Inside the Tornado: The Transmeta Story (Part 3)

This is the third of a four-part post “Inside the Tornado”.  Read Part 1 and Part II first.  The previous posts cover the story, culture, and product.   Follow me on Twitter: @bxian3.  Thanks for reading.


What about the people?
Conventional wisdom tells us that A attracts A, B attracts B, and whose knows what C attracts.   It is obvious that everyone wants A players.   But, who are the right people for innovative ventures?   At Transmeta, we were able to create one of the most innovative products, when the right technology and the right people came together just at the right time.  The resulting product was an engineering marvel.  Before us, no one would have thought of the possibility to build a software-based microprocessor that completely redefined the boundary between hardware and software.    If we had only A-type conventional thinkers, would we have been able to innovate? Or, perhaps we would have simply built a faster horse based on the experience of these A-type horse builder.  (A reference to a quote from Henry Ford)  

The entrepreneurial team
The learning and discovery nature of startups is very different from established business.   It is this very mindset that would drive any VP of Sales or VP of Monetization crazy.  As we went through the transition phase to a medium-sized company, the challenge came when we had two very distinct types of people working in the same organization.   One set of people were very opportunistic (constant flow of new ideas) while the other demanded certainty.  It became even more visible when we brought in different CEOs from the outside.   We did hired the best CEO we could find.  All of them have great track record running successful businesses previously.   While all of them were very experienced, however, it is quite a different experience from the discovery process (see my previous blog post on characteristics).   One possibility is to have one of the entrepreneurial founding members running the company with support from an experienced executive, similar to Sheryl Sandberg and Marc Zurkerberg at Facebook.  In the case of Facebook, it is an obvious choice since social network is a nascent market.    In the case of microprocessor, it is less obvious and just more reassuring to get an experienced executive from another microprocessor company to run it.   What would you do?  Should we go after existing market or create a new market for software microprocessor?

Discovery vs execution
Once we had our first working product, the pressure for sales accelerates.    The focus shifts rapidly from discovery to execution.   Under this pressure, we had to go after known markets and known customers.   Guess what, majority of our customers  did ask for a faster horse.   The message was clear: “build a faster processor if we want design wins”.  Because of this, we decided on a dual strategy: Efficeon for performance and Solo for emerging markets.  The tremendous pressure for revenue would eventually forced us to stop the Solo program.   First, it was very difficult to focus on two distinct products with limited resources.  Second, it was difficult to see the revenue potential for Solo even though it would enable some innovative designs.  And, from the sales team perspective, they simply don’t want to hear about explorations.   Rightly so, they were there to execute, not to experiment.   While the experimental nature of founder types is needed to discover new markets, the executional nature of sales is needed to scale business.

What type of people do we need then?   It really depends on whether you are going after the horse market or the automobile market.   I think Steve Blank explains it the best in Four Steps to Epiphany and in his blog.  Check him out!

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