How To Build A $40bn IC Company From $1.75m Capital

“ARM is best at MIPS per Watt and MIPS per $,” added Saxby.

He recalled how he had to overcome the disadvantages of $1.75m in seed capital, no product except a chip design, no employees except 12 IC designers plus himself and no marketing.

To overcome these weaknesses he had to find partners.

“If you can get the money from a customer rather than a VC you get a better returm,” Saxby told the conferees, advising “get customers intimately involved with the project.”

In its early days ARM did a chip for TI who said ‘give us this die size or you don’t get paid’.

Saxby managed to negotiate that to a fee for doing the design but a bonus if they hit the right die size.

When ARM was founded the twelve designers had been promised a pay rise by their employer-Acom.

Saxby realised ARM couldn’t afford to pay it, explained why to the designers and promised them a back-dated pay rise when the money came in.

“No one got a salary increase to join the company.” recalled Saxby,”but they all got share options.That reduced cost.”

”The team is greater than the sum of the individuals – or it should be.” added Saxby. He has this slogan: “Think beyond the possible, then back off to reality

He reckons too many entrepreneurs focus on technology push rather than customer pull. “Getting the first purchase orders is the most important thin,” he said.

Saxby warned that:”The VC payback time is often too short to be successful to grow a global business to its true value. It’s a ten year minimum.”