An EDA Startup's First Product

Extracts from a panel at the 1998 Design Automation Conference on an EDA startup’s first product. Highlights remarks by John Sanguinetti.

An EDA Startup’s First Product

Chair: Erach Desai – Sound View Financial Group, Inc., Stamford, Ct.
Organizer: Mike Murray – Acuson Corporation, Mountain View, Ca.

Panelists:

Rick Carlson – Synplicity, Inc., Sunnyvale, Ca.
Lone Cooper – Sente, Inc., Acton, Ma.
Dean Drako – Design Acceleration, Inc., San Jose, Ca.
Rajeev Madhavan – Magma Design Automation, Inc., Palo Alto, Ca.
John Sanguinetti – Modellogic, Inc., Los Altos, Ca.
Curt Widdoes – 0-In Design Automation, Inc., San Jose, Ca.

Abstract How does a novel EDA idea get transformed into a commercially successful product? Six veteran EDA entrepreneurs will discuss their experiences in bringing their companies’ first products to market. Where did their ideas come from? How did they know their ideas would meet real customer needs? And how many customers would there be? How are evolutionary and revolutionary products developed and marketed differently? When did the entrepreneurs stop developing and start shipping? Who were their competitors and their partners? Did they adopt industry standards or create new ones. How did they use DAC, advertising, and the WWW to promote their products? What are the relative merits of direct, VAR, and OEM selling?

John Sanguinetti was the founder and CEO of Chronologic Simulation, a startup that developed a compiled code approach to Verilog simulation. I am working on an interview with John and came across a very interesting position statement he gave as a part of a panel at DAC 98 called “The EDA Startup Experience: The First Product.”

John Sanguinetti, Modellogic

The key ingredient to launching a successful EDA startup is customers.

Having a particular type of customer in mind, and a particular customer if possible, and knowing what their needs are is the key. In my case the original customer prototype was myself, since I had been a design verification engineer and used Verilog for regression testing. Very early on, we identified a particular customer, Sun, to be our target customer. We figured that if we made Sun happy, we would make other people happy, too. This turned out to be true.

We also identified the problem we were solving–simulation speed. We focused almost entirely on that, from company slogan (The Fast Verilog Company), to advertising, to customer benchmarks. The acceptance criterion for our product in competitive benchmarks was always “how much faster is it than the competition.” This focus was used internally in making design decisions as it was externally in positioning the company and product against competition.

If there is anything that can be generalized from Chronologic’s experience it is the value of a single focus on a real customer problem.

Rajeev Madhavan, Magma Design Automation

EDA start-ups are successful when a product is created to address a compelling customer need. The company’s potential financial success is directly related to the size of the customer need. The company’s focus on this customer need must be singular, directed, and complete. Start-ups need to focus on only one initial product in their core competency. A common start-up mistake is to
attempt to financially bootstrap the company with consulting or smaller products. These efforts may provide needed cash but can
seriously defocus the company away from its main product.

A start-ups real assets are its people: employees and potential customers. A crucial factor is recruiting an experienced capable team where each member has a clear purpose. Many start-ups fail to spend enough time understanding all of the detailed customer requirements. Successful EDA ventures use innovative approaches to address customer needs.

Rick Carlson, Synplicity

I have been involved in several EDA start-ups since 1982 (Mentor Graphics, Daisy Systems, EDA Systems, Escalade, and
Synplicity) as a sales manager or sales executive, and I have found that the companies that were successful had a number of key ingredients that made their first products winners. These ingredients:

Compelling technology that can be built into multiple products
Dynamic market
Strong, well-rounded management team that can work together
Well thought out sales and marketing strategy
Unrelenting desire to listen hard, tell the truth, and be flexible

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John Sanguinetti on an EDA Startup’s First Product