M to $8M

� Series C funding - $8M to $15M

� Red zone – latest exit point for outside investors

Red zone

*Based on observations of a typical fabless semiconductor startup company, 2006-2009

Risk Capital Ecosystem

� Before Series A� Friends and family

� Angelso Former entrepreneurs - series A or earlier if familiar with space

o Less demanding than real VCs

o More proactive in looking for investments

� State governments invest in early rounds of subjects of

interest - motivation to develop new business segments

� Universities – in California: Stanford, UCB, UCLA, USC,

CalTech provide facilities and access to professors

� Normally nurturing behavior


www.mentor.com

� Normally nurturing behavior


Source: Interviews with ex-head of Investment Banking of a major Wall Street Company, March, 2012

� Venture Capitalists� VCs have specialization; some specialize in A or B rounds; $23.2 billion invested in 2010; $28.4 in 2011*

� There are companies that specialize in mezzanine financing including investment banks and pension funds

� After Series B… � Private equity players can participate instead of VCs, focus on on-going revenue producing companies

� IPOs – most desirable successful exit for the investors, but should not be done until absolutely necessary

� Sub IPOs - create public shell company and merge startups into it.. If the venture is too small for a real IPO,

then use penny stock market to raise capital (many shady players in this space)

� Selling the venture can also be viewed as a success

� Most startups fail

Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors,

and Policy Makers Live By, Scott Shane, Yale University Press (January 28, 2008)

Culture of Failure

“Failure, something we all fear, provides the greatest moment for us to learn. How we

manage or better put how we are honed to manage the process of failure provides not

only the basis for but is the best indicator of future success” - Entrepreneurship: Cultural Views on

Failure A Good Indicator Of Chances Of Success, Ainsley Brown, Commercial Law International, Dec 2011

� Failure carries a huge stigma in some cultures� Can be cross-generational

� Need to find ways to cushion social damage


www.mentor.com

� Need to find ways to cushion social damage

� Develop structures that support “serial entrepreneurs”

� Motivation factors driving serial entrepreneurs*� Need to prove self

� Have a lot of energy

� Need a lot of stimulation

� Starting businesses that will make a difference

� Typically interested in “big ideas”


*Source: Confessions of Serial Entrepreneurs, J. Wang, eterpreneur.com, January 8, 2009

Comparing Success Factors

Success factor US France Japan China India Russia

Education infrastructure Yes Yes Yes Yes Yes Yes

Business-friendly climate Yes No Yes No No No


www.mentor.com

Risk capital ecosystem Yes Some No No No No

Culture of failure Yes No No No Yes Yes


• Educated work force alone is not sufficient for success

24

Summary

� Convergence of innovations in computing, sensors, mobility,

and networking are driving exciting prospects for advances in

automotive, aerospace, medical and consumer markets

� Capitalizing on these opportunities is a challenge for inventors,

entrepreneurs, academics, businesses and governments


www.mentor.com

entrepreneurs, academics, businesses and governments

� Each has a role to play in driving value creation

� Proactive public policy should focus on ALL success factors:� Education infrastructure

� Business-friendly climate

� Risk capital ecosystem

� Culture of failure




26

success factors for value creation in the era of ...rustec.asu.edu/2012/serge-leef-1.pdfserge leef,...

Documents