Profile - David Wollen

From corporate to startup & back: the double-life of an entrepreneur

By The Chilli analysts

Past profiles have examined entrepreneurs starting up in their youth or spinning out of university. For this issue, The Chilli takes a look at a seasoned entrepreneur who has lived in both the corporate and startup worlds.

David Wollen, an alumnus of Texas Instruments (TI) and Digital Equipment Corporation (DEC, acquired by Compaq, later merged with Hewlett-Packard), talks to The Chilli about his experiences in establishing Dialog Semiconductor, and the lessons in entrepreneurship he has taken to Renesas Technology, the company formed by the merger of Hitachi's and Mitsubishi's semiconductor divisions.

David Wollen

Contrasting styles

After graduating in physics from Imperial College London, Wollen spent some time working in satellite communications for Marconi Space and Defence as a microwave engineer. He returned to Imperial to study for a post-grad degree in computer science, "I had become disillusioned with the management style in British electronics at that time, with its emphasis on bureaucracy rather than competitiveness. I also came to realise that the computing and semiconductor industries seemed to offer more exciting prospects to a young engineer."

After completing his studies, he joined Texas Instruments (TI), then the leading semiconductor vendor, in a microprocessor software development role. After proving himself, he later moved into microcontroller marketing for TI Northern Europe, then pan-Europe, responsible for all 4-, 8- and 16-bit families and finally launching the TI dsp product family. Commenting on TI, Wollen says, "In contrast to the management style at Marconi, TI was a revelation. There were plenty of new opportunities to contribute to the business, and TI, although big, focused heavily on its long-term future, and was not a hostage to its short-term business, providing me with good lessons for my later career. I also learned what a difference it makes to have a great product, since customers raved over the dsp products. It now seems obvious, but I realised you have to be ruthless in differentiating and focusing on the winning products."

Corporate entrepreneur

He left TI to join Digital Equipment Corporation, the leading minicomputer vendor of the day, and was running European marketing in DEC's entrepreneurial "Special Systems" division, "We were looking at ways to leverage DEC's prowess. We took the company into speech recognition and synthesis, and also generated gate array business - minicomputer vendors were at the time a big driver behind advances in process technology, much as desktop microprocessors and DRAM are today." He also contributed his semiconductor experience to the establishment of DEC's South Queensferry foundry, which manufactured the DEC Alpha series of microprocessors, as well as being a foundry for AMD's 486 microprocessors.

Wollen summarises the key experiences from this time "You learnt to take risks and appreciate the importance of sheer energy and enthusiasm to drive initiatives. Most importantly, you learnt how to assess technology with a view to how it fits in with mature end users, rather than just early adopters. Our proposition, and our business plans, had to be benefit-focused. All very different from the semiconductor vendor approach at the time."

Startup from the ground-up

In 1986 Wollen was approached to join other former TI alumni and engineers returning from Silicon Valley in founding IMP Europe as a pan-European fabless chipmaker, later to become Dialog Semiconductor (Nasdaq listing: DLGS).

IMP focused on developing custom asics (application-specific integrated circuits) integrating analog and digital logic together on a cmos process - so called mixed-signal devices - targeted at telecommunications and industrial applications.

IMP Europe was funded by IMP in the USA (effected through a foundry arrangement), and by a consortium of VCs. "Our investors included Legal and General and the National Coal Board's pension fund - very different to today's VC environment, but the key thing is that they understood and appreciated that the domain expertise remained with the founders, and that the investors were there to help the founders build the business over the long term." Wollen notes that the VC community has evolved a lot since then, with some providing domain expertise to their portfolio companies. "In a few negative instances, this has blurred the line between advice from investors and management interference from investors. However, in the main, domain expertise from an investor helps provide a better perspective and can open up new opportunities."

Wollen sounds a cautionary note for startups, "Seed funding usually runs out quicker than you expect, so you should take the long-term view and look for partnerships early." The partnerships first involved upfront charges in the form of nre (non-recurring engineering costs) funding, and later, partners took an equity position, and allowed others to participate, "It was great as all our partners wanted us to succeed, so they didn't use us as a blocking tactic against their competitors. In fact, they encouraged us to work with a wide customer base." Wollen stresses that it's key "Not to get dragged into the customer-partner's internal business issues, so balance your relationship with them between the customer and investor axes", as well as using partners to isolate your business from the dynamics of just one end-market.

Wollen attributes the company's success to the fact that the founders targeted a niche area, "Mixed-signal was viable, but many vendors struggled to do it profitably, so we educated customers on the benefits of mixed-signal devices, and demonstrated our proposition for the nascent mobile phone market, successfully integrating the analog-to-digital converters with several other functions." This was also helped by the fact that the company adopted something of a large company attitude in that "We partnered with large companies and considered ourselves domain experts, so we didn't suffer from 'startup inferiority complex'." The company also paid attention to customer satisfaction, and saw itself as a service company (at that time), with openness in partnerships. According to Wollen it would, "budget upfront for three iterations (functionally correct, parametrically correct to design specs and then finally, tuned for volume fabrication) and put that in the plan. Competitors would often undercut us at the quote stage, but would rarely deliver to the expectations they set. It took some guts to do that, but we reaped the benefit of our integrity by receiving repeat business." The company continues to operate very successfully today and has expanded it markets.

Wollen stayed with IMP/Dialog for ten years, starting as marketing director, later running the UK headquarters, and also moving to the USA to establish Dialog Semiconductor's US headquarters.

Return to being a corporate entrepreneur

After some time working with VCs to develop a portfolio of companies, in 1997 Wollen returned to the UK to run the European marketing operations for Hitachi's semiconductor unit. In 2003, Hitachi and Mitsubishi merged their semiconductor divisions to create Renesas Technology, one of the world's largest semiconductor companies. Wollen says, "Renesas has been born during tough times, requiring an entrepreneurial approach. Renesas has the resources of a large organisation, and we hope to bring some of the agility of a startup to it." Commenting further on the newfound independence, he says, "We are a standalone company, and we are trying to build a culture of energy and commitment to build on our leadership position in several new markets driving the future semiconductor industry."

Wollen's ten tips for entrepreneurial activity

1. Focus: get everyone singing off the same hymn sheet and be very goal orientated - professionalism will come with it

2. Commitment: lock, stock and barrel to the idea, making you wake up in a cold sweat when you think you aren't achieving it

3. Team: you get a fantastic chance to choose the right team for the job, but don't rush it

4. Risk taking is encouraged (it goes with entrepreneurship), but don't be reckless

5. Express opinions openly then discuss, decide and move on: avoid turning your company into the Oxford debating society

6. Partnerships: partner with your customers for the long haul and increase your repeat business with each customer won, but don't let your business be dominated by just one large customer. Nobody can carry off your idea better than you can, so don't be afraid to share know-how with those you wish to cement partnerships with - you won't really be giving away the crown jewels.

7. You are an expert in your field, so don't develop an inferiority complex because you are a startup.

8. Budget for 2-3 iterations or whatever it really takes to get the job done properly.

9. Target a niche unaddressed or unnoticed by others and understand your markets in detail. No one can really predict the future, but be able to read the signs of change and be prepared to move quickly.

10. Those changes will occur in markets, so it's important to balance your plan with adaptation to new business opportunities that you may find.

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© Chilli Publishing Ltd 2003

07JUL2003