The photonic industry continues to be a very dynamic market, where much of the innovation is driven by startup companies. At OFC/NFOEC in March 2013, the sixth workshop on startups and entrepreneurship was held. The workshop was specifically targeted to anyone interested in startups, wanting to start a company or involved in business development. Valuable tips were shared by a number of serial entrepreneurs among the 125 participants.
The workshop was kicked off by a presentation from Mike Hatfield, CEO and co-founder of Cyan, who previously was CEO of Calix as well as COO and co-founder of Cerent. Mike said that founders of successful companies have to be very well entrenched in the markets in which they operate. In addition, he shared the importance of writing a solid business plan, of thinking big, and of working with VCs.
A startup should solve a problem rather than being a solution looking for a problem.
Stan Lumish, CEO and chairman of Pilot Photonics and who has held numerous positions at AT&T, Lucent and JDS Uniphase, stressed in his presentation that a startup should solve a problem rather than being a solution looking for a problem. In addition, he pointed out how a startup should leverage local or national support. And his third observation is that this is a good time for making an exit in photonics.
Eric Swanson, chairman of Acacia Communications, is the co-founder or founding board member of five startups. Eric said that it is important to be driven by passion rather than just by money. Building a solid company and making a profit is hard work that requires a good team and good corporate culture. Eric stressed that there are a variety of funding mechanisms to get started, such as VCs, corporate partnerships, angles, or self-funded, and feels that each of these methods can be successful. But don’t focus on just getting money from any source. Getting bad money can lead to bad results. Refine your idea and team until you can get money attached to good advisors giving sound advice.
Building a solid company and making a profit is hard work that requires a good team and good corporate culture.
Valery Tolstikhin, who is founder and CTO of OneChip Photonics and previously was with MetroPhotonics, Nortel, Optiwave, and NRC, pointed out that a startup needs to have a disruptive solution that can be delivered to a market that has a serious problem. He then provided several examples based on solutions introduced by OneChip Photonics. Valery stated that while all funding sources play a role, building a real business often requires VC funding.
Jim Lowrie who spoke on behalf of Ian Jenks, the CEO of Intune Networks and who was, among others, partner at Crescendo, chairman of Oplink, and a member of many boards. Ian’s message was that VCs invest in exits rather than in "good companies". The buyers of photonics startups are different now than say 10 years ago. The market for exits has been improving and this in turn is driving new investments.
The buyers of photonics startups are different now than say 10 years ago.
The workshop concluded with a panel discussion, during which the audience raised questions about the importance of patents, how to attract good people, and the difference between hardware and software startups. Thanks to the efforts of all speakers another successful workshop was held where a lot of valuable insights were shared.
Handouts from the OFC/NFOEC workshop can be found on www.7pennies.com/workshop.html
Written by Erik Pennings, General Manager & Principal, 7 Pennies Consulting