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I had lunch with a friend of mine last week - one of the best recruiters I know.  Obviously due to not many companies hiring, as effective as she is, she is not having an easy time getting paid for her services these days.  She was however bragging about a company that she’s still working with.  When I asked her how that company is doing, she responded saying “well, they had a great CES.”

I hear that all the time.  ”We had a great CES” … “We had a great DAC” … “We had a great SEMI” ….. And I always wonder what that really means.  To me it’s very comic because in none of these phrases the word “great” is defined, so no one is really wrong about the statement and it totally depends on their perspective and more importantly their (sometimes low) standards.

At the same time, I have heard a few VP’s of sales quoted saying “there are two types of leads: my contacts, and useless ones!”  I actually found that statement more ludicrous than the “we had a great CES” statement [No wonder sales guys get such a bad rap!].  This statement is merely an attempt by some sales VP’s to explain why they can’t start sales engagements with people they don’t already have a relationship with.  All a good sales guy needs to start an engagement is a phone number and phone.  Nevertheless, the industry is full of sales guys who constantly sell themselves based on their rolodex - and unfortunately the industry is also full of VC’s who buy that [stuff].

What everyone seems to miss is something that I have been using in my consulting practice.  There is a difference between “leads” and “touches”.  Most people who visit your stand at the trade shows are “touches”.  ”Leads” are those who 1) have understood your value proposition, and 2) would (at some point) fall in your target segment.  In consumer marketing, the difference between the two is rather small: value propositions are easier to understand, and based on demographics it’s relatively simple to know when and how to approach the lead.  In high tech marketing, the difference between the two is so large that it could cause startups to fail or larger companies to totally miss the market.

Unfortunately most marketing executives measure the success of a trade show by the number of “touches”.  Touches cannot be counted on as whether a target audience is grasping your value proposition and more importantly how it all translates into sales activity.  For the most part, the more gimmicky your stand is the more touches you’ll have.  Touches just represents how many people came to the stand (for whatever reason).  It could even include a lot of your competitors.

The real challenge is knowing shortly after a trade show who the leads were.  This requires knowing every touch’s profile, behavior, and experience.  If you knew someone who came to your stand was in the market for similar products, you’d immediately know that he or she is a lead.  This information is however not readily available till months after traditional trade shows.  So I personally believe the value of traditional trade shows gets diluted as more and more people (high quantity) attend them and as it becomes more and more difficult to know about the attendees (less quality).

What comes into picture is new technology.  With online communities and their trade shows, the profile, background, experience, (purchase) behavior of visitors is readily available.  These modern (online) trade shows also enable a wider reach, a 24/7 approach, and lower cost.  A good example of these online community and trade shows is Xuropa.  Xuropa has created a community of the individuals and companies in the electronic design ecosystem.  It also hosts many trade show style stands, suites, and labs for companies to offer a view into their technology - but the real difference is that companies can easily see who the visitors are and quickly qualify the right ones from a touch to a leads.

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“We had a great Xuropa” - people around the industry will soon be saying!

Posted under Xuropa, business, career, industry, marketing

The writing on the wall just keeps on getting writ larger.

It keeps feeling like deja vu every time I listen to Jim Hogan describe the status of the EDA industry and what needs to be done to move it forward.  He’s been saying it for years, and everyone needs to be listening very closely.

The full interview is here over at Ed Sperling’s blog, but here’s a summary. (The punchline is at the end.)

It was interesting to hear when Ed asked Jim what the missing technology pieces are within EDA.  Jim answered:

• System level knowledge (ie. the end markets)
• Software knowledge (ie. how to support scalable software design practices)
• Supply chain management

Notice something?  It’s not about technology!  For progress to be made within EDA, the emphasis needs to be on the business of electronic design and how systems are developed.

Incorporation of software development into EDA: 

Embedded RTOS and protocols are available, predictable and commodities; the challenge is at the application level and being able to predict behavior there.  The industry as a whole has little to no exposure at this level.

Does Jim see a merger of two worlds:

There are too few players that have worked both sides to make this feasible.  There needs to be greater interoperability and mutual sign-off between the development flows.

Acquisitions:

EDA buys a software company?  No.  Collaboration more likely.  IP company aggregation more likely within EDA; especially as it relates to distribution.

Are there bargains out there: 

The business rules have changed.  Asset purchases are more likely rather than out-and-out M&A (re. Beach IP acquisition).  In the past valuations were the stumbling block in Private-Private acquisitions.  But given the current environment this will become less of a hurdle.

The Value that EDA Provides:

The value is not in EDA as it is traditionally thought of at all.  For EDA companies to build value and move forward they need to take on more of what their customers currently do themselves.  ie. instead of just providing tools, EDA needs to become more of a “General Contractor”.

Here are some ways that EDA could move forward in the value chain, with some ideas that I’ve added in:

• License sub-systems and not just IP cores

There are examples of this, such as MIPS.  They have their platform strategy, but from what I’ve been able to tell, it hasn’t met with too much success.  As before, this likely has more to do with everything around the IP rather than the IP itself.

• Do more of the design for the customer…maybe the whole design

Jim talked about this a bit in the interview.  Some companies are doing this.

• Outsourced CAD

This builds upon the concept of SaaS and Cloud Computing that I’ve talked about in the past.  Essentially, if EDA companies take on directly the maintenance and provision of the CAD team by providing their technology through SaaS/Cloud Computing models they’d be adding value to the customer while removing some of their Capex and Opex outlays.  That should be a whole heck of a lot of value to capitalize upon.

• System Level design and development

This comes back to ESL, but it needs to be approached from the perspective of how systems are designed instead of how EDA tools are used and by whom.  Again, it’s not the technology, but the use model and business models.

In summary, for the business of EDA to grow it needs to focus on two things:

1. The business of EDA
2. The way systems are developed

Posted under business, industry, marketing

Ron Ploof writes a very interesting and informative blog about “social” or “new” media and it’s impact on business and industries.  It’s a very useful read.

The title of a recent post caught my eye.  Entitled “Norman Rockwell New Media“, he draws an analogy between new media adoption by corporations and different ways to organize towns.

Ron broke new media adoption into two camps - it’s either central and deeply intertwined with the business (Main Street Town), or it’s on the periphery and barely touches the core business (Norman Rockwell Town).

This doesn’t quite work for the adoption of new media within the electronic design industry however.  There are some industry leaders that have adopted new media wholeheartedly, and are looking to do more.  But on the whole the landscapes of these “towns” appear quite untouched by new media.  But this is changing.

Living in California, a different analogy came to mind.  By and large, it’s kind of like train stations here - if a station exists it’s on the outskirts of town, rarely used, and sadly out of date.  However, these companies have begun to see that the roads are crumbling and gas prices are too volatile to keep using the car cost effectively.  And so they’re looking to put in some new infrastructure and change their behaviors.

Specifically, their business processes are long and require a lot of complex interactions (demonstrations, training, and evaluations for example).  Now that the electronic design industry is truly global it is no longer cost-effective or efficient to carry out all of these interactions in person or even directly.

Many companies use point communication tools (webex, skype, etc.) to lower costs.  But this is not “new media” - ie. these tools cannot be leveraged when they’re not being used.  And this is what we need - leverage.

An online environment that is easy to manage and provides the tools, controls, and recognition mechanisms for engineers to see the value of your product and discuss it with their colleagues and friends.  That’s leverage.  It’s also a pretty neat description of Xuropa.

Click here to register for the Xuropa Online Electronic Design Community

Posted under Features, business, industry, marketing