Interview With A CEO

Introduction

The title is a takeoff on the Ann Rice novel and Tom Cruise movie “Interview with a Vampire”. Of course, most CEOs are not as scary as a vampire. Just to be on the safe side, I did the interview by phone. I did not want to ask a CEO the usual questions about the last quarter or guidance for the upcoming quarter or about the company's latest product release. I wanted to ask questions more about what it is like being a CEO. I was fortunate enough to get George Janac to cooperate in this experiment.

J. George Janac is the CEO and Founder of Silicon Navigator. A self professed serial entrepreneur, George also founded High Level Design Systems, Giga Scale IC and InTime Software. In addition he has been a director and investor in numerous EDA and chip startup companies.

George was founder, president and CEO of High Level Design Systems (HLDS), which was acquired by Cadence in 1996. He served as CTO of Deep Submicron Business Unit at Cadence Design Systems, post acquisition. George's chip design and EDA expertise dates back to SDA Systems, and Bell Laboratories in the early 1980's.



What is the role of a CEO?

My sort of strange definition is the person who at the end of the day is responsible for whatever happens to the company. It is his responsibility to fix it or make it right. The CEO has the P&L responsibility and the responsibility to make sure that the company succeeds. He is responsible to the investors and stakeholders in the company. At the operational level you are everything from the top cheerleader to the ultimate pessimist. You have to be optimistic but still make sure that everything that could go wrong doesn't go wrong.

You mentioned success. How do you define success?

At the end of the day people invest in startups looking for ROI. Success is building a product that leads to profitable company that returns money to its investors. Along with that the company produces something useful and is valued by its customers.

Role of the Board of Directors (BOD)?

They help you make decisions. One of the problems with these companies is that you have so many day to day activities going on that there are times when you need someone to say “You know, you really need to look at this way”. So really the Board of Directors oversees and helps people make the right decisions. The Board of Directors for many companies is very crucial. A lot of times especially with startups the boards are made up of investors who have different goals for the company. At the end of the day they are there to remind you of their goals and also help you to succeed. The corporate goal is to have investors that can help you with different areas. Someone an help with technology, someone with sales, one director with detailed execution and another with global vision. Having the right mix of directors is really important.

How is the strategic direction of a company set?

In many ways with a startup the strategic directions is really set at its inception. Assumptions about the strategic direction are constantly tested against market and development reality. The direction is really with the original business plan. It is very unlikely that a company will start off in one direction and be successful in a different direction. It may be successful along a 30° or 40° arc from its initial conception but very unlikely if it goes in a completely different direction. By the way, if you are waffling on the direction in which you are going, you have a problem.

Sources of Innovation?

They really come in a couple of categories. In EDA ideas come from individuals. This is an industry whose great ideas come from individual people. That is a huge source of new ideas that come up; individuals who think up a new idea and are willing too put it on the line to make it a reality. The other source of ideas is the customers. Customers have problems, customers have needs. Very often you can figure out from the way they are working on or trying to solve a problem something which is applicable industry wide. Interactions with customers may either lead you to a new idea or very much help you fine tune the idea you will be successful on..

Role of Standards in the EDA industry?

Standards are progressively becoming more important. EDA standards very rarely come from a bunch of people getting together and writing a standard. I would say that Might makes Right. He who basically goes out and gets a standard adopted by a large number of customers then can get it adopted as an industry standard. You can look at Verilog which is now IEEE blessed. A standard always requires someone to push it. I think that this is a critical aspect of any standard. We are working with OpenAccess. Part of what we see is necessary is not just that Cadence and us but a lot of people are pushing it. The standard stuff is just becoming more and more important. Otherwise everyone needs to build everything from scratch.

How to company's make versus buy decisions?

You have to be incredibly disciplined because it's so easy to have the engineers choose the make decision. When you have a standard what you are trading off is the development time to build the code you know versus no development time for the unknown, the code you have to learn. So it is always easy to find some little flaw that says we should develop it. The difficulty comes from realizing the time, the money it's going to cost you. If you are in a startup, someone might say that this will take a man-year to develop this versus buying it. And you go that's not too bad. But I am really paying 15 people so if I wait a year I am really wasting 15 man-years of expense. The key is to be realistic, pragmatic about the make decision. Look at the decision in the overall context of what you are trying to achieve. What kind of product and exit value.

Companies have only a certain amount of cash to get something done. It is really a question of how long it takes to establish a business. If you build everything, it will take a long time to get it right and build a business. There are some very good standards and people are suing them more and more.

There is some thought, some process, some algorithm that is the gem that makes a company unique. But 80% of the effort is not spent in building the algorithm but in building everything around it to make a product. That's the part where standards can help. If you can plug your algorithm into someone else's system, you have just saved yourself a pile of effort and time. You have made it better for the customers that can now use you along with somebody else.

Importance of Alliances?

Alliances are good things but in an alliance everyone has to gain or it doesn't work. They get published but don't lead to anything significant because there is not enough alignment, not enough gain for both parties. Align yourself with someone who has as much to gain from alignment as you do. It is very important for small companies to get alignment with the big companies because they have access to customers and support structure. On the other hand the little guy has a lot more to gain in the relation with the big guy. It is difficult to say that I'm going to be an island to myself, just something out there. You have to be able to interface and partner with people.

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