Posts Tagged ‘lsi logic’

PART TWO: DID WE JUST HEAR THAT?

April 7, 2021

By Peter Zaballos

TALES FROM THE EARLY-ISH DAYS OF SILICON VALLEY

Managing the product marketing at LSI Logic for silicon valley and the greater Bay Area in the 1980s was equal parts daunting and thrilling. I wrote earlier about how groundbreaking LSI’s custom semiconductor technology was and how it helped unleash a massive wave of innovation across the landscape of computing.

LSI made it possible for a startup to come up with a product, and build it in just a few months. We helped lower the cost of starting a company, and shortened the feedback loop to that company finding out of their product hit the mark. And at this point in the computing industry, Apple had proven the merits of a personal computer with the Apple II (launched in 1977), and IBM validated Apple’s direction by introducing the IBM PC (launched in 1981).

But the world (and users) needed so much more to make these tools really productive. Bigger disk drives. Better graphics cards. Support for printers. So these Apple and IBM – along a host of other IBM PC clone makers (Texas Instruments, AT&T, Radio Shack, HP, Commodore,..and literally 100+ others) – stormed into the market to get their share, and add their value.

And the rapidly customized semiconductors we invented at LSI Logic fueled and enabled them all. It seemed like every new customer we met with was planning for a big future – either with a truly novel new product or a quick copy of someone else’s – they all had production volume forecasts in that classic “hockey stick” growth curve

I was a year or two out of college, and my days were spent meeting with customers or prospects, spending time with our salespeople, and crafting six and seven figure revenue deals those hockey stick volume curves promised.

It wasn’t exactly a bubble forming, it was more that entirely new categories of computing appeared on the scene, and there was a scramble to fill the voids this innovation created. The two big areas we saw our customers furiously attacking were the markets for graphics cards and disk drives. I was literally in meetings from 8am to 6pm every day with companies bringing products to those markets.

[And I learned that this would be my “normal” for most of my career. In meetings all day accumulating work to follow up on, then spending most of the night and early morning getting all that work done. This really never changed. In my last two roles as CMO of two tech companies it was the same. All that changed was the nature of the work I was doing, but the pattern remained the same throughout.]

And unlike today’s elastic cloud computing world of software where supply is never an issue, in the semiconductor industry, supply is always the issue – just ask anyone in the auto industry, like General Motors, right now. There’s a finite number of chips on a wafer. A finite number of wafers that can be processed each day. And capacity increases are generally measured in “buildings” – so ramping capacity takes lots of time and lots of money.

So while we were furiously meeting with all these companies storming into the graphics card and disk drive markets, we were also having to assess their likelihoods of succeeding, and try to figure out who would get what allocation of our finite supply of wafers. This was a real issue, 98% of these graphics card companies went bankrupt or were sold for scrap eventually. The same for disk drive companies.

Consolidation in the disk drive industry at a high level

Allocating capacity to a company who failed in the market meant we would not ship those wafers/chips and collect OUR revenue – and as a public company, our revenue forecasts mattered a lot. So every new piece of business of any significance was something we all scrutinized, frequently meeting with the CMO (Bill O’Meara) or the CEO (Wilf Corrigan) before closing a deal.

The flip side of that was every company we met with was convinced (as they should be) that THEIR revenue plan was rock solid. And since it was a competitive market (generally we competed against smaller firms like VLSI Technology, or the custom chip divisions of larger semiconductor companies, like National Semiconductor) we had to fight hard to get orders.

This all created a wild environment, and whenever there’s loads of demand coupled with a constraint on supply, weird behavior starts to show up.

DID WE JUST HEAR THAT?

I remember going to meet with a customer in Berkeley who made popular graphics cards. I went with our sales rep who happened to have recently come to the US from Ireland and I think part of his enjoyment was experiencing this industry in the context of American culture. He was super smart and had an awesome sense of humor. He picked me up and off we went up the freeway to the customer.

The salesperson, Fra Drumm, had been meeting with this customer for weeks, and had been told they were ready to place a $1M+ order for a new graphics chip they wanted us to make for them. And they were also speaking to our main rival, VLSI Technology. It was going to be super competitive. This was an important piece of business we wanted, and we’d had a meeting with Bill O’Meara reviewing the terms we were going to propose and what room we had to negotiate. 

Bill wanted me to call him as soon as we left the meeting to let him know how the negotiation went.

Vintage Gucci Luggage Set

We got to the company and were seated in the Purchasing Manager’s office, made introductions, and quickly reviewed the outlines of the potential order. When we pressed for an indication of how competitive we were the Purchasing Manager waited a bit, and then said that they liked Gucci luggage. And I thought, “not my style, but lots of people like it” and I said something like “that’s interesting, a lot of people love that.”

Silence

The Purchasing Manager again said that they liked Gucci luggage.

I glanced over at Fra real quickly and he gave me a look that said “WTF? Did we just hear that?”

It dawned on us both, at that very moment, that we were being asked to buy this person some Gucci luggage to get the order. 

And we both had the same reaction. We quickly apologized for having to leave, but we had another meeting to get to and would be in touch.

And we left.

I was pretty bewildered. There was no way I was going to bribe this person, but I also wondered if I had blown up a big piece of business over the cost of some luggage, and immediately got worried about the reaction Bill and the other sales leaders would have to this.

This was right about the time that “car phones” were a thing, and when we got into Fra’s car I dialed Bill and told him about the Gucci luggage “hint.”

He asked what I did, and I told him we got out of there as fast as we could.

He had a quick and curt reply: “Good” followed by “that’s not how we work.”

At the time I was relieved. It is only with hindsight that I can see that something I had taken for granted was the integrity of Bill and the other leaders at LSI Logic. I’d only known Bill for months, and never really had an issue like this crop up. It was reassuring at the time, to say the least. BTW, that graphics card company was out of business within the next year. We dodged an allocation bullet there.

But as I progressed in my career I came to realize just how unique the culture at LSI Logic was. How important it was that we built that business with integrity.

At some point in the next year one of the sales reps at a distribution partner got ahold of the price list for VLSI Techology’s products and brought it to our office. For a nanosecond we were thrilled. When Wilf Corrigan found out about he was livid (and he was unambiguous with his anger) and instructed us to get it out of the building. Now. Which we did. Unambiguously.

Going back to Bill O’Meara’s reaction, he provided me with an internal reference for how to behave under pressure, how to keep clarity on what really mattered. At various points in later in my career I worked in organizations where I witnessed salespeople lying to get orders. In some cases lying to me in my role as an executive to get an order. And in those organizations the CEOs did not have Wilf and Bill’s integrity, and reacted with “but we got the order.”

No surprise that I left those companies and wondered how I chose to work there in the first place because it is critically important that you work with people who have uncompromising integrity. Because every business runs into problems. And it’s when you’re facing those problems you want the people above and around you making decisions you can stand behind.

That was the best Gucci luggage I never bought.

Truth is relative and changes with perspective

June 4, 2009

My post about ambiguity and alignment provoked some really interesting comments, which I wanted to circle back to.  One comment in particular got my attention

It was an observation that truth is relative and it changes with perspective.  At a certain level that makes sense to me.  Truth can seem to be defined by the winners of the battles, by the dominant doctrine, by the loudest voice. 

The person commenting also observed that because of the relative nature of truth “good people can make poor choices at the crossroads.”

And this brought me to realizing that not only is truth relative, it quickly gets intertwined with morality.

In startup companies I think this is super important.  We’re battling the dominant doctrine of the market, striving to fight or become the loudest voice, working so hard to win.  And we’re doing so under enormous, constant pressure.  Keeping hold of what you believe is true and right can be difficult when it seems like survival is the order of the day, every day.

So you might find yourself in an environment where the pressure is explicit and relentless to place your company’s interests ahead of your customer’s, or your investors.  What is true then?  Well, the Entellium duo felt it was true that if they missed their revenue forecast they’d be fired, and made some really poor choices at that crossroad.  The truth was certainly relative for them.

But the more I talked to my friends about this “truth is relative” conundrum, the more I seemed to be saying there is no real truth.  I was explaining it away.  And it shocked me.  My initial reaction was that the last place you want to go is to say there is no absolute truth.  But actually the more I think about it that’s where I do end up.  The truth in your daily life is completely relative, it’s not absolute.  Except that what it’s relative to is what’s true to you.

When I was at LSI Logic in the early days as a product manager I remember going on a sales call at the end of the quarter to help a salesperson close a huge deal.  We found ourselves seated across from the purchasing manager, who was the wife of the founder,  reviewing the terms of our proposal only to hear her ask for a gift.  She said “I’d like a Gucci purse”.  I heard it as a non-sequitur.  Maybe her birthday was around the corner.  I tried to keep the conversation moving, but it quickly dawned on me that the gift was separating us from this order.I looked over at the salesperson, and we exchanged nervous, and puzzled looks.   

The salesperson and I ended the conversation as quickly as we could, got up and left, I called my boss (using my spiffy “car phone”) and relayed what had happened.  I was in a turbulent state of mind.  We needed this order, and I just made the call to walk away from it.  He was disappointed, really disappoint we lost the deal but supported the decision to walk.  I was relieved to be in a company where we shared this same sense of right and wrong.

I’ve told this story a lot, to me it’s a pure ethics example – it’s the one I put on my business school applications (they all had a question like “Describe an ethical dilemma you’ve encountered and how you handled it”). 

Except I’ve repeated it to people I have first hand experience with and know to be people of solid integrity and had them say “Hmmm…not sure if I wouldn’t have just gotten the purse, and the order.”  And it made me realize I made my choice based on my personal “truths” and these people would have made different choices for their own.  And each of us would have felt like the choice was aligned with our morals.

Another friend told me this topic sent her to look up the meaning of “moral relativism” – that moral/ethical propositions are measured relative to their circumstances.  More important, that only personal subjective morality expresses true authenticity.  Your personal sense of truth = the authentic you.  The other person looking back at you in the mirror.

That means you have to know that person in the mirror really well to remove the ambiguity in what happens at the crossroads.  You need to have an intimate and unabashed knowledge of what you yourself believe to be true about yourself.  If you lack that, well the easier it will be for you to be seduced by or succumb to the loud voices, the accepted doctrines, the winners of the battles.

A-players hire A-players, B-players hire C-players

April 28, 2009

This is one of those sayings in the startup world that is so accepted that it’s crossed the border of familiarity and become a full-time resident of the land of trite.  

Guess who coined it?  Steve Jobs.  That’s right, Steve Jobs, when he was getting the Macintosh off the ground.  It’s a phrase we used at RealNetworks a lot, and one that my partners and I use as a result. 

But that it’s trite doesn’t mean it isn’t relevant or true.  It is.  Absolutely. 

And it’s a subtle but important concept to really understand.  What do A-players do for you?  Everything.  Most important, it’s the tone they set in the organization and their influence on the behavior and performance of others. The hiring is critical too, but that’s a byproduct of everything else.

  • A-players are at the top of their game.  This means they know the difference between good and great.  In the work they do, and in the standards they set for those around them and those in their organizations.
  • A-players aren’t threatened by someone better than they are.   Rather, they’re relieved.  That stuff they were struggling with?  They’re happy to get that into the hands of someone who can run with it, faster and more nimbly.  How liberating.
  • A-players know what they don’t know.  A corollary to the point above is that A-players know when they don’t know something, and ask questions.  They have the security to not need to know the answer to every question, and know how valuable intellectual curiosity is.
  • A-players can’t tolerate C-players.  So they make sure the C-players are replaced.  And guess what? The rest of the organization is relieved and inspired.  They know who the C-players are, and have felt the drag on performance.  It may sound harsh, but it’s true.

To me the most essential capability A-players bring to an organization is the tone they set for it.  Their definition of “good” is so much greater than a B or a C player’s, it’s as if they’re speaking a different language.  In fact they are, and it’s critical the organization you’re in all speak the same language. 

This is why starting up companies is so liberating for A-players.  I remember when I was at LSI Logic in the early days, fresh out of college with my head spinning in this startup.  The CEO, Wilf Corrigan, made a comment to me once about why he loved being CEO of LSI Logic so much more than being CEO of Fairchild Semiconductor (which he had been before founding LSI).  He said “because I created a company with only people I wanted to have there, not ones I inherited.”  At the time the answer sounded sensible, but now I realize what he meant was he could hire A-players from the start. 

But don’t get me wrong.  A-players are not a homogenous bunch.  There’s a huge, huge spectrum of abilities and characteristics among them.  Some can be incredibly thoughtful and compassionate, others can be intellectual bullies and seemingly heartless.  But the connective tissue that binds them all together?  They know where to set the bar/standard and how to hold themselves and everyone around them to it.