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Friday, June 26, 2009
Qualcomm, Linkabit founder Irwin Jacobs reflects on life in a startup
By Mass High Tech staff
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Last month, Qualcomm co-founder and former chairman and CEO Irwin Jacobs returned to New Bedford, where he was born, to participate in an oceanside chat sponsored by the Massachusetts Technology Transfer Center, the Southern New England Entrepreneurs Forum and MassNetComms. Jacobs spoke with Mass High Tech editor Douglas Banks at the UMass Dartmouth Advanced Technology Manufacturing Center in Fall River, where they discussed his start as an MIT faculty member before becoming involved in a pair of startups, including Linkabit and Qualcomm. He has since become a major philanthropist, giving to organizations in San Diego, Cambridge and New Bedford. Below is an edited excerpt of the conversation.
BANKS: Tell us about your first startup. You were a professor. You had an idea. How did you come up with Linkabit?
JACOBS: It was even less formal than that. I was teaching at MIT. We took one visit to California. A year later, we had a call from a former professor at Cornell, who had gone out to help start a brand-new university — University of California, San Diego. Having written a textbook on digital communications and having come from MIT, there were a lot of requests for consulting. Two friends who were faculty members at UCLA said, “Let’s start a company and share consulting.” And that’s how Linkabit started: It was a day-a-week consulting company. Then it kept growing, so I decided better take a little time off from teaching and get it organized. And found out that was fun.
BANKS: So you sold the company to M/A COM?
JACOBS: Right. Linkabit grew about 60 percent a year every year, and was profitable. How? For the first nine years or so, it was mostly government business, defense, DARPA, NASA, and so you could get advance payments from the government.
We came up with an idea of working with Schlumberger. They’re out oil drilling in very remote areas. Guys with, you know, big gloves and not used to electronics by any means. They had to get the data back to the customer to decide whether to continue to drill. They had no good way of doing that. It would take several days and it was very expensive to keep drilling. So they came to us to build a satellite terminal, and we built one that could be used by people with gloves. That turned out to be successful.
BANKS: So what was your original vision for Qualcomm?
JACOBS: I managed to stay retired for three months after I left Linkabit.
At Qualcomm, we had no business plan. We had no product in mind. We didn’t put much money into it. But we knew wireless. There had to be something interesting there. And within I think the first six months, we came up with various ideas that have kept us basically busy ever since.
One product someone came to us with had to do with a communication system for the trucking industry, a device that you could put on a truck that, anywhere it might be in the entire continent, it would be able to communicate back and forth with the headquarters and also give a positional location. The company asked if we could come up with a solution, which we did.
In business, perseverance is always required. It turned out there was another company, Geostar, who had about $180 million of financing and also a related company in Europe, funded by France and Germany, who wanted to launch their own satellites to provide this service.
Actually, in explaining why the problem was so hard to one of our financial people, the solution suddenly popped out, luckily. In any case, we managed to get that. We then had this competition going with the other company. So, one night, I’d wake up at 4:00 a.m., “this is going to work.” The other night, I’d wake up and wonder, “who’s going to win?” And so we worked at it. They worked at it. We eventually got the first contract from Schneider National, which was the largest at the time, largest trucking company. Geostar eventually went bankrupt. We had to go to Europe to fight the sister company, Locstar, in Europe. They also went bankrupt. So when you come up with a better idea and you kind of persevere at it, sometimes you can make things happen, but you better do your homework and make sure you understand the competition well, and not just the technical, but the business aspects as well as the financial aspects.
BANKS: What was your biggest challenge as both founder/CEO and an academic?
JACOBS: [Interposing] Well, I was lucky in both cases in the sense of starting from a very small company, just a few people to get started. When you do that, you have to do every job in the company. So not only do you do the technical side and engineering, which in some sense was because being an engineer was very interesting, but you had to take very seriously the financial side, the program management side, the marketing side, the sales, analysis, and then a whole range of things. One of the things we always were very careful about, both Linkabit and Qualcomm, was to treat every one of these as an area where you can be innovative.
I had the opportunity of doing each job and then be able to go out and find somebody to run that particular area, and we always made the point of, ‘Let’s do it better.’ So by thinking about it very carefully, every aspect of the business, and finding the right people then to fill in and do that, it all worked out quite well.
BANKS: You and your wife Joan are generous philanthropists in San Diego and New Bedford. You continue to come back to New Bedford to give back to the community you grew up in.
JACOBS: One long-term interest is to improve our educational system, and we’re very focused on the science and engineering, math, biology areas to try to help out there. We also provide a lot of support to the public school system. It’s not just charter schools, but the charter schools do give you a bit more flexibility.
BANKS: Can the United States compete in technology over the next decade? How does that happen?
JACOBS: Well, China and India are often brought up. South Korea’s got a very good public system and a reasonably good college, but still a much smaller country. We’re not going to be successful in the future without training very good people, having the ability to go and do innovative work. We have indeed a large market of our own. They have a much larger market. As they bring up the level of their education, it’s going to be harder to compete.
We still have, by far, the best research universities, and so the higher education’s good, but if we don’t do better in K-12, we’re just going to lose out, so it’s very, very critical to provide support. And of course, with this recession, we’re all going in the wrong direction.
BANKS: One last question, from the audience: “How important was mentorship for you in your career as regards innovation and entrepreneurship? And how do we foster more meaningful mentorship in Massachusetts?
JACOBS: Well, people often ask which person might have had the greatest influence on me, other than the professor who persuaded us to go to California, which was also very, very good. It was his work that went to the antenna, but Claude Shannon, who was originally at Bell Labs, invented or came up with information theory during World War II, looking at crypto problems and then came to MIT. So he had an office just a couple doors down from me. That was the reason I got so excited about it and ended up going into information theory.
On mentoring, I probably relied much more on paper. I would ask people, you know, when you start a company, which functions you need in a company, how do you organize them, how large, etc. But I mostly would look at paper. I did have a particular mentor, but we found that there were a lot of startup companies in San Diego. And as you mentioned, I think it’s well over 100 people that came out of Linkabit and created subsequent companies that needed mentoring but also help on insurance and legal matters, financial — a whole range of issues.
So we set up an organization to bring all these various people together and then if you wanted to come out, start a company, they’d have meetings of various kinds. It’s been exceedingly active and I would say quite successful.
Editor's Note: An earlier version of this story misidentified a company that went bankrupt from the competition in the industry. Please note Irwin Jacobs said that Qualcomm's competition, Geostar, and its sister company, Locstar, went bankrupt. Schneider National has never filed for bankruptcy.
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