Madan's Blog

Lighting Lamps

noreply@blogger.com (Madan) — Mon, 27 Oct 2008 03:39:00 +0000

Tomorrow is the Indian festival of Diwali (also called Deepavali), which, literally, means festival of lights. The festival symbolizes the victory of good over evil or light over darkness and many Indians celebrate the festival by lighting lamps. This year, I have the rare opportunity to light some lamps of a special kind. My younger son , Krishnan, and his friends have asked me to be their advisor for the Tech Challenge 2009, an open ended design contest sponsored by the Tech Museum of San Jose.

My first experience with the Tech Challenge was through a volunteer group solicited by the Tech Museum to advise kids in an afterschool program at Lowell Elementary School in San Jose. I wrote about that experience last April. It truly was one of the best experiences of my life. Four of the six teams from Lowell won prizes that year and many of those kids had never done anything like that before or won anything in their lives. They worked well as teams, had fun and learned to solve an open ended design problem and delivered under pressure on the day of the Challenge. I am certain that at least a good number of those kids will make science and engineering a significant part of their lives.

My elder son, Arjun, and his high school friends who decided to join the contest in 2004 on a whim, also won a prize. Arjun and his friends considered themselves "technically challenged" in that they did not have serious engineering or scientific skills. But, after that year they signed up for the Tech Challenge all the years they were in high school and interestingly, won a prize of some kind every year. I am positive that this had a significant impact on their views on science and engineering. Arjun switched from being a biology major this year at UC Davis to being a biomedical engineering major. He chose UC Davis because of the school's reputation for engineering and their penchant for design contests.

Today there is much concern among many industry leaders such as Bill Gates, Dr. Craig Barrett and others on America's leadership in technology and the need to foster an interest in science and technology in America's youth. The last few years have shown me that this is less a function of the money thrown at the problem, but more a function of driving motivation. If you can ignite a spark of interest in one child, you could drive a chain reaction in many other lives. I am looking forward to this year's Tech Challenge. To me, it offers an opportunity to rejuvenate as I watch innovation in action and the whole host of possibilities it drives in a new generation. Happy Diwali !

Madan

Momentum for MEMS

noreply@blogger.com (Madan) — Sun, 25 May 2008 20:50:00 +0000

The MIT Club of Northern California's Semiconductor Entrepreneurship series hosted a keynote address on "MEMS and Startups" by Dr. Kurt Petersen, on May 15th. MEMS are microelectromechanical systems and at nano-scales classified as nanotechnology also. Dr. Petersen is considered one of the founding fathers of MEMS and has also co-founded four startups, Transensory Devices, NovaSensor, Cepheid and SiTime. Dr. Petersen's 1982 review paper "Silicon as a Mechanical Material" is considered one of the seminal papers in the field. You can find his bio summary on the event link. The talk was fascinating in that it covered the emergence and growth of a new industry and the fate of four startups in the space, a story often repeated with some variety in Silicon Valley.

MEMS devices have grown by an order of magnitude every decade from the 1970s. In the '70s the applications were mostly industrial, followed by medical in the '80s, automotive in the '90s and consumer in 2000 and beyond. the volumes have grown from the millions in the '80s to billions currently. Early applications in the '70s were pressure sensors and thermal print heads. Today they cover areas such as pressure sensors, accelerometers, digital light projectors, gyroscopes, oscillators, inkjet print heads, microphones, microfluidics for biotech and many others. In 2006 MEMS was estimated as a $5.6B industry with TI, HP, Canon and Bosch leading the pack with revenues of $905M, $500M, $427M and $374M respectively.

MEMS is everywhere in automobiles with all kinds of sensors, and it is expected that every cell phone will have 6 or more MEMS chips by 2013. Early MEMS devices were built in speciality foundries, but today big foundries like TSMC have announced plans for full scale entry into MEMS . MEMS is rapidly moving to state of the art 6" and 8" wafers. When devices such as the iPhone and Wii use MEMS, clearly there is enough volume to attract the bigger players. With the big foundries entering MEMS, the possibilities for fabless MEMS companies also increase. In fact, Dr. Petersen's SiTime is one such company. He recalled the early '80 and early '90s when they had to beg foundries to build MEMS devices.

Dr. Petersen talked about his experiences with his startups. The first, Transensory Devices founded in 1982 is now part of Measurement Specialties. The second, NovaSensor, founded in 1985 along with Janusz Bryzek and Joe Mallon was funded by Schlumberger with $2.5M in equity and $2.5 M in R&D. The company shipped second source pressure sensors within 7 months of funding and became a first source supplier because of quality and delivery. The company was sold to Lucas Industries in 1990 and acquired by GE sensing in 2004. Today NovaSensor has over $100M in sales. Dr. Petersen described milestones in the company's history such as getting the first borrowed fab, building their own fab after a year and a half, getting sued and going through two layoffs.

Cepheid was founded in 1996 and self funded for 18 months. From 1997 to 2000 they received three rounds of funding for a total of approximately $24M from angels and CampVentures and went public in June 2000. They shipped first product in 2000. Cepheid's mission is to change the way DNA testing is performed using microfluidics and PCR. All US mail is screened for anthrax in Cepheid systems. Today Cepheid has over 500 employees and a market cap of close to $1.4B and derives most of its revenue from the human diagnostics market, but is not yet profitable. The revenue from the USPS is about $40M/year and CPHD is one of Silicon Valley's top 150 companies with a revenue of $130M in 2007. Their GeneXpert has 3 FDA approved human tests and many more under development.

SiTime was founded in 2004 and received three rounds of funding totaling about $43.5M from NEA, Greylock, CampVentures and Bosch. SiTime's mission is to make the first and best MEMS based oscillators in the market. They seek to beat the quartz oscillator cost model of $0.50/oscillator. SiTime shipped first product in volume 33 months after start and is currently shipping over 100k units/week. SiTime is one of the early fabless MEMS companies. Quartz oscillators are used in a variety of devices from watches at the low end to consumer electronics and very low jitter high end devices. MEMS oscillators are initially targeted at the mid-range consumer electronics segment and will penetrate the other markets over time. SiTime is still a private company.

Based on experiences with his startups, Dr. Petersen talked about key startup requirements as being an experienced team which could weather adversity, a market over $200M and advanced technology with IP protection which was inexpensive and met market needs. However, the reality of startups is that they are never perfect, never easy and make mistakes. They also have bad hires, bad times, conflicts due to multiple type A personalities, are frustrating and have poor initial products. However, if the founding concept addresses a market or technical need they are usually successful and can be a very exciting ride.

Yes, these are indeed true of many Silicon Valley startups. But, there are many which don't fit this mold. Sometimes luck plays a large part and being at the right time and right place with a good idea is all it takes. It does help to have a successful startup under your belt if you want VC funding. Dr. Petersen's talk illustrated many of the ups and downs of the startup world which are not readily apparent to the rest of the world who read the success stories of Silicon Valley startups like Intel, Apple, Yahoo, eBay, Google, Youtube and others.

Madan

Is Silicon Valley losing its (Midas) touch ?

noreply@blogger.com (Madan) — Mon, 12 May 2008 06:01:00 +0000

Today's San Jose Mercury News had an interesting discussion on the softening economy and its impact on venture capital. This is a question which gets asked periodically and time and again the Valley comes up with yet another winning streak. First it was semiconductors, then the Internet, now in its second incarnation as Web 2.0, and maybe clean technology to come ? So, why the question now ? The Mercury News draws attention to the first quarter 2008 VC funding results and points out that poor returns are forcing a shakeout in the VC industry and money is flowing to the biggest firms. This, of course, is the essence of capitalism :-) Winner takes all.

What is most interesting is the chart they refer to while identifying the trend. They point to the dip in funding in Q1 '08. The chart, short as it is, from 2005 to 2008, has several dips in it already. I dare say that if the chart stretched back to 2000, there would quite severe dips from 2000 to 2003. :-) But, the Valley seems to come back with a bang. So, I would not count Silicon Valley out yet.

However, it is interesting to look at historical trends and see where the money seems to be flowing to. I really like the Money Tree reports. They let you slice and dice the data many different ways. Here you can see that Silicon Valley's lead is not going to be overtaken in the near term :-) The historical trend also does not show any recent sharp drop off, though, of course its not easy to match 1999-2000. :-) Where are the VCs who used to fund interesting projects like WebVan :-) ? It is rather interesing to watch the historical trends for VC funding for various sectors, like semiconductors , or software, or energy, or medical devices and equipment. Its easy to see what's hot and what's not over some period of time.

Naturally, the VCs seem to follow the money where the sectors are concerned :-) But, the regional dominance of Silicon Valley seems tough to beat in the near term. It does not hurt that the dominant VCs to whom the money is flowing, happen to be here either. However, it is true that globalization has had an impact. Many of the Silicon Valley VCs do have extensive operations and investments all over the world. In a sense, they go where the opportunity exists at any point of time, whether it is India, Israel, China, Korea or Vietnam. But, the Silicon Valley influence remains strong.

Madan

California Clean Tech Open 2008 Launch

noreply@blogger.com (Madan) — Wed, 16 Apr 2008 05:59:00 +0000

The California Clean Tech Open (CCTO) 2008 competition was launched at the San Jose City Hall Rotunda last Wednesday, April 9th afternoon led by San Jose Mayor Chuck Reed and David Rodgers from the US DOE. What was significant about the event was that this was the first time since its inception that the event was held in San Jose.

Maybe San Jose wants to show that the center of gravity for clean technology is in Silicon Valley. The venue was appropriate. It was the steel and glass rotunda of the gleaming new San Jose City Hall. This was my first visit to the new building and I must say it is quite stunning. You can check out pictures of the new City Hall here. There was a glittering reception with the usual Silicon Valley crowd of entrepreneurs, VCs, investment banker, attorneys and the like.

Mayor Reed issued a challenge to solar installers to enable zero upfront cost solar installations for homeowners within 60 days. Seemed like a tall order to me. But, SolarCity seems to have responded to the challenge with a proposal today which eliminates all up front payment for new installations in San Jose. But, unfortunately, the program only lasts for slightly more than 60 days, till the end of July :-) Solar City is funded by Draper, Fisher, Jurvetson and Steve Jurvetson was one of the speakers at the event. Its always interesting to listen to Jurvetson speak. His rapid fire delivery has a high content density and you can lose a lot in a minute if you are not listening. :-) In any case, he believes that the future is clean tech from a VC perspective.

Marc Gottschalk gave an overview of the 2008 competition. Eric Cummings of Cool Earth Solar talked about his company's success and his team's experience during the 2006 CCTO competition. Cool Earth Solar was the first runner-up in the Renewable energy category in the 2006 CCTO competition. They just raised $21M in Series A funding in February 2008. Gunther Portfolio has an even more detailed writeup on them from February. Hopefully, GP will be back in action with more interesting posts soon.

I had a chance to talk with Eric Cummings at the CCTO event. He remembered our meeting during one of the CCTO events in 2006. They have come a long way since then and the competition has helped them build a successful company. There was a poster at the Cool Earth Solar booth which implied that current renewable energy technology was inefficient and would lead to losses by the utility companies who invested in them. Eric seemed to imply that Dr. Borenstein's comments along these lines, a few months back were valid and more efficient alternatives were a few years out.

Overall it was a fun event to kickoff an exciting 2008 competition. Maybe this year's competition will breed more companies along the lines of Cool Earth Solar. The stakes are huge, if the latest award by PG&E to Brightsource is an indicator. The award is for 900 MW of electricity from five solar thermal plants to be built in the Mojave desert. If several of the other clean tech startups in the Valley start delivering on their promise, Silicon Valley will drive yet another global industry after semiconductors and the internet.

Madan

A Parallel World

noreply@blogger.com (Madan) — Fri, 14 Mar 2008 05:21:00 +0000

Today, Reuter's had an interesting article on Craig Mundie's vision of a parallel world. Craig Mundie is Microsoft's Chief Research and Strategy Officer and has inherited the mantle of Microsoft visionary from Bill Gates himself.

The article caught my eye for multiple reasons. I had the good fortune to work for Craig Mundie's company, Alliant Computer Systems (mentioned in the article) quite a few years back, doing what he suggests only a handful of people know how to do, mapping serial applications to parallel computers. It was an interesting experience. These were massive applications running into tens or hundreds of thousand lines of code which had to scale on multiprocessor systems to deliver performance and compete against supercomputers like Cray. The performance delivered could make or break the sale of multimillion dollar systems.

Yes, Craig is a visionary and always has been. To be picked as Bill Gates' successor in this role is acknowledgement enough. But, as he himself points out, having a vision is one thing, predicting when it will happen is another :-) I am sure those of us in the '80s and '90s who thought parallel computing was ready to take off can attest to that.

The current shift to parallel computing is born out of necessity, with single processors reaching capacity limits in terms of heat, power consumption and semiconductor process technology. Craig predicts the arrival of a new "killer app" to take advantage of the coming powerful parallel computing platforms and even a new programming language. He defines his challenge as taking Microsoft past its traditional strengths into new technology areas. This will be interesting to watch, because he has been an advocate of Microsoft's early participation in web based television and other leading edge areas, much before they were fashionable or profitable. It will be like Microsoft taking on some Silicon Valley attributes :-)

This would explain the rate of Microsoft's Silicon Valley acquisitions over the last decade. Dean Takahashi has an interesting take on Microsoft's recent bid for another Valley icon. Speaking of Dean, he has succumbed to the Valley's entrepreneurial lure and has ceased to write for the Mercury News. I am sorry to see him leave because he is one of the best technology columnists I have read and he captures the beat of the Valley so well. But, as always, endings mean new beginnings. I wish him well in his new venture.

Madan

Making money off Social Networks

noreply@blogger.com (Madan) — Tue, 04 Mar 2008 07:11:00 +0000

On Tuesday, February 19th I attended the MIT/Stanford Venture Lab event on Shaking the Money Tree of Multi-Platform Social Networks. Like the one on Green Tech for the consumer market in January, this one was also a sold out event. However, the similarity ends there, since they are two completely different markets. The panel was moderated by Jeremiah Owyang, a Senior Analyst at Forrester and consisted of panelists from two startups Social Media and Rock You and from more established players Bebo and Google, with Kevin Gullicksen from Morgenthaler Ventures giving the VC perspective. Jeremiah gives a nice summary of the event on his most excellent blog, with links to notes from others. As the post states, it was a most excellent event.

Jeremiah's introductory slides classifying the online community and showing the demographics of the creators versus spectators were very interesting. For those interested he has his slides posted on his blog. It would be pointless to reiterate the summary which Jeremiah and others have covered earlier. But, the two things which stood out to me were 1) the proliferation of competitors, perhaps due to the low barrier to entry and 2) the difficulty of monetizing the social networks in spite of a plethora of apps and widgets on sites like Facebook and others. Social Media did point to several of their app developers making some money, but clearly scaling revenue seems to be an issue at this point.

However, what was most striking was the energy and exuberance of the community. Its almost as if they did not care whether they made money as long as they had fun creating the networks and the applications. Perhaps that was the source of most of these networks and the making money part came as an afterthought. It will be most interesting to see which of these networks turn out to be profitable and why.

Madan

Solar Seismic Shift prediction

noreply@blogger.com (Madan) — Fri, 29 Feb 2008 03:53:00 +0000

Green Tech Media's Jennifer Kho has an excellent post on the chances of a shakeup in the solar power industry and what that might mean. Greentech Media's Solar Market outlook panel seems to think a shakeup is inevitable and the only remaining question is one of timing. It almost seems like yesterday that the buzz started :-) Some of the predictions show the shakeout lasting two to three years and being driven by the massive capacity addition and subsequent price competition. The general feeling is that the companies which can ride out the shakeup will be in a great position five or so years out.

Jennifer Kho's post also identifies some of the largest trends affecting the industry such as aggregation, partnerships/acquisitions, cost reductions, cross over from semiconductors to clean tech and others. The posts covering these trends make interesting reading, especially the one showing executive crossover from high tech to clean tech including such luminaries as Bob Metcalfe(inventor of Ethernet) and Vinod Khosla.

Speaking of Vinod Khosla, he is making bold predictions, (again?). He predicts that India will be the next greentech hub, due to the availability of a large pool of scientists and technologists and a potential large market for clean energy. Since India has very little oil and gas resources within the country, historically they have made early attempts at building nuclear power plants and quite a few hydroelectric power plants. In fact, my father was an engineer who was involved in the construction of three or four major hydroelectric projects. As a kid I remember living near those construction sites in the rainforests of Kerala, and visiting several of the dams and the first underground powerhouse in India which he helped construct.

However, India's energy needs are growing by leaps and bounds with the country's progress as also the environmental impact from fossil fuel use. India probably needs clean energy more than most other countries, but Khosla probably is right that mass adoption may not come till prices come down.

Madan

Energy and the Future

noreply@blogger.com (Madan) — Thu, 21 Feb 2008 04:23:00 +0000

Its been a while since I blogged and that has been, in part, due to a hectic schedule. Last Tuesday, February 12th, I helped put on an event on Energy and the Future with the MIT Club of Northern California Semiconductor Series. The speaker was Dr. Amit Kumar, CEO of Combimatrix, who did photovoltaic research at Caltech, Stanford and Harvard. I have written about a previous talk at PARC by Dr. Kumar in October 2007. He compares and contrasts various energy sources with a very analytical approach and presents a great overview of the global energy picture.

The talk was sold out and the enthusiastic audience posed several interesting questions. Since the data presented was very similar to the talk in October, I will not repeat it here. You can see my previous post in October, if there is interest. However, the questions the audience and Dr. Kumar himself posed and answered are interesting. Dr. Kumar feels that oil prices will continue to trend up in the future with some fluctuations as in the past decades. This is an interesting question in itself and I will look at it more closely in a future post, since much of the future of alternative energy sources may depend on the answer.

Dr. Kumar expects energy usage to double worldwide in 30 to 50 years from 15TW (Terawatts) to about 30TW. With fossil fuels as a primary source, cost goes up and carbon emissions increase with several complications. Solar energy provides a very viable way to address the whole energy issue, but several issues such as cost, storage and inverters have to be addressed with technological advances. The ultimate solution may be a combination of solar, hydro, wind and nuclear (fission and fusion). But, the effort required is bigger than the Manhattan or Apollo projects to effect serious change. Opportunities exist in solar in several areas - silicon supply or other materials, new types of cells, thin films, storage, catalysts for hydrogen evolution, inverters and electric vehicles.

Dr. Kumar sees plenty of employment opportunities in the Valley and beyond with the push for alternative energy, for both fresh graduates and experienced professionals.

But the Mercury News presents a dissenting view from the Director of the UC Energy Institute and UC Berkeley business professor, Severin Borenstein. Professor Borenstein is quoted as saying that we are throwing away money by installing current solar PV technology, especially on houses. He argues against Government subsidies and California's million solar roofs programs. As was to be expected, he met with a barrage of criticism from the solar industry :-) The post makes for interesting reading. But, the professor is not fazed and defends his views. You can find Professor Borenstein's bio here and his publications including the incendiary one noted above, "The Market Value and Cost of Solar Photovoltaic Electricity Production" here. Good to note Prof. Borenstein's MIT connections :-) (Thanks to Ed Gunther for suggesting I provide a link to the paper referred to ).

Regardless of the scientific or economic correctness of Professor Borenstein's views, I think the industry will be well served by all the activity and attention paid to alternative energy. Silicon Valley has always been characterized by risk and reward. Without the promise of reward, there would be very little risk taking. Just funding University or academic research in the hope of a scientific breakthrough eventually may make economic sense from one point of view, but, if you look at technology development in Silicon Valley, the industry and risk taking have pushed the edge much faster than traditional methods.

Madan

Super Tuesday in Silicon Valley

noreply@blogger.com (Madan) — Wed, 06 Feb 2008 03:01:00 +0000

You can feel the excitement in the air. It was a crisp, cool and sunny day, and the excitement was palpable. Primary day is really big this time around. My son, who turned 18 last year, called home from UC Davis to find out our election views. It is a big day for him and many of his classmates who are voting for the first time. Though the Clintons visited UC Davis recently, the youth vote seems to be leaning in Obama's direction. Needless to say, California will have a big impact on the primary outcome. Its good to see the youth taking a serious interest in politics and the country's direction.

Regardless of who wins in the Democratic or Republican primary the outlook for technology support in the new White House seems to be strong. Who knows, we may see a resurgence of a technology boom in Web 2.0+ or clean technology. There seems to be strong support in both parties to re-energize the country by pushing for clean technology growth.

Speaking of Web 2.0, I have been getting a lot of questions recently on whether to NotchUp or not. NotchUp, of course, is the latest social networking/career development website which enables you to earn money to interview with companies. What's more, someone who refers you to NotchUp earns money on your earnings. Sound familiar ?

I have received several invitations to join the site and even more questions about whether one should join the site. The early reviews have been mixed. Here is a positive take on it, which is outnumbered by the negative takes on it. BusinessWeek has an even handed column on it. They note the spat brewing between LinkedIn and Notchup after NotchUp enabled quick connect to LinkedIn connections. However that turns out, NotchUp has attracted a lot of attention to itself very quickly and that in turn, attracts VCs and money. They seem to be using the tried and tested adage that there is no such thing as bad publicity :-) Life at a Silicon Valley startup is never dull :-)

Of course, the biggest news in Silicon Valley in the last week is the Microsoft bid for Yahoo last Friday and its impact on Google. Google stock took a dive on Friday, but is trending back up. The Mercury News has extensive coverage on the bid and one theory definitely seems to be that Microsoft wants more of a piece of the Valley action. Of course, they have had a relatively small Valley presence for a long time and have made some acquisitions over time, but this is a big one by any standards.

Much as we might want to think that its all about Valley technology and people :-), this appears motivated purely by ad dollars and Google competition, as Google probably realizes. There are interesting rumors that Google may counterbid or form an alliance with Yahoo and that Microsoft may raise the bid. We'll see how those turn out. The semiconductor industry took a while to get into a major acquisition and consolidation mode. The Internet business is relatively recent, if we take Netscape as the starting point in 1994. Perhaps, this is a sign that the rate of change of technology growth is accelerating.

Madan

Green versus Clean

noreply@blogger.com (Madan) — Sat, 26 Jan 2008 02:56:00 +0000

You might think this is about the semantics of green tech versus clean tech. That is an interesting question in itself, but this is about a neighborly spat between two Sunnyvale residents and Santa Clara County and state laws and redwood trees and solar panels. Sometimes truth is stranger than fiction. See here for the Mercury News story. Its complete with a Google Earth map :-) A Sunnyvale couple has been found in violation of the California Solar Shade Control Act ( I bet you did not know that it existed), a law signed signed in 1978 by Gov. Jerry Brown. See, the solar movement in California has a long history :-)

The problem - eight Redwood trees in the Sunnyvale couples' home cast a shadow on their neighbor's 10kW solar panel system. So, the Santa Calara County and courts are asking them to cut down their trees or face hefty fines. The spat has been going on for a few years and has already cost the tree owning couple a fair amount in legal expenses. In any case, its a very interesting dilemma - would you cut down trees to save the environment with solar panels ? Its almost a philosophical question, let alone a purely economic and environmental one. The Mercury News ran a Web Vote on this question and today's (Jan. 27th) newspaper shows that 144 people thought the tree owners should trim the trees and 372 people thought they should not. Probably not a scientifically valid poll, but still, an interesting result.

Madan

Green Tech for the Consumer Market

noreply@blogger.com (Madan) — Thu, 24 Jan 2008 02:55:00 +0000

If you were looking to find out how hot clean technology is in Silicon Valley these days, you only had to attend the Green Tech for the Consumer Market panel session hosted by the MIT/Stanford Venture Lab at Stanford's Bishop auditorium on Tuesday, January 22nd. As a volunteer for the event, I got to attend for free and it was well worth it :-) The Bishop auditorium was filled to its capacity of 324 with people standing in the aisles. VLAB events usually attract a good crowd, but this was exceptional. Of course, there was the usual gang of Stanford MBA students, but there were also a lot of VCs, investment bankers, lawyers and, of course, entrepreneurs.

The panel was moderated by John Rockwell of DFJ Element (Draper Fisher's clean tech investment arm) and included two VCs - Steve Westly of the Westly Group and John Denniston of Kleiner Perkins Caulfield and Byers and three Clean Tech entrepreneurs - Ron Gonen, CEO of RecycleBank, Michael Murray, CEO of Lucid Design Group and Frank Paniagua, CEO of Green Plug. Each of the entrepreneurs gave a brief introduction of their companies and product ideas and then the moderator posed a set of questions to the VCs on clean tech investments.

Ron Gonen talked about how RecycleBank works with cities to help increase their recycling rate and share the savings with the company. They have deployed pilots in Vermont and other East Coast cities, where they partner with a city and offer homeowners incentive points to increase their recycling. The recycling bins are outfitted with RecycleBank chips which calculate the weight of recycled material and award points to the homeowners which they can use to buy goods and services on the Internet. Sort of like airline miles, but based on the weight of material they recycle. This increases recycling in the city and saves the city landfill and other garbage costs. RecycleBank takes half the savings the city gains in this manner and also makes money off the advertising for the products sold off their awarded points. They have investment from partners like Coca Cola. You can view their demo here. In India, there were (still are?) people who used to come by your house to collect your old newspapers, bottles etc and sell these to shopkeepers and others for reuse. This is a fancier, scaled up American version of the idea with virtually no competition today and from the looks of it, destined to be a very successful company.

Michael Murray, CEO, presented for the Lucid Design Group. They make a Building Dashboard, which is an internet based application which monitors real time energy usage in a building. The idea is that if you are aware of how much energy is being used at various times in different areas of a building you will look for ways to reduce the usage. The implementation is rather impressive. There are various real time demos on their website which show off the capabilities of their software at various installations. The demo he showed of a dorm at Emory University was impressive in the range of options it had. I could not find it on the projects page, though. I am not surprised that Lucid Design Group won the CCTO's Smart Power Award this year.

Frank Paniagua, CEO of Green Plug described how his company is solving energy and material waste in consumer electronics products and other battery powered equipment by enabling an intelligent universal power supply. Today the DC power supplies for cell phones, laptops, iPods and a variety of devices are all different, and as a result a single family has a host of different power supplies. This is inconvenient for most people, not to mention redundant and expensive. Further, when these are discarded they generate toxic waste. Green Plug's intelligent power supply concept communicates with the devices which use DC power and supply only the exact power required. They also prevent overcharging and supplying power when not needed. Green Plug defines a digital protocol which makes realtime communication possible between devices and their power supply. It is implemented on a programmable microcontroller, but its also embeddable. They also license their Green Talk protocol and universal connector free of charge. A cool idea, but a tremendous challenge to implement since they have to not only support a wide range in AC voltage on the input side, but also a wide range of DC current and voltage on the output side. They also have to get a wide range of manufacturers and their devices to incorporate Green Plug technology in their power supplies. But, Frank Paniagua has solved a similar challenge before as co-founder of the Video Electronics Standards Association (VESA) which produces display standards to enable a wide range of devices to connect to displays worldwide. As a former Board member of VESA, I know how valuable that organization is today.

Following the excellent startup presentations, the moderator and audience posed a series of questions to the VCs on the panel. Steve Westly and John Denniston felt that the US was far behind Western Europe in adopting clean technology and alternative energy. They felt that Government subsidies were absolutely necessary to boost the emerging industry. They also felt that removing subsidies for fossil fuels and transferring them to alternative energy technology was a viable option.

They discussed what the VCs were looking for in funding companies. VCs are motivated by return on investment and looking at the companies which presented at this event, they noted how each one of them offered a unique advantage in waste reduction, energy awareness or convenience, but also strove to do it profitably. Different VCs have differing strategies for investment ranging from early stage and higher risk to later stage and lower risk. However, they agreed that most VCs today have a strong emphasis on clean technology investments. I could almost hear a room full of entrepreneurs whipping out their business plans :-)

Steve Westly commented that the opportunities in clean technology were just beginning and we are at a point of time similar to 1996 when the Internet boom had just started. Probably because of Steve Westly's political connections (he ran for Governor of California against Arnold Schwarzenegger) the questions and discussion centered on the political aspects of support for clean technology. In general, the panelists seemed to agree that regardless of who won the US Presidential election this year there would be more support for clean technology in the coming years. They also believe that in addition to new consumer devices using clean technology, many existing consumer devices will become more energy efficient and use cleaner methods of packaging and disribution.

Overall a most excellent panel and event.

Madan

The changing face of Silicon Valley

noreply@blogger.com (Madan) — Sat, 19 Jan 2008 23:32:00 +0000

Intel announced closing of their last Silicon Valley fab this year. It is as fitting a marker as any for Silicon Valley's transformation, from a focus on silicon to a focus on all emerging technologies. This has been in the making since the late nineties, actually, when the Valley focus shifted from hardware to the Internet and its applications.

Perhaps, the birth of Internet giants like Yahoo, Google, Ebay, Amazon and others, in Silicon Valley gave us an indication of things to come. The Valley has kept up a hectic pace of technology advances in the last fifty years, and though the early days were clearly silicon chip dominated, it has never really been about silicon only. Where other areas like Michigan focused on automobiles and stayed with that focus, the Valley is relentless in its pursuit of change. Intel spokesman, Chuck Mulloy, is right - Silicon Valley is less about silicon and more about technology development.

The latest indication of yet more change headed our way is in the rise of clean tech investments by Silicon Valley VCs to over a $1B/year. Silicon Valley had $1.05B in 43 clean tech investments in 2007 compared to a total of $1.79B for all of California and $3.95B for all of North America. In this case, though the VCs reside here and many of the firms are based in Silicon Valley, not all the money stays in the Valley. But, the numbers clearly show that this is the place where much of the action originates. Though some of the investors worry about a bubble, they are resigned to the fact that they cannot do much to stop it. All they can do is to make sure they make the right bets and come out ahead.

The Valley does not just embrace change, it pursues change, and that is probably the biggest difference between Silicon Valley and the rest of the world.

Madan

Solar Energy thrives in the shade ?

noreply@blogger.com (Madan) — Thu, 17 Jan 2008 03:30:00 +0000

That's essentially the hypothesis which Jim Jubak makes on MSN money. His column posted yesterday makes the case that US energy policy largely ignores solar energy, and that in turn will boost prospects for solar energy and for investors in solar energy companies ! Intrigued ? - I certainly was. I really enjoy reading Jubak's column. He translates complex economic theories into simple language and his stock picks aren't bad either :-)

In any case, the argument he makes is as follows. Today, solar energy is silicon wafer supply constrained. Worldwide solar power production climbed only 13% in 2007 compared to 57% in 2004 and 35% in 2006. Much of the demand today is driven by countries such as Spain, Portugal, Germany and others which offer subsidies. If the US too had offered subsidies, the excess demand would have pushed the price of solar power up even more. Hence the solar energy industry is better off now without US subsidies :-)

He further notes that the silicon shortage has had the effect of bringing many more companies into the solar panel business and has driven existing companies to expand their production. This in turn will increase silicon production 40 to 50% in 2008 and 2009. Solar cell efficiencies are also expected to increase. Maybe pure silicon alternatives from the likes of Nanosolar and others will also hit the market in this time frame ?

If the price of energy from fossil fuels continues to rise, they will soon reach parity with solar power and that would touch off a real boom in solar energy. This is projected to be in the 2012-2013 time frame. A most excellent theory from the perspective of all the solar energy companies and solar investors :-)

However, I am not sure that the assumption that the price of energy from conventional sources will continue to rise monotonically is a given. This is the only problem I see with the theory, though. This may somewhat affect the equation and timeframe, but overall its still good news for solar, unless oil prices drop dramatically.

Jubak goes on to pick some solar stocks which will benefit from this trend and interestingly they are all non-Silicon Valley companies. However, I will venture a guess that there will be a few companies from the Valley to pick from soon, given the attention the Silicon Valley technology industry and VCs are paying to alternative energy. :-)

Madan

Virtual CES

noreply@blogger.com (Madan) — Wed, 16 Jan 2008 03:16:00 +0000

As I mentioned in a previous post, I decided not travel to CES this year and so I had to be content with reading about it. As always, there was plenty of coverage like Dean Takahashi's collection of CES favorites.

But, the one thing I would have liked to have attended this year, was Bill Gates' farewell keynote. He has been part of the technology scene for so long and of CES since 1994, that it won't be quite the same without him. He is really a technology visionary and has made some pretty good technology forecasts, but there have been some misses too as the Mercury News pointed out last week. I have listened to him speak at WinHEC and other events too and he usually has something original to say.

He predicted the PC-TV convergence a little too early and attempted to make a Microsoft a part of the living room several times over the last decade and did not quite have the same success as Apple has had recently. You could probably say that Steve Jobs and Apple timed that one a little better. The Valley won that one. Way to go Cupertino! :-)

Its amazing that this rivalry has lasted well over two decades, covered multiple devices and technologies and that the whole world has benefited from the results, though not everyone would agree that the influence has been all positive. Certainly, Bill Gates leaves at the top of his game. Even the die hard Mac fans at 9to5mac.com are fascinated by him and have posted his farewell video at CES. In recent years he has been prone to show these videos mocking himself at his keynotes. This final one from this year's CES is indeed pretty funny. Whether you like him or not, he did change the technology industry and I am sure he will do the same in whatever he attempts next.

Madan

Akeena Solar starts the year right

noreply@blogger.com (Madan) — Fri, 04 Jan 2008 02:04:00 +0000

Akeena Solar is on a tear. They certainly started the New Year right. The stock is up from about $8 to $13.60 at today's close in just three days. The volume today was an astounding 22M+ compared to an average volume of 650K. You may wonder why this dramatic rise, especially when the stock market's been taking a beating all this week. Perhaps the story behind this press release is one of the reasons. Akeena Solar announced that their Andalay solar panel technology will be distributed in Europe, Japan and Australia by Suntech Power Holdings Co.

The New Year's hardly getting started and already my prediction #1 from Jan 1st is getting some wind beneath its wings :-) I have to believe that there is plenty more to come this year. Its going to be a good year for Silicon Valley :-)

Madan

Looking forward to 2008

noreply@blogger.com (Madan) — Wed, 02 Jan 2008 00:41:00 +0000

Its that time of the year again, a time for new beginnings and the promise of excitement to be. There are plenty of people willing to make predictions about the year to come. In Silicon Valley it always helps when the VCs see good in the year ahead and that seems to be what the Mercury News says. Speaking of the Mercury News, Dean Takahashi quotes Mark Anderson for these predictions for 2008. Then there are Dean's own predictions for Tech Trends for 2008. The Inquirer, of course, has a spicier set of predictions, and as they pithily put it, some of them may even come true. :-)

In any case, I'll go out on a limb and make some of my own predictions :-)

1) 2008 will see Silicon Valley driving clean tech to new heights. Now, this is not so difficult to predict, because there is plenty written about it already, like this recent article. There may even be some more Clean Tech IPOs from the valley. One which would be particularly exciting would be NanoSolar, if it happens. This in turn will drive more VC activity in the space.

2) In the mobile world, we'll see more GPS applications in the cell phone, maybe even in the next gen iPhone. This has been a while in the making and maybe 2008 is the year.

3) Facebook and LinkedIn will both have a big "exit" in VC terms with either a big acquisition or IPO.

I'll limit my predictions to these three for now and measure my accuracy at the end of the year. :-) There will be plenty of other exciting happenings in technology in Silicon Valley and the rest of the world. Yes, there is indeed much to look forward to.

Happy New Year !

Madan

Looking back

noreply@blogger.com (Madan) — Sat, 29 Dec 2007 23:15:00 +0000

We are at the end of 2007 and about to ring in 2008. Its interesting to reflect on what was most significant about 2007. I was at CES in January 2007 and the buzz about the Apple iPhone was rising to a crescendo. Apple had little to no presence at CES in 2007 and instead chose to deliver their message from MacWorld in San Francisco. For me, it was amusing that the most significant technology product was launched right here in Cupertino, while I chose to travel to Las Vegas to see what was hot at CES :-). I have decided that this year I will not head to CES in case I miss something as significant in the Valley. :-) Its interesting to compare some predictions on wireless, at the beginning of the year, from some leading VCs, to what happened in reality. As one of the panelists pointed out then, "VCs are often wrong, but never in doubt" :-)

In any case, it turned out to be a very significant year for Apple. Apple stock is on a tear and the impact of the iPhone will be felt for years to come. The Mercury News rightly says that they have transformed the mobile phone industry. The next few years will see Apple setting the pace and the rest of the industry trying to catch up, much as they did with the iPod.

In April, I wrote about location based services and their promise. I was disappointed they did not take off in a big way in 2007. I think that this will be corrected in 2008, perhaps again with Apple leading the way ?

The other big technology trend in 2007 was the push behind Clean Tech, and Solar energy in particular. As we got close to the end the year, we saw NanoSolar announce production shipments and Ausra announce a contract with PG&E. I am sure this is just the beginning of an explosion of activity in clean tech in the years to come, with the Valley driving innovation again.

In a few days, I will share some of my predictions for technology trends in 2008. Till then, happy holidays and a great New Year to everyone.

Madan

A Great Day for Clean Tech in the Valley

noreply@blogger.com (Madan) — Tue, 18 Dec 2007 21:35:00 +0000

Today was a great day for Clean Tech. NanoSolar announced that they are shipping their first commercial panels for field deployment at Luckenwalde in Eastern Germany. Of course, Gunther Portfolio had tipped us off about this in their post on December 10th. As the CEO, Dr. Martin Roscheisen, discusses in his blog they are expecting to enable 99c/Watt panels. It is interesting that they have donated one of the first three panels to the Tech Museum in San Jose. I am sure the NanoSolar IPO, when it happens, will be one of the best the Valley has seen.:-)

The other interesting news, which did not quite get as much coverage, was that PG&E had agreed to buy 2MW of power from wave energy from a Canadian company, Finavera Renewables. Wave energy has always been a promising and challenging source. As the data I presented from Dr. Amit Kumar's talk in October showed, the theoretical potential for geothermal and ocean power is 70 TW, but feasible capacity is expected to be on the order of 2TW and significant technical challenges remain. Good to see that PG&E is driving the leading edge of wave energy. Clearly compared to the practical possibility of 1200 TW from solar (again from Dr. Kumar's data), this is small, but we may need all the sources we can get, if we are to stem impending doom in the form of catastrophic climate change. :-)

Lest you think I exaggerate, listen to what NASA scientists had to say yesterday in San Francisco (video clip from ABC News). The report says that by 2012-2013 the Arctic will be ice free at the end of summers. This was not expected to happen till 2040, previously. Let us hope that alternative energy is still in time to save the planet.

Madan

Social Lending

noreply@blogger.com (Madan) — Tue, 11 Dec 2007 01:48:00 +0000

In villages in India you used to have local moneylenders who were almost part of the family. They gave you money in times of need. Sometimes, they took jewellery or something else as security, but mostly they loaned you money because they knew you. Of course, it was at a profit, sometimes a huge one. Interest rates could be well over 200% :-) But, at least, you got the money when you needed it. This practice has reduced somewhat in recent years with modern day banking facilities available in most places, but I would not be surprised if it is still very common in places. That's what comes to my mind when I hear social lending. :-)

So, when I got an invitation to a Social Lending panel organized by the MIT Club of Northern California on December 5th, I was intrigued. I was curious to see how Web 2.0 had changed this age old practice :-) The panel was hosted at Wilson Sonsini Goodrich & Rosati in Palo Alto and moderated by Eric Nee, Editor of the Stanford Social Innovation Review. The panelists included John Witchel, CTO of Prosper, Patrick Gannon, SVP of Lending Club and Harvey Grasty, Head of Business Development of MicroPlace, a division of Ebay. Prosper and Lending Club have been funded by Valley VCs to the tune of $40M and $10M respectively and MicroPlace has access to a lot more funding, potentially, as part of Ebay. Prosper is the oldest of the three, having been around since early 2006, while MicroPlace launched their website in October 2007.

The concept is simple - peer to peer lending. Anyone can be a lender or a borrower. All you need is to be able to surf the web and create an account at one of the sites. The three companies have somewhat different approaches to the process, though. In all three cases, you can lend small amounts of money, as low as $25, for short periods of time, and you can choose who you will lend to. They charge a service fee of 1% in all cases. Microplace has altruistic goals of eliminating global poverty, while Prosper and Lending Club are focused more on borrowers in the United States. Microplace partners with third parties like the Calvert Foundation and others to make low interest (2-3%) loans in other countries, especially underdeveloped countries. You cannot make loans to individuals in other countries directly.

Prosper has over 500,000 registered users and $100M in loans so far, $40M in VC funding and 45 employees. They claim transparency of the process as their biggest advantage. The borrowers submit detailed information on their background and requirements and the lenders can choose who they want to lend to based on risk and return. Prosper has an automated lending process which either party can customize based on their preference. Risk is assessed based on Experian Scorex credit scores and other criteria. The borrower needs to provide a fair amount of personal info for lenders to assess, though not as much as typical banks require. The minimum credit score is 520.

Lending Club started as a peer to peer lending service for college alumni on Facebook and received $10.26 M in VC financing in August 2007. They have $3.25M in loans so far with $25M turned down. The average rate of return is 12.25% and minimum is 6.78%. The average FICO score is 692. Their users range from students to 70 or 80 year olds. The lending process is automated like Prosper. They view themselves as combining responsible credit with social networking.

All three companies claim that their process is far simpler than borrowing money from a bank, there is more transparency, a higher rate of return and the flexibility to loan money to people or causes you find interesting. They claim their default rates are low and that they assist in helping fight fraud and securing privacy. However, they have all been around a lot less than most banks, are less capitalized and are a lot smaller in people terms than the smallest of banks. If the security and privacy issues do not limit them and they grow to service a large volume of loans they have the potential to be profitable and change the banking paradigm. If, for example, you can borrow money at 7-10% to pay off $20000 in credit card bills, it looks like a win-win situation for the borrower and lender, by cutting out the middleman. As John Witchel of Prosper stated, they have many more product ideas like 5 year loans and others for the future. If they are successful in banking, there are other areas such as insurance where consumers have even less choice, which look to be possible growth areas.

I must say that these companies are fine examples of the innovative thinking that is the hallmark of Silicon Valley and the Bay Area. Whether they are successful over the longer term remains to be seen. But, the world is a better place for the attempt and surely will bring some competition to an industry which has not changed in ages, and the average consumer will benefit from it. Certainly, if the villagers in India have access to the Internet and to websites like Microplace, they will get a better deal than they could from the local moneylender, or even the local bank :-)

Madan

Super Solar panel ?

noreply@blogger.com (Madan) — Sat, 08 Dec 2007 20:39:00 +0000

The Inquirer has an interesting story about a South Carolina company which claims to have developed a solar panel which is 15 times more efficient than current solar panels. The company, FreEnergy LLC, claims to do this by using the entire spectrum of light from the sun, rather than a fraction as conventional solar cells do. The other interesting thing about the company is that one of the founders moved from California to South Carolina to start the company. :-) Rather the opposite of the usual clean tech startup trend :-) You can read more about the company on charleston.net . Is this a fundamental breakthrough or another cold fusion like story. ? Time will tell. The Inquirer, as usual, comes up with the most interesting stories, even if they don't all turn out to be true :-)

Madan

The Wireless Wars

noreply@blogger.com (Madan) — Sat, 01 Dec 2007 18:56:00 +0000

If you did not know it already, there is a battle brewing for the wireless spectrum. As the Mercury News reports, the 700 MHz spectrum which is currently being used for UHF TV, is being auctioned off to the highest bidder. What prompts the auction is the federal mandate which forces the TV broadcasters to go digital from 2009 (see this Benton Foundation link for an excellent review of the timeline.)

The bidders for the spectrum include the usual suspects like AT&T and Verizon and some new players like Google and Frontline Wireless, a startup funded by stellar Valley VC's ! So, why such a diversity in the bidding ? - because the stakes are big ! It has a lot to do with Net neutrality and control of the Internet. For example, see this perspective from the man who has some claim to having invented the Web, Tim Berners-Lee. :-) See, not quite who you thought it was :-).

Its all about control of information, and in an information age that equates to a lot of power. The Mercury News column talks about interesting angles to the bidding, such as Google bidding, but not to win. Interestingly, it all ties back to the mobile phone operating systems and Android, which I wrote about earlier in the week. This auction also appears to be the last of the spectrum auctions for useful spectrum. The deadline for bids is this Monday and the results will be announced early next year according to the Mercury News. I can't wait to see who wins this one. It could change the power structure in wireless communication. I will make a prediction - the bid will be a lot more than the $4.6B minimum that the FCC expects for the spectrum.

Madan

Clean Tech VC funding skyrockets

noreply@blogger.com (Madan) — Fri, 30 Nov 2007 04:09:00 +0000

The Mercury News reports that the first three quarters of 2007 saw $2.6B in clean tech funding in 168 deals. This compares to $1.8B in 2006 and $235 million in 2003. As I discussed in my post in January 2007, clean tech funding accounted for about 9% of VC funding till late last year. It will be interesting to see what fraction it is going to be this year. The interesting comparison was with funding for software, biotechnology and biomedical devices. With the highest rate of growth for clean tech funding, we could see clean tech being the largest sector for VC funding in 2008 ! That would be massive change in just 5 years. Whether this will be in time to reverse global warming remains to be seen, but its a good start :-)

One big difference I see between clean tech funding and funding for the other areas is that the size of the deals is very large. However, one deal listed for $500M to Delta Hydrocarbon, a Dutch company, to enhance oil field production did not seem to me to be particularly clean tech. But, maybe there is a clean tech angle to it :-). If at least some of the clean tech funding sticks in the Valley, it certainly will drive the level of activity up.

On Tuesday, Google made a splash with their announcement targeting 1 GW of renewable energy at prices cheaper than coal. This is an ambitious target and they are willing to spend millions chasing it. Though there are differing views of it, I for one, hope they make it. They have the deep pockets to try and if they achieve the target it will make a significant difference. To understand how difficult this is, read my post from last month where I quote Dr. Amit Kumar's data which shows coal at 5c/kWh compared to the cost of other renewable energy sources.

Madan

Mobile Phone Operating Systems - Open or Closed ? - Part II

noreply@blogger.com (Madan) — Fri, 30 Nov 2007 03:00:00 +0000

On Tuesday, I wrote briefly about the mobile phone panel I attended at PARC. Here are some highlights of the discussion. Andy Seybold put up a slide showing the market share for the various OSs currently. Though the space seems fragmented, Symbian does control the majority of installed mobile phone OSs with over 165M installed. ( I still have my Diamond Mako clamshell from SONICblue with the Psion OS from Symbian. :-) It was pretty cool then, but way ahead of its time. ) With over a billion phones shipping per year this is a very respectable market share. (In comparison about 200M PCs ship per year. ) Microsoft shipped over 11M mobile phone OSs in 2006 and expects to ship 20M this year. Monta Vista was one of the lesser known names on the panel, but they control over 95% of Linux OSs on mobile phones. It was interesting that they said that they are supported by many OEMs just because they are not Microsoft. :-) Google also seems to be hoping for this "not Microsoft" effect to help them. :-) Of course, they are also giving away Android with much of its open stack and hoping many developers will write to this platform. Their goal, of course, is to have a much larger playing field for advertising revenue. Rich Miner of Google commented that lots of information was accessible from the cell phone and it tied in nicely with their goal of organizing and making information accessible. In any case, with over 2.5 billion cell phones in use worldwide and growing, the market size is about 3X the number of TVs worldwide, and the opportunity is large by any reckoning.

The first question the panel considered was - why the push for an OS on mobile phones now ? The consensus seemed to be that phones have grown to become mini-PCs with many applications and power management requirements and lots of peripheral functionality, larger screens and other capabilities. With this level of sophistication and the constrained power requirements a targeted OS was required. There was some discussion on what was really open or closed. Microsoft claimed that since there were 100,000 people downloading their SDK and about 18000 apps built on their platform, they could be considered an open platform. One of the panelists pointed out that the baseband functionality in Google's Android was not open sourced for security and other reasons. Symbian pointed out that FCC regulations governing usability prevented some of the control code being open sourced. There was no closure on this discussion.

The panel talked about having the full browser or Outlook on a mobile phone and seemed to agree that it was about context and not about having the full functionality. Alan Brenner, SVP of Blackberry platforms for RIM commented that data usage was less than 10% on mobile phones today and as the usage climbed more applications would be enabled. Rich Miner's (Google) view was that today's smart phone was tomorrow's feature phone.

There was heated debate among the panelists on the cost of the mobile phone OS. One view was that it was insignificant with relation to the overall cost of the device. Rich Miner of Google pointed out that some phones which are available to service provider customers for $100 typically cost about $50 and Microsoft was charging between $10-$12 for the operating system with the Opera browser, which was not insignificant. Microsoft's Gerardo Dada responded that Microsoft provided value for the cost and that they spent significantly on R&D compared to the rest of the industry. Microsoft did acknowledge that the trend of giving away software and generating revenue from service was something that they see and have ways of addressing. Symbian's VP of US Operations, Jerry Panagrossi pointed out that free code was not necessarily good, especially if it was poorly tested. Alan Brenner quotes the CEO of Verizon saying that the return rate on open devices was over 40%, while the return rate on Blackberries was only 3%. In all, a fairly lively debate :-)

The panel deplored the lack of control of the features and settings on mobile phones today and attributed it to control of the ecosystem by the carriers and mobile phone OEMs. This was expected to reduce over time. Alan Brenner mentioned the availability of the Blackberry Unite(?) next month which would allow changing settings. Nokia's Victor Brilon mentioned that you can do this on some Nokia smart phones today by downloading software and using a USB connection. He pointed out that some of the difficulty with opening up the settings was the cost of the ensuing support requirements.

The panel seemed to agree that much of the increase of rate of growth in mobile phones would come in emerging markets in Asia and Africa with data services growing in India, China and Africa. Today with 250M phones in the US, the market was 80% penetrated. However, Andy Seybold said that could go to 300% with users having multiple devices. This is certainly true of many people I know. Though, there is the possibility of integration as with the iPhone. People certainly do not like carrying more devices than they have to.

The panel discussed the opportunity for application developers. Most of the panelist companies have active developer programs. However, Rich Miner of Google pointed out the lack of return for many application developers for mobile phones. Very few companies which were funded to do mobile phone apps generated successful exits. Part of the reason for this was the considerable fragmentation in the market and lack of opportunities for sales to end customers. (However, ring tones did generate significant revenue for some people, mostly in Asia. ) Google is giving away $10M to applications developers to write apps for Android, though ! I am sure there will be some interest in that :-)

In any case, a very interesting panel which made it clear that all the major software players were going to give of their best to control a large fragmented market.

Madan

Mobile Phone Operating Systems - Open or Closed ? - Part I

noreply@blogger.com (Madan) — Wed, 28 Nov 2007 06:50:00 +0000

Today I attended a great panel session at PARC hosted by the Wireless Communication Alliance (WCA). I have been going to WCA events for many years, especially when they were closer to home at HP in Cupertino. This was clearly one of the best WCA meetings I have attended. The PARC Pake auditorium was almost packed to capacity. Andy Seybold was the moderator and the panel consisted of the top players in mobile operating systems - Symbian, Microsoft, Monta Vista, Nokia, Research in Motion (RIM) and the latest entrant, Google. RIM and Symbian were represented at the VP level ! For a complete list of the panelists, check the WCA link above.

It was a very lively panel, as was to be expected with some strong competitors in close proximity and Andy as a moderator. I was on a panel he moderated a few years back at UC Berkeley and there clearly was no lack of strong opinions :-) The Valley mobile phone company conspicuous by their absence was Apple. That was a pity, but they rarely show up for events except their own. Though, you could almost sense the industry responding to the challenge of the iPhone. Nokia explicitly mentioned that they had been beefing up their presence in the Valley. So, the Mercury News column on Sunday was close to the mark. The Valley is seen as a center of innovation and every major player wants a piece of the action. The panel discussion did touch upon this as well as the impact of emerging markets and globalization.

There were a range of interesting topics covered during the session and I want to mention the highlights, at least. However, I will save this for my next post later in the week. Stay tuned.

Madan

Silicon Valley and Globalization

noreply@blogger.com (Madan) — Mon, 26 Nov 2007 01:46:00 +0000

Today's Mercury News has front page coverage on Silicon Valley's gains from globalization. The article discusses the gains for Cisco, HP and other major multinationals based in Silicon Valley from global growth. The article also discusses the return of VC money flow to the Valley and points out that the valley is at the crossroads of venture capital with money flowing into the valley from all over the world and being invested worldwide.

There are some interesting statistics on the flow of venture capital to and from the rest of the world in the print edition. The charts don't show up in the link above for some reason. Perhaps, this is the most striking change from the '90s, when money flowed into the valley and stayed here. This led to the tech boom and the bust, of course. The Valley has recovered somewhat, but its far from the affluence of 2000. Perhaps, the return to glory for the valley will be in the form of the clean tech boom.

The Valley however, is still very attractive to the rest of the world. One other trend the Mercury News discusses is the ramping of the Valley presence of big tech companies like Nokia and Microsoft who seek to be closer to ideas, partners, investors and customers. As the column says, it appears the world is flat and Silicon Valley is at the center of it and the next wave appears to be clean technology. I will root for that.

Madan