Advice From a Serial EDA Entrepreneur: Find a Need and Fulfill It

By Rajeev Madhavan , Chairman and CEO, Magma Design Automation, Inc.

Rajeev Madhavan , Chairman and CEO, Magma Design Automation, Inc.

I grew up in Southern India in a very traditional family. My father worked for the Indian Revenue Service and my mother was a home maker. I was an average student, spending more time on cricket than any academic pursuit. I went to college and earned a B.S. in electronics and communication from KREC (Karnataka Regional Engineering College) in Surathkal.

My first business was driven by me and my friends’ love for comic books. I recognized a market demand and devised a way to meet it. I started renting my comic books to other kids on the bus and used the money I earned to buy new ones. I even worked out a partnership with a bigger, stronger kid to help me collect the fees. When my teachers learned about this venture, I was suspended from the school bus. That experience and the conservative Kerala culture at that time did not encourage in me an interest in entrepreneurship. But then I went on to graduate school at Queen’s University in Ontario, Canada, earning an M.S.E.E. While completing my thesis, I went to work for BNR (Bell North Research), the research arm of Nortel in Ottawa, where I had the opportunity to create some CAD software applications to help complete chip designs I was involved with. Despite no traditional background in electronic design automation (EDA) or computer science, while working at BNR, I ended up developing a lot of EDA tools. By 1991, I was working at Cadence Design Systems in San Jose as a BNR engineer involved in a long-term partnership between the two companies called the Analog Alliance.

The Vice President for business development at Cadence gave me several start-ups’ business plans to look over and evaluate. By showing me those business plans, he helped me understand the venture capital business and how ideas are funded. It was eye-opening to me to learn that you could earn a salary while working at a start-up and that you didn’t have to be self-supporting.

After reading a few business plans, I decided I wanted to build a start up. While I was at Cadence, I was consulted on licensing BNR’s BIST software since I had worked on it. With that background, it was natural for me to help found LogicVision, a provider of embedded test, BIST and automatic test pattern (ATPG) tools. The technology was innovative, but it was a challenge to calculate and then prove the value of our solution to our customers.

At LogicVision, I had an opportunity to integrate LogicVision BIST into Synopsys tools. Having worked on synthesis at BNR, I felt there was room for another synthesis player to compete directly against Synopsys. So, I left LogicVision and founded Ambit Design Systems in 1994. It was the first synthesis solution to successfully challenge Synopsys and it was acquired by Cadence in 1998.
After Ambit, I recognized the need for a truly different approach to IC design, synthesis and physical design needed to be integrated. We started Magma in 1997 based on that simple idea. Since then, Magma has become a leading EDA provider with seven of the ten top semiconductor companies using our software.

Lessons Learned

In addition to learning to recognize a need and develop a product to meet it, I have learned important lessons about how to run a business from each of my three startups.

At LogicVision, the learning was that creating great technology is not the only key to success. You have to know how to precisely define a problem, define the solution, determine the value of your product, communicate that value to the market and how to sell.

After Ambit, I looked at myself to see what I could improve. It was a revelation to realize that I should have been better at communicating with employees. I learned that I had to be more extroverted. This was a life-altering shift and changed the way I ran my next company.

My steepest learning curve has been with Magma. Over the last 15 years, we have expanded our product offering from digital place-and-route tools to providing comprehensive IC implementation, analysis, analog/mixed-signal design and yield management solutions. We successfully took the company public in November of 2001 when the country was still reeling from 9/11, battled through a tough lawsuit, re-wrote our software, nimbly navigated through the economic downturn and are in the process of being acquired. Through all these changes and challenges, I have learned a lot about how to work with people. I now try to figure out what a person is all about and use that to help motivate them to do something great for the company. I have learned to agree to disagree – without holding a grudge.

Over the years, my engineering background has allowed me to understand the complex technology required to build ICs, and to understand the customer’s problems. But, one of the most important things I have learned is you can’t solve all your customer’s problems. Clearly defining the problem and the solution – and accurately calculating what that solution is worth to your customers, is critical. Otherwise, you may end up with a great technology that nobody wants to pay for.

Seize Opportunities

While the world economy may be experiencing some turbulence, I still believe that with a good idea, a smart business plan, persistence, good people skills and hard work, now can be a perfect time to start a company. A little set back should not keep would-be entrepreneurs from pursuing a dream.

Founded in 1997, San Jose, California headquartered Magma Design Automation (Nasdaq: LAVA) is one of the largest providers of electronic design automation (EDA) software. Magma products are used by the world's major semiconductor manufacturers to design the most complex, high-performance integrated circuits being made today. The company is currently in the process of being acquired by Synopsys Inc (Nasdaq: SNPS).

 

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