This originally appeared in my “Entrepreneurial Engineer” column in EETimes as “No longer a startup, EVE aims for top tier of EDA players” on Mar-29-2011. I have added some additional hyperlinks in this version.
Dr. Luc Burgun is co-founder and CEO of EVE. He has more than sixteen years of experience in EDA in both engineering and executive management positions. Prior to co-founding EVE, he was R&D Director for Meta Systems, a French company acquired by Mentor Graphics in 1996 that specialized in hardware emulation systems. Dr. Burgun holds a Ph.D. degree in Logic Synthesis from the University of Pierre and Marie Curie in Paris and has been granted six patents. The following interview took place over E-Mail; hyperlinks have been added to offer some additional context.
Q: Can you talk about where EVE is in the market today.
This year is EVE’s 10th anniversary and we will celebrate this event with an expected year-to-year revenue growth of 50 percent. Even more remarkable is that the company is now profitable. We expect the emulation market to grow by 20 percent in 2011 and we are gaining market share thanks to our great new machine–the sixth generation of our ZeBu emulation platforms. We started selling ZeBu-Server in January 2010. In the past 11 months, we have sold about 30 machines to 15 different design groups, more than half of them first-time EVE customers.
We see more and more demand for performance, driven by software requirements, which is our key differentiator. We have also improved the product to the point where we can compete with traditional emulation players in hardware debugging, especially for very large designs.
Q: You are both a hardware company and an EDA company. How does that affect your perspective on customer challenges?
Yes, unlike most EDA players. EVE–like our customers and potential customers–designs both hardware and software, although our software development team outnumbers the hardware team by a factor of 10 to one. I believe we have a unique perspective that helps us to understand better the hardware/software co-verification challenges of our customers.
Q: It sounds like you are well beyond the startup stage, but not yet one of the top five vendors in the EDA market. What’s changed about how you manage the company when it was a startup?
Let me say that our goal is to reach the fifth position in EDA in 2012.
When you are a start-up, you focus on getting your first customers, and ramping up revenues as fast as you can. Profitability is not your top objective. Then, at our stage, achieving sustainable revenue growth and being profitable become mandatory if you want to stay in business and avoid further rounds of funding.
By the way, closing a round of funding today in EDA, at whatever stage, may be quite a challenge.
In the stage where we are now, you need a stronger organization to deal with all kinds of customer requirements. You need to empower the management team while still giving enough latitude to employees to succeed in their daily task.
This is also where you make important decisions between balancing your capability in terms of R&D and customer support and service. The more you go on, the more you tend to grow the field organization, but it’s critical to do that in due time, not too early…nor too late.
Q: What new problems do you face now that you didn’t as a startup?
Coordination between the different teams becomes critical. Like in an orchestra conductor, you have to make sure that all musicians/employees play the same tune. In the end, all employees have to share the same strategic vision and understand how their work can contribute to make this strategic vision become a reality. Also, you need to deal with different geographies and make sure everybody is on the same page. This is really 24/7 work.
Q: You have been involved in several lawsuits. Any advice for entrepreneurs on how to manage litigation?
You need to analyze the patent portfolio of your competitors on a regular basis and make sure the product you develop doesn’t infringe any patent. If someone starts litigation against your company, you want to feel confident that the plaintiff will have very limited chances of success.
Also, it might make sense to file some patents if they bring some visible differentiators to your product.
And last but not the least, you always want to make sure you have enough cash to defend yourself. In 2006, we had to make a concession by doing a settlement with a large EDA vendor, even though we knew we had a very strong case. But, as a matter of fact, we were just burning cash to defend ourselves and that was really frustrating. Ultimately, we decided we needed to focus our attention on building great products and supporting our customers. The litigation was a distraction.
Q: What problems have stayed the same since you started?
Everything is more or less the same–it’s just on a different scale. You need to make sure the product is going to meet the demands of your customers and potential customers and that you have enough differentiators to beat the competition.
At the beginning, your product needs to be good at one thing. Then, the more you grow, the more you can expand its usage so that you progressively open your available market. Also, the visibility of the company increases over time and it becomes always easier to compete against the large EDA companies. Only your product and the quality of your support team make the difference. On the other hand, you start to become a target and this is where you need to be paranoid enough, as Andy Grove of Intel writes in “Only the Paranoid Survive” and keep your eyes wide open.
Q: What have you learned? What advice do you have for engineers who are thinking about starting a new hardware or EDA company?
We learned a lot of things in fields where we had a limited exposure like finance, human resources, and even sales and marketing.
My main recommendation is to keep focused on your objectives. It’s so easy to be distracted by non-strategic or non-critical issues.
I would also suggest being somewhat conservative regarding the sales cycle. It’s one thing to build a product; it’s another thing to sell it. If that were not true, there would not be large companies like Synopsys with so many great products. Definitely, I am convinced that an effective sales and marketing channel is critical.
Q: Thank you for your time.