Starting out as an Entrepreneur in the Silicon Valley

If you've read previous postings in this blog, then you know by now that I spent 19 years working for AT&T Bell Labs, NEC, Sony, and Microsoft, and a couple of startups, where I developed hardware platforms and software systems such as the NEC PowerMate personal computers, the Sony VAIO laptop and desktop computers, and Microsoft interactive television middleware. As a developer, I have a passion for engineering prototypes and developing systems. With this in mind, I founded TransformTec in the late spring of 2004. I saw an opportunity in my years at large corporations and small startups to capitalize on the fact that sometimes, really good ideas never make it to market. Some of these innovative ideas are emergent, while others are almost ready to launch. But in all cases, the idea generators cannot or will not bring these to market. I founded TransformTec to convert these intellectual property assets into cash. TransformTec is a product development company and a technology broker. We've identified 41 acquiring companies in the telecommunications, multimedia, and consumer electronics space to which we want to market and sell. We analyze these acquiring companies’ strategic product roadmap needs, and fulfill them with client’s prototypes. In essence, TransformTec is all about converting intellectual property into cash.

That’s the summary of why I decided to become an entrepreneur. But if you’ll bear with me, I can tell you a little more below. Let me tell you 4 things about TransformTec. The leadership team we currently have in place, what TransformTec is, our paths to cash, and making money – what I like to refer to as “the TransformTec pipeline”.

From the get-go, I knew I could do all the engineering tasks myself - like architecture, design, development, and program management, at least in the beginning. But for the nascent company to be successful, I also figured I needed a web presence, some marketing savvy, and some legal guidance. First I brought Dennis Mesina onboard, he and I go way back, he’s been practicing law in the Bay Area for almost 20 years. Then I brought on board Jim Warholic, whose knowledge of crafting effective websites, and search engine secrets, has proven very helpful. Next I brought Chris Sanders onboard, who I’ve known for about 10 years (including at NEC and Sony), and his marketing and sales skills are invaluable. I am confident being associated with these great talents as we bring TransformTec to the next level.

I can think of no better way to describe my company than by simplifying its fundamental premise: Monetize intellectual property. At TransformTec, this is done in two ways: (1) by working with idea generators to develop their idea into a prototype and then selling that IP asset to an acquiring company, or else (2) by brokering a fully cooked idea between an idea generator and an acquiring company. For my company, there are two paths to cash. But in both cases, we need to understand the customers’ needs - in this context that’s the forty-one acquiring companies we are targeting. We need to engage with them and figure out how to take some technology under development over here, to fill a niche in their strategic product roadmap over there. One path to cash is through developing products with idea generators, and the other is through brokering technology. Then it’s simply a process of designing and developing a solution for the acquiring companies - preferably something that we’ve been working on with one of our idea generator clients! Regarding brokering technology, the path to cash there is through (1) cataloging intellectual property assets, (2) creating premium search services, and (3) offering topic sponsorships.

Finally, I’d like to explain the cash cow I’m building, My exit strategy is not to IPO or get merged or acquired. My exit strategy is to create a viable enterprise and lead that enterprise into the future, generating strong cash flow for stakeholders. I will stuff the TransformTec pipeline with projects every year. Projects go in on one end, and revenue comes out of the other end. Sounds pretty easy, doesn't it? Well, it is simple, but let me tell you, its definitely not easy! I intend to take on two projects the first year, with no sales activities or revenue generated. In the second year, I’ll sell off the first two project’s prototypes and intellectual property assets while simultaneously developing five more projects, and qualifying ten projects for year three. Ramping up staffing as needed and as appropriate is a skill refined from years of developing products. Conservatively guestimating each project to average $2.5m in revenues, by the time we get to year five I am projecting $50m in annual revenues. I expect to sustain twenty projects a year, with $50m in annual revenues, into perpetuity. Hence, a cash cow.

I’m very passionate about my work. Already in the past seven months I've learned so many new things as an entrepreneur in the Silicon Valley, things I never could have learned before. If any of this is interesting to you, I’d like to hear your comments. I would be interested in your feedback on my entrepreneurial ideas and my product development and technology broker company. I invite you to send us email at info@TransformTec.com. There are many issues facing entrepreneurs in the Silicon Valley today. I've been living and breathing them ever since I founded my new company here.....