"Zeevo: A Startup's journey" by Vikram Gupta

BITS Pilani Alumni Association (www.bitsaa.org) August 26, 2006

Zeevo – Looking back


Agenda

The Company -- History, timeline and some key notesMarket assessment and other companiesPerspective – looking backTake-aways


The Idea

Founded in Sep 1999 Vision was to drive the cost down of wireless chip by doing SOC’s with radios in CMOS technologyThe first market: Bluetooth

– Short range wireless standardValue proposition was a single chip Bluetooth solution with

– Embedded processor and associated SOC– Bluetooth link layer– Bluetooth radio– Lower layer BT software stack

The founding team comprised of four people with the following background:– 1 Marketing– 1 Systems– 1 RF IC– 1 Digital


Rounds of Funding

5 rounds of funding– Series A: Sequoia Capital -- 1999– Series B: Raza Ventures -- 2000– Series C: Dell Ventures -- 2001 Highest– Series D: WK Tech -- 2002– Series E: Winbond Electronics -- 2004

Total raised $85 millionAcquired by Broadcom: $32 million -- 2005


Notable milestones and stats

Key Milestones– First Employee: Oct 99– First Tapeout: Nov 99– “Peak sentiment”: Mar 01 (see next slide)– Sampled to customers: Apr 01– Shipped millionth chip: Nov 03– Exit – Mar 05

Misc– Number of employees at peak: 90 – Key Customer: HP– Names: 3– Number of layoffs: 3– Number of building moves: 3– Number of CEO’s: 3


The peak

Mar 2001Solution was about to sample to customers – everyone was optimisticHighest number of employeesComing out party


The Nadir

Sep 04Burn rate was still going to be greater than profits– Another RIF was coming– Another round of funding looked necessary

Lot of team members had been with the company for about 4-5 years and were getting tiredInvestment banking firm was hired soon after


Investment Bankers

Help companies decide on strategy involving– Mergers and Acquisitions– Capital financing

For startups– Generally means help us get acquired

SVB Alliant was the investment banker hired by Zeevo


The Acquisition Process

Initially– Lots of preparation

• Slides, demos, individual meetings– Different suitors want different things– Exciting

• Since change is imminent (one way or the other)

Once a deal is in the works, more activity – Reviewing all contracts– Deeper dive into the technology– Employment offers– Incentive packages (if applicable)

Not an easy process – lots of hard work and tension


Post-Acquisition

Things don’t stopHave to deal with– New environment– New culture– New Chiefs– Possibly new direction– Possibly new technology

Establish credibility all over againGot to prove the acquisition out…


How did the market do


How did other companies do

Bigger companies– Ericsson – exited the market– Intel – exited the market– TI – in play– Infineon – in play

Company Exit When NotesCSR IPO J an-04 ~ 200 million/quarterInnovent Acquired -- Broadcom J ul-00 440 millionPivoltal Technologies Acquired -- Broadcom May-00 250 millionTransilica Acquired -- Microtune Dec-01 170 millionSilicon Wave Acquired -- RFMD 4-Apr 11 millionSignia Tech Still AroundGCT Still Around


Few things that went wrong

Development– Too much risk in too many areas– Too conservative in some others– Stumbled in a few places

Marketing– Not very targeted– Never went after the highest volume market – Cell phones

• Ultimately targeted a niche segment (stereo headphones) in a huge market that never took off

– Did not effectively identify real opportunities from the noiseUnder-estimated the competitionDid not leverage or outsource well


More..

Operations– Could never get the cost under control until it was too late

Management– Was inexperienced in certain areas– Did not curtail spending in the early days

• Including hiring– Did not make hard decisions quickly enough

People– Some were not startup material

Communication– Did not have a very good meeting culture– We always gave the good news or put it in good light


What did we do well

Good architecture– Good technical team – Came up with creative solutions

As a small company, we were able to keep up with BT spec changesHired people with diverse skill-sets to create a company identity – RF, Digital, Firmware, Application, Packaging

Generally good work atmosphere– Excellent retention rate– We had fun

Attempted to communicate a lotWhen things did not go well, team showed resilience


Personal Learning's

Strong experience in the overall process to deliver wireless systems– Exposed to a broad swathe of technical and business issues

Appreciation and understanding of the application of technology in the context of the customerTook the opportunity to participate in Marketing and Operations roles Learned about the– Workings of a company, people-issues, governing influences,

self


Parting shots

Don’t get carried away by technology– Its about the return to the investors

Not every problem has a technological solutionDon’t take more risk than you should– Keep things simple

Standards always take longer to get adopted than projected


Parting shots (Cont.)…

Experience counts – listen to the expertsTake one step back to take two forwardIf it seems wrong, it is! No one knows any better– Speak your mind

Align with other founders and the investors OR don’tSpend the money as if it were your ownPut the right folks in the right places and get the wrong ones out – ASAP!Enjoy the ride – don’t misplace priorities AND keep the pace going


Summary

Doing your own venture is a great opportunity and experience– The journey is eventful and the outcome could be

fabulous

"Zeevo: A Startup's journey" by Vikram Gupta

Business

Transcript of "Zeevo: A Startup's journey" by Vikram Gupta