Think Beyond the Possible, Then Work Your Way Back into Reality
The success story of ARM Holdings is as good as any there has ever been. Few would have guessed that the tech giant that designs semi-conductors and microchips used in 95% of the world’s mobile phones, started off in a barn in Cambridge, England. The credit for this success is due, in no small part, to the vision and leadership of their first CEO, Sir Robin Saxby. He set his sights on the top, which was to become the global standard processor in chip design, and despite the many challenges in his path, achieved this distinction. What was unique about ARM was the business model which involved the designing and licensing of IP rather than the manufacturing and selling of actual semiconductor chips. This, along with some other fundamental decisions by Saxby and his team, enabled a minnow like ARM to shake and dethrone Intel as the undisputed king of the processor space. What’s more, he did it all while being the Chief Executive of a joint venture between Acorn Computers, Apple Inc, and VLSI Technology, from day one of its formation in 1990.
In this rare, and in-depth interview, we delve into his motivation, thought process and the obstacles in his path that lead him to challenge the existing world order of the chip world, along with his advice for startups today.
I have always been interested in technology
I can remember when I was about three years old, we were on holiday and I had wandered into a telephone exchange to see how it works. At eight, I got an electrical outfit for a Christmas present, which was pivotal for me, because I took optional lessons with the electrical outfit. When I was 13, I had a radio and TV repair business and was able to repair the TV of my father’s friend just before the Queen’s annual Christmas address. He was so happy to be able to watch it, that he gave me double the money! This ingrained in me the importance of customer service at a very young age.
When I interviewed for ARM, they only had a draft business plan
When Acorn and Apple were interviewing me for this job, I was President of US2, in Silicon Valley and VP of ES2 in the UK. ES2 had great vision and great people, but the technology didn’t work as well as it should have, so with ARM, I wanted to start it right. I believed it was stupid to want to make chips with a seed capital of £1.75 million, and compete with the likes of Intel or AT&T. Silicon is like steel, it’s a commodity, the last thing we should have been doing was to build chips! I had a vision that we could be the global RISC standard and believed, that by licensing, and by everybody using our designs, we could actually get there. So, after numerous rounds of discussions, we formulated a modified business plan.
The job at ARM was a huge risk but it also had a huge payoff
There was a huge risk in taking up the ARM offer: it was badly funded and the business plan wasn’t clear. But it looked exciting and I would be working with a decent bunch of people, so I thought, “Why not?” I saw this as an opportunity. I am a natural risk-taker, but if you can find a solution to a problem, then I believe it never really is a risk in the first place. And unless you try, you never know and learn.
Managing a JV was the hardest thing I ever did
Before taking up this job, a friend had actually told me that joint ventures never work, and I felt it was like an ominous warning. From day one, I had the pressure of being the Chief Executive of a JV. I had to satisfy JV partners, Acorn and Apple board members as well as VLSI, my first manufacturing partner. That wasn’t always easy because they all had different objectives. So, I presented the strategy to the board and got it approved. I told the shareholders to let me and my team just get on with it. In August 1997, having spent £1M preparing for a board approved IPO, Acorn decided they no longer supported it and suggested I do a reverse takeover of Acorn. They owned 43% of the company, and life was very tough for several months, what Morgan Stanley referred to as our “journey through the wilderness”. We hung in there, and got the IPO back on as Acorn fired their old CEO. The running joke was that, after having managed a JV for years, going public then became the easy part!
Everybody told me the business model and strategy would not work
People would say of me now that I have a good vision. It didn’t seem so at the time. There were many naysayers. In hindsight, I see it as ‘progress through pain’. I was not afraid to make mistakes. I didn’t necessarily think that I was always right, but with all that I knew at the time, I felt that the path to go down was blindingly obvious — it was the only path.
Every single partner started life as a competitor
We were never really living with the fear that partners could steal ideas or turn into competitors. Right at the outset, we told ourselves that we were going to create the global standard that everyone would use. So, it logically followed that we would strive to make our competitors into partners. In helping them add their ideas into the architectural roadmap, they contributed to the overall business success. The thing about good partnership is that it is always win-win. Partnership is about bringing individual strengths together and finding a better solution for both sides.
I don’t see myself as a transformational leader
If you turn around a business that is going bankrupt, to me, that is a transformational leader. But I didn’t do that. I do think I am some sort of visionary, and I can see an opportunity, and I can help implement it. With ARM, I was fortunate enough to see the opportunity before other people. The world is going in a certain direction with such a huge momentum, If I hadn’t done what I did, somebody else would have.
When you start a business, you must do what is right at that point in time
Every startup is a risk. You cannot merely replicate a successful case; by all means, look at what worked, but also consider it in the context of the world you are in today. When I was looking at the ARM business model, there were 3 companies — Microsoft, Nintendo, Dolby — that I wanted to learn from. I didn’t just wake up one day and think I had all these big ideas. I grabbed the opportunities that came my way. This is the advice I give to startups too — think beyond the possible, and then back in to reality.
The challenge for tech entrepreneurs is that the time to money is longer than other industries
The time to money in tech is longer than in most other industries. Funding that and keeping it going is very hard. It’s best not to waste time on being a me-too. What’s the point? You have to figure out how to be the world’s best. When the economies of the world improve, there will be more venture capital available. Today, the opportunities in health monitoring, energy control, and bio-electricals are as big as they have ever been.
Thanks to all the great people I worked with and good luck in the next phase of ARM’s journey
I retired from ARM in 2007 with Simon Segars, someone I hired back in 1991, being today’s CEO. ARM was acquired by Softbank in July 2017. The ARM community has to date shipped over 100 billion chips. I would like to give thanks and credit to all of the great people I worked with. The best teams give an output greater than the sum of the individuals in the team.
Originally published at www.anupartha.com on June 9, 2017.