BAIAblog

An Interview with Alberto Sangiovanni-Vincentelli, Professor and Entrepreneur

Alberto Sangiovanni-Vincentelli teaches at the prestigious University of California in Berkeley and is also a successful entrepreneur having cofounded the two largest EDA companies: Cadence and Synopsis. A proper introduction of Alberto would require long lists of companies, professional accomplishments, and academic positions. I recommend viewing his resume which is available on the Berkeley website. Last week, on October 17, I had the pleasure of participating in a BAIA event featuring a talk by Alberto. Despite living in the Bay Area for more than 7 years, it was the first time I heard a convincing and honest explanation of the Silicon Valley system, or ecosystem, as Alberto likes to call it. Aware of the impossibility of synthesizing an hour and a half into a short interview, I chose to ask Alberto a few questions about some of the most intriguing topics raised during his speech.

Alberto, can you tell us a bit about yourself and your several academic and entrepreneurial activities?

I graduated in 1971 from the Politecnico di Milano in Electrical Engineering and Computer Science. I spent 6 months as a researcher in Berkeley in 1975 when Politecnico sent me here to learn how to do good research. Then I became an Assistant Professor at the Department of EECS, UC Berkeley, in 1976. Since then, I have been on the faculty of this Institution. I left Italy at the beginning with very mixed feelings: I was quite happy in Milan. Now I am happy I took that controversial decision. I scaled rapidly the academic ladder and became full Professor (Professore Ordinario) in 1982. I hold an endowed chair, The Edgar L. and Harold H. Buttner Chair of EECS. An endowed chair carries additional funds for doing research and it is a very prestigious position that is given only to few people in academia. I also spent one year at IBM Watson Research Center in New York and one semester as Visiting Professor at MIT. During this 32 year period I was active in setting up companies based on my research work. In particular, I helped founding Cadence and Synopsys which are the two most prominent companies in EDA. I also consulted for many important companies including AT&T, IBM, Intel, Honeywell, Mercedes Benz, BMW, GM, HP, Hitachi, Fujitsu, Kawasaki, Pirelli, and Telecom Italia. I sit on 6 boards of directors of public and private companies.

You fully captured the essence of the Silicon Valley with one word -- ecosystem. Is it possible to foster the development of equivalent ecosystems (e.g., in Italy) or would such a combination of multiple factors only occur naturally?

An ecosystem is very difficult to replicate. It is as if one would  ask what it takes to transplant the Amazons to Europe... I would say it is impossible. An ecosystem is the result of particular local and global evolutions and it may take decades to manifest itself in its full strength. My position is that an ecosystem can be safeguarded and helped to maintain its unique characteristics but it cannot be created from ground zero.

In your recent presentation for the BAIA event in Berkeley, you mention the human network as a key factor of the Silicon Valley. How does the concept of networking in Silicon Valley differ from that of the one in Italy?

Human network in silicon valley is an amazing canopy. It grows and spreads like a vine in the Amazons to keep the analogy with the rain forest! It is the vital lymph of the ecosystem. People exchange continuously ideas and information in the most free format one can think of. Causal meetings at restaurants, jogging encounters, soccer games for the kids at school, everything gives a chance to the people active in the ecosystem to chat and brainstorm. The best ideas come out from this random interaction. The network is informal, there is no sense of hierarchy and of elitism. A young graduate student can bump into the founders of Yahoo or Google and exchange a few ideas in the streets of Palo Alto when sipping a coffee. It is really amazing to see this in action. In Italy there are of course important social networks but my view is these networks are stratified and being a member of a network of importance takes time and requires a sort of induction mechanism that stifles this free format that I believe it is vital for innovation at 360 degrees paraphrasing a concept by Pasquale Pistorio.

You are one of the few entrepreneurs who are not afraid to recognize the important role of luck in the creation and destruction of wealth. Why is it important to correctly understand the contribution of good luck to our successes and bad luck to our failures?

Luck has played an important role in all my life. I do not think that all that happened to the successful people in the Silicon Valley is due to superior intelligence and business sense. In fact, it is easy to trace the most successful formations of new companies to casual events. Even Yahoo and Google. For my part, I learned that luck is important by seeing how a positive turn of events, a delay or an acceleration in the market place can make or break a company. It is important to recognize the role of luck in our own lives to make sure that we do not consider ourselves as infallible. It is exactly when we think so that we make the most horrible mistakes that may cost too much to us and to others. By the same token, unsuccess is not necessarily due to us being bad or incompetent persons. Recognizing this gives a new perspective on life where one can build success out of failures. The important lesson to learn is to identify the root causes of our success and failures and make them a pillar of what we do next.

The success of the Open Source movement is changing the nature of the software business. As a Open Source pioneer, what is your opinion on this?

Open source for a University is a must. I believe that part of my success was due to this model. Everything we did at the University was open domain: any company could use our software and algorithms freely. In this way, our ideas spread world-wide very fast and demonstrated that what we did was important. The companies that were formed based on our results never sold the software made at the University, they adapted and changed. They built new tools, they leveraged what was done at the University. The free software distribution pioneered at Berkeley was seen by the community as a good model where many people can contribute and make the final product better and more powerful. The step towards making also operating systems, middleware, tools widely available to the community has been taken. The issue is now how to build solid business models and companies based on this idea.

You are trying to prove that large companies, such as Cadence, can be successful in doing in-house innovation. Can you tell us bit about how you are approaching this problem and the results you are getting?

Innovating in a public company is always a challenge. The pressure on quarter by quarter results is so strong that any investment in new technology that is bound to be negative for years and is going to bear fruits on a potentially long time-span, reflects negatively on the P/L (Profit and Loss) of the company and as a consequence on its stock market valuation. To come out of this quandary, most companies turn to mergers and acquisitions that in general are not reflected in the P/L. However, when trying to build long-lasting value in a company, this is NOT the most appealing strategy, albeit it looks like the best on a short time horizon. We at Cadence tried to build an incubation model that favors the formation of new groups that are innovation driven. They are managed almost as external entities with their own Board of Directors and their own financing model. We had preliminary indications of success in at least two cases. The jury is still out.

You enjoy making jokes about the rivalry between Berkeley and Stanford. Seriously speaking, how is the entrepreneurial attitude of people graduating from those two glorious universities different?

The differences are evident. Berkeley students IN GENERAL are more motivated by technical work and accomplishments. They tend to be more "faithful" to the companies they work with if their environment is conducive to their ideals. Stanford graduates are more inclined to build a new company as the major goal of their career. Economics tends to be more rewarding for them than pure technical work. I said in general since there are examples to the contrary. However, in my career, I have noted this as a major difference among the two groups. It is clear that Berkeley students also founded companies that are successful and lead other companies with great visibility: a case in point is Eric Schmidt, a Berkeley alumnus, who took Google public and who perfected their business model. However, Eric for MANY years had been working in deep  technical issues at SUN where he was Chief Technology Officer.

Several Italian companies are trying to establishing some sort of connection with the Silicon Valley in order to learn from such a successful model and to place their sensors at the core of the software business. Do you have any recommendations for them?

Do not try to copy Silicon Valley, it would be a major mistake. Learn from it and see how to distill the principles so that they could be remapped in Italian environment. Understanding the Silicon Valley implies that one has to be part of the community, not sitting on the sideline. Coming here as a visitor for six months is not a good approach. Come here and work in a company, or a VC firm and live fully the experience.

I would like to thank Alberto Sangiovanni-Vincentelli for taking the time to speak with me today. The Italian community in California must be honored and proud to have Alberto among its members. If you have any questions for Alberto or for BAIA, please leave a comment below and we will be glad to answer.

Franco Folini

An Interview with Massimo Scognamiglio, CEO of D-Helix

Massimo Scognamiglio is the founder and CEO of D-Helix a new biotech company based in San Francisco with strong roots in Italy. Massimo is approaching business with an angle that is quite unusual in Italy: he is trying to combine the best academic resources with a solid business structure and plan. While Silicon Valley success is based on this kind of connection, in the Italian business landscape Massimo is still an exception. In order to learn more about Massimo's entrepreneurial adventure I invited him for an interview. Enjoy!

Massimo, can you tell us a bit about yourself and your company?

In my opinion the most important part of life is curiosity. When it doesn't kill the cat. It is an extraordinary source of knowledge that you first learn as a little kid. And if you can retain that curiosity, it can become the most important source of knowledge. Obviously that's not enough - you also need to study and have some luck. My curiosity led me to try to understand the mechanism that governs the world around us. I guess "curiosity" it's part of my DNA. However, what explains my actions best is the concept of multitasking: my life is multitasking. Everybody knows that you have only one life that has to be shared with your friends, your love, your society and your professional life... so for this reason you can't sleep too much and you have to live your life to the fullest. And the most important part of that life is to maintain your integrity.
Talking about my company, it's difficult to start a biotech company, but it's possible if you can see the business opportunity. I have this opportunity and I turned it into reality, much the same way as my first venture. In 1996 I founded a multimedia company in Italy at a time when the market was not quite ready even for the concept of the internet. However, I was successful in convincing the market. It also gave me the opportunity to grow as entrepreneur. I understood that you have to risk your own money, your stable job, the most precious years of your life, and all your passion. In 2000 I sold my first company (xmedia) to the most important media group in Italy. Years later, here I am in California. D-Helix, my company, was incorporated in San Francisco in April, 2006: It is the project that builds the bridge between academic discoveries and the industry. You don't realize how many great discoveries never see daylight because they are hiding in the university. Our main business is to fill this gap by sponsoring early stage research in many biotech areas. Even thought the risk is greater, so is the payoff. At the same time, we think that we are on an important mission for society: transforming these groundbreaking technologies for the real world.

With your company you are building a business bridge between Italy and California. Can you explain the reason behind this choice?

Italy is so beautiful, the perfect place to live but it's not the right place to be an entrepreneur. California is the perfect place to start up a global company based on a global network between universities and research labs all around the world, between United States, Spain and Japan.

San Francisco, the Silicon Valley, and the Bay Area are becoming key places for the biotech industry. How favorable is the business environment in Italy for biotech startups?

As I said before, Italy, today, is not a simple place to work like entrepreneur, and the university research environment is even worst: we have some great university and great scientists but absolutely no entrepreneurial culture... for too many years (and probably also today) research has been considered a loss of money and not a gasoline for new companies and for the Country.

Starting up a company is a difficult job. Based on your experience what are the most common errors new entrepreneurs should avoid?

The one billion dollar question... the first answer that comes to mind is avoid arriving too soon: you risk being not understood, and you must have a "marketable idea." The second error is to choose bad associates: do not trust from the very beginning, build the trust day by day... You must remember that even the greatest idea needs a great team and great marketing to reach the market. For these reason I believe that D-Helix could be a winner: biotechnology is becoming mature, from the business and scientific side, and, at the same time, our associates are strongly committed to the company. When I present my company to an audience, I emphasize not only the business/scientific side but also my spirit, my vision, my very personal way of seeing the world, and my commitment.

You are a strong supporter of the connection between academia and business. How do you manage the bureaucracy of the Italian academia in a way that makes sense from the business point of view?

We are currently working in the United States. D-Helix is active in scouting, acquiring, developing, and commercializing groundbreaking intellectual property licensed from a number of universities and research institutes in particular areas of biotechnology (with current focus on environmental stress plant tolerance, biofuels, and antiviral treatment possibilities.) The company’s business model is represented by an independent innovative platform (made of a strong research world wide network of leading scientists with a deep pipeline of development), able to accelerate the research value creation time to market and reduce related direct costs. We will soon begin collaborating with some Italian universities, so wish us good luck! The bureaucracy is awful and it's still one of the most important difficulties when working with universities. You can't manage bureaucracy. If you are a very lucky boy, you can just survive bureaucracy!

Fundraising is one of the most critical steps for new entrepreneurs. Any recommendations?

A very good Business Plan, a short Time to Market, and a clear competitive advantage. Then great imagination and luck.

BAIA has plans to promote on Italian land the Silicon Valley open approach to business network. What will Italians have to change in order to fully benefit from those types of social relationships?

The network is the most important issue, more than the money. In Italy the network is always a closed network, you can't talk directly to anybody. The Californian way is the opposite: it's not a matter of friendship, it's just business.

I would like to thank Massimo Scognamiglio for taking the time to speak with me today. If you have any questions for Massimo or for BAIA, please leave a comment below and we will be glad to answer.

Franco Folini