Transcribed by https://otter.ai
Michael Douglas in Wall Street
Never seen a pain captures the beauty of the ocean. In a moment like this.
Scott McGrew
There’s a scene in the 1987 movie Wall Street where Michael Douglas playing the character Gordon Gekko is walking along a beach talking into a cell phone It was memorable at the time because many of us had never seen someone using a cell phone. And it’s memorable now, because that phone, a Motorola Dyna attack is enormous. It weighed two and a half pounds. If you’re listening to this podcast on an iPhone 11, your phone weighs less than seven ounces.
Buno Pati
We had a really interesting project to try.
Scott McGrew
Now we’re not going to talk about cell phones. This week, we’re going to talk about chips in India and venture capital of course, but let’s start with those chips. The reason your cell phone doesn’t weigh as much as a brick, is because the circuitry inside of it has gotten much, much smaller. The transistors about the width of a virus now was narrow as seven nanometers. Butoh potty is one of the people that made that possible.
Buno Pati
The view there was I had committed some kind of a crime at Harvard at Harvard.
Scott McGrew
Dr. Patty was an assistant professor at Harvard teaching electrical engineering, when he started playing around with the idea of making chips, very, very small, through something called phase shift lithography. I’ll explain more about that later. But at the time, his biggest worry, was convincing Harvard to let him start a company.
Buno Pati
So I went to the dean, and I said, I’d like to take a brief leave of absence to set up this company. And I’m going to go hire somebody, he will run the company, and I’ll come back after six months leave of absence. So ultimately, I did leave and I still didn’t have an answer. So I went back and started the company. And about a year later, I received a note that said, congratulations, we have proved your leave of absence. Would you please come back and teach this class next semester?
Scott McGrew
You said a germ of an idea, but you’re being somewhat modest because phase shift lithography turns out to be this incredibly empty. development.
Buno Pati
And that it was so that was a really interesting time. Because at the time, the leaders in semiconductors, the Intel’s and the cemetery x and IBM had invested billions 10s of billions of dollars behind an alternative, which was X ray lithography. And this is the value of not knowing any better. I thought my idea was better. And so we went out and said, All right, here’s how you should make chips. I had never seen a fab at that time. I had no idea how chips were made. My background was in wireless communications. And they said, Well, no, that sounds pretty silly. So nobody would fund the company. And we somehow managed to bootstrap it and build it up in a.com world where all the attention was focused elsewhere. Well, as it turned out, that is how every chip in the world is made today. And so x rays are gone. The there is no mention of them anywhere. And that was something that was that that’s a point of pride to be able to change an industry like that but it’s also a testament to how valuable it is to be naive. Not knowing that something can’t be done that before says are all working guests you no one wants to fund it. The customers don’t want it they believe in they have an alternative. Why would you start this company?
Scott McGrew
The company party made numerical technologies went public and later sold to synopsis for a quarter billion dollars in 2003. Giving party the money he needed to become an angel investor and eventually joined center view capital and create Nexus Venture Partners investing in India Nexus would lead him back to one of his childhood homes. You yourself are not from India, you’re from Maryland.
Buno Pati
That is it. You know where you’re from question should be an easy one to answer. It’s not enough for me. So yes, I was born in DC. My father was a professor at the University of Maryland. I grew up in school in India, in Europe. And that’s where I was in boarding school in India, and went to school in Switzerland. And we spent almost 20 plus summers in Italy three months a year. And that’s one of the beauties of being a professor. You can move around and think about the ideas that you’re germinating anywhere you bet. There’s a university and people to talk to. So we moved a lot from that perspective. And India was, I was a boarding school there for about four years and then two more years with living with my grandmother. And so prior to high school prior to college, I was mostly in India,
Scott McGrew
what have you learned from living in Switzerland and Italy and India and America have I got them all?
Buno Pati
Almost, but yeah, so that’s close. Enough, that’s the bulk
Scott McGrew
What have you learned from all of those different places?
Buno Pati
You know, I think that’s one of the most more valuable experiences and lessons that I have had the pleasure of being part of, at the end of the day, you know, we live in a global economy. We are, you know, connected in so many different ways. Yet our cultures tend to be different ways means of doing business in different places, how the pace at which things move, how decisions are made, what’s important, culturally, the all of these come into play when you are looking at things such as operating a company and selling in other countries, or investing in other companies. Without that basic understanding, it doesn’t work. And so Nexus was a remains a very good example of that. It’s a cross border fun today. The understanding of what is important to entrepreneurs in India is critical to the success of a firm fund like Nexus, there was a brief period of time, when a number of Silicon Valley venture capitalists felt that they could parachute in to places like India and China and do deals and and jump back on a plane and fly home. That doesn’t work. That doesn’t work, you have to understand and appreciate what that culture is and what’s different there. And that exposure that I had early on, helped me at least appreciate not necessarily know what all of these cultures are, but appreciate that their differences are meaningful, and to be successful in any one of these places. You have to understand
Scott McGrew
you obviously have a big advantage having done much of your schooling in India. But is there a difference between an Indian American who is American and in Indian American who came from India and became an American, are there different approaches to anything that I would not be aware of?
Buno Pati
You know, it’s, it’s, I would say yes. And,
you know, I spent a good part of my schooling in India. So probably I have a meaningful amount of overlap with someone who has come from India and gone to school here. I would say that there are a few things that people look at differently. One is education. In fact, the value of education is, I would say heightened in a place like India, where it’s appreciated almost at every level, regardless of your background or means or what your family has been doing. That is instilled at a very, very, very early age. And is you know, it is is valued at the highest level, I would say there are many other cultures where that is true. It’s not necessarily the sole driving factor in the United States. And India it is. So I think those differences eventually bubble up into how people work, and how people will build their companies or operate their funds. BD, it does make a difference.
Scott McGrew
You took a company from startup all the way through IPO, all the way to acquisition. So you’ve seen the entire life cycle of a company. Is there one aspect of that life cycle that is more difficult than the other? Is there one aspect of that life cycle that is more rewarding than the other?
Buno Pati
Absolutely. The part that’s difficult, and I’m going to relate this in a moment and extend your question a bit, too. What’s going on today is when you’re just starting out Trying, the hardest thing is to, first of all understand what you need to do to build a company. But then also appreciate that you may not be in fashion today. So starting a semiconductor company in the mid 90s was not a fashionable thing to do it, there was no.com at the end of that name. And at the, at the time, it seemed like this incredible disadvantage that I had. And so I did the best I could to get to bring some money into the company and then I surrounded myself and we’re so fortunate in this area to have people who can help you from a mentorship perspective and surround myself with people who could help me and we built a company. Now, what was rewarding about it at the end, having done that and taking it to the point of a public offering, we had well to give you idea that we had only raised about $8 million in venture capital, the lead venture capitalist owned about 6% of the company. And at peak, the company had a $2 billion market cap. Well, that was quite rewarding. The second part of it, which is probably the ultimate reward, and I would value this far about the financial reward is the fact that we were able to in fact, alter the course of an entire industry, something as important as semiconductors. And if I want to point back and say what was the most rewarding aspect of that is that fact the most challenging, like I said, is figuring out how to do this when money is not abundant. You are not in fashion. And here we are blessed with the surroundings that we have the people that we have access to. That is a truly unique environment and culture to be in.
Scott McGrew
Can you explain to someone who is not a piece PhD in electrical engineering what phase shift lithography is?
Buno Pati
Oh, absolutely go over. So fabricating chips involves a process called photography. lithography is effectively a photographic process where you take an image of the circuitry you’d like to fabricate, and you projected on a photosensitive material. And then you go through a development process and create your wires and your transistors and so on out of it. Now, when those features become very, very small, so small that they are indeed smaller than the wavelength of the light that’s used to project the images, you get a very blurry image. And so what was X ray about just lowering the wavelength, so clean up the image of it, we found that you could actually manipulate the light itself. And instead of simply adding light to the image, you could subtract light from the image if that makes sense. So you can use face shifting or shift the face of the way The light waves to quite literally subtract. And by doing so you could make your theoretical resolution of that feature is infinite. And which is why, you know, we’re sitting here 20 years later, we’re still making chips that way. It
It has some legs,
Scott McGrew
does, what’s the next major step forward? Is it quantum computing? Is it what’s what’s the next thing where we’ll say we had almost run out of the ability to do this and then this game,
Buno Pati
I think we have pretty close to run out of our ability to do this today. And it’s not that we cannot make smaller transistors. It is simply the the issues that arise as you do that, such as power consumption, become formidable. So and alternative paradigm for computing seems like a logical next step. And again, I’m not so close to quantum computing, but that is certainly a promising
Technology and a promising paradigm go forward.
Scott McGrew
Going forward for party serving as CEO of info works, another company he helped create, perhaps taking that company public as he did numerical technologies. info works helps companies manage their data.
Buno Pati
Companies that are born digital
start out by laying a foundation to manage their data and have it accessible to do really interesting things. Whether it’s providing a better consumer experience, operating their business more efficiently or improving the way they make decisions. Companies that did not start out that way, have data, plenty of data, but they don’t have the foundation on which they can build those capabilities to give you a better experience as a consumer through AI or machine learning or other techniques, or improve their business processes or make better decisions. They don’t have the foundation. What do we do? We lay down that foundation for companies that have not had the benefit of being born digital, so that they can gather the data, organize it and make it available for whatever businesses purposes they need to grow and gain competitive advantage.
Scott McGrew
Those companies that aren’t born digital, do they know they need you?
Buno Pati
Absolutely. This is existential at this point. Right? If you are a retailer trying to compete with Amazon, how do you do that? Without harnessing your data? You cannot. If you are a, you know, a large institutional bank, competing with the online banking efforts and even folks like Capital One, how do you do that? Without harnessing that data? we as consumers have come to expect a very different experience from banking from retail. How does that experience get delivered, it gets a little We’re by harnessing data and using
Scott McGrew
Sand Hill Road is produced and edited by Sean Myers and executive produced by Sarah bueno. And Stephanie a journey. For more interviews with Silicon Valley’s most influential entrepreneurs check me out on TV at press here. That’s Sunday mornings on NBC Bay Area, and everywhere in the world on iTunes. At it press here TV. com.
Woman’s voice
Earlier we talked about Silicon Valley Bank and their experience in helping high growth companies succeed. With Silicon Valley Bank, these startups are getting a partner committed to supporting them as they strive to hit their next milestones. Perhaps that’s why 67% of us venture capital backed companies with an IPO in 2018 chose to work with Silicon Valley Bank. Visit svb.com backslash next to learn more Silicon Valley Bank ideas bank here
No Comments, Be The First!