I am excited to welcome Lip-Bu Tan as SiMa.ai’s newest Board of Directors’ member. I had the opportunity to sit down with Lip-Bu recently for a light-hearted inspirational session – a gift that I will always remember and would like to share with you.
I covered three discussion topics to gain insights from Lip-Bu’s vast experience while getting to know him as a person:
- Career and learnings
- AI/ML across the cloud and edge
Lip-Bu invested in SiMa.ai’s most recent funding round and his firms have a remarkable track record of investing in companies with successful exits, including 127 IPOs and over 90 mergers and acquisitions. He is extremely successful and there are very few who have his keen capabilities to identify so many attractive market opportunities.
The conversation took place in a very informal, friendly, and relaxed setting where Lip-Bu’s wisdom as a business leader and an investor came through. He was witty and projected a sense of calm and quiet resilience. One of the most striking features of the conversation I had with Lip-Bu was his humility and unassuming nature.
Here are some highlights of Lip-Bu’s background, his views on the state of the embedded edge market, and SiMa.ai’s big opportunity to capture market share in this explosive market.
Krishna: “You have the most interesting start in becoming a major investor in the technology industry, in that you grew up in Malaysia and graduated with a nuclear engineering degree. Could you please chronicle your amazing journey on how you got started in nuclear engineering, and then eventually pivoted to investing?”
Lip-Bu: “I was born in Malaysia and did my high school and college in Singapore, graduating with a BSc degree in physics from Nanyang University. I then came to the US on a scholarship and earned an M.S. in nuclear engineering from MIT”.
After completing his M.S. in nuclear engineering at MIT, he started his Ph.D. During this time, the Three Mile Island nuclear accident happened, and the US decided to not have any nuclear power plants. Based on his professor’s advice, he decided not to finish his Ph.D. Lip-Bu moved to San Francisco and found a job at EDS Nuclear. Here he helped in solving a big problem for Bechtel, a major player in nuclear energy at the time, related to methodology.
Lip-Bu was later recruited to a startup called ECHO Energy Consulting with three of the former senior executives from EDS Nuclear and they put him in charge of writing code. They gave him three computer books and asked him to study those and write the software because he was good at computer software. If this was not enough, they also told him that because he was the youngest on the team, by default, he needed to be the CFO. Lip-Bu said that he didn’t know what a CFO was, or what books he was supposed to be balancing. So, they sent him off to get his MBA at the University of San Francisco.
Lip-Bu said how funny it is looking back now considering that Schneider Electric asked him to join their Board of Directors three years ago precisely because of his background in nuclear engineering!
Krishna: “That is a great story Lip-Bu! How did you pivot from that to venturing out and starting Walden?”
Lip-Bu: “I was taking my last MBA class and one of the investment bankers came in to speak to my class. I have a very high sense of curiosity and I asked him so many questions that he invited me for lunch.” The banker told Lip-Bu that he had a very strong technical background and that the bank received thousands of business plans, saying “We need to sort out which ones we need to invest in.” Lip-Bu started going there one day a week which eventually became five days a week. This is how he describes his investment banking background.
“To make a long story short, I decided investment banking is not my cup of tea. I really enjoy building companies. So, I started Walden International and raised $3.3 million. And today I have built it to about $4.5 billion under management.”
Krishna: “You’re involved in helping many companies. How do you manage your time?”
Lip-Bu: “A friend of mine said he’d discovered my secret. He claimed I had a twin brother.”
“There are a few things I rely on. One of them is prioritization which includes whether or not to attend certain meetings. I always challenge myself. Do I need to be in this meeting? And if somebody else can do a better job, I have no value, so I just excuse myself from the meeting.”
“I also believe very strongly in empowering the people around me. I invest in my teams and empower them. Because I know my teams are empowered, I know they can accomplish a lot with or without me. After all, I can’t be all that I can be if they aren’t all that they can be.”
Lip-Bu also briefly described his lifestyle. He said that being trained at MIT, he does not need more than four hours of sleep, particularly when he is taking good care of himself. “My assistants know I need four things when I’m on the road – a king-sized bed, high-speed internet, a swimming pool, and a gym.” He said that he is a quick starter, and he believes that a lot of that is due to his dedication to getting regular exercise.
Krishna: “Fantastic story Lip-Bu! Now switching to AI and machine learning and your views on it. You’ve invested in a lot of technology trends over the last three, four decades. And from your perspective, how do you see machine learning from a venture business opportunity, both in the cloud and the edge?’
Lip-Bu: “Let’s put this in baseball terms – AI and ML are in the 3rd inning. In the first innings there’s a lot of hardware solutions. I’ve actually invested in some of them – SambaNova and Habana Labs, for example. Now we are using AI machine learning to drive real applications.”
While talking about the GPU technology, Lip-Bu said, “I think the power consumption of GPU architectures is very high and not the best technology to address the needs of the embedded market.”
This is one of the reasons that Lip-Bu decided to back a company like SiMa.ai with a purpose-built MLSoC™ because a GPU type of product cannot address the embedded edge market’s low power requirements effectively.
Krishna: “How do you see the embedded market which still seems to be very fragmented, with many embedded applications using classic computer vision architectures that have been around for a long time? How do you see machine learning playing an important role here? And what would companies like SiMa.ai have to do to really make a difference for customers?”
Lip-Bu: “There are a couple of things. The cloud side is already established with AWS, Azure, and Google Cloud Platform. Now they are all trying to get to the edge as well.”
“Embedded Edge is a huge opportunity. A new class of leaders will emerge from that battleground. That is where the battlefield is now.”
“There are many applications at the edge – automotive, industrial 4.0, UAVs, and drones – as the embedded edge is very fragmented. Power and performance at the edge are key factors for success.”
“The software component and the compiler technology will be key here. Whoever can address this with a full-stack solution, will be the leaders who emerge from the edge battle.” Lip-Bu added, “No one knows the embedded space better than the team at SiMa.ai.”
Krishna: “What excites you about SiMa.ai?”
Lip-Bu: “As I mentioned, the edge is the next great battleground. Execution will determine who comes out of that battle ahead.”
“The main reason I got excited is because of Moshe, yourself and the team and your past experience at Xilinx, and David’s leadership to go to market.” Then he added, “And I think you have a very good leadership in engineering from Gopal and the rest of the team.” He further commented, “SiMa.ai will execute on the hardware, the compiler, the architecture, and the software. That combination will be powerful.”
He said that it’s critical that every solution comes with a full-stack solution rather than just the silicon. “In fact, this is one of the things I love about SiMa.ai – the solution is a full-stack. And for the SiMa.ai team, given your experience with the edge, your strength in the silicon technology is a given.”
“I believe the industry is still deciding what the applications are for AI and ML. I think there’s a huge opportunity in healthcare and precision medicine, among others. But, I know, the other great battlefield is the embedded edge.” He added, “And that’s why I was delighted and honored to join your board. And be an investor in SiMa.ai.”
According to Lip-Bu, it is important to focus on software because it is the combination of hardware and software that will enable SiMa.ai to be successful.
Krishna: “What advice do you have for us? How can SiMa.ai take advantage of the opportunity in front of us?”
Lip-Bu: “I’ve always told people not to focus simply on just meeting customers’ requirements. The goal should be to delight the customer. Go the extra mile to offer solutions to real problems. SiMa.ai isn’t just talking about AI and ML. Anyone can do that. SiMa.ai has the opportunity to address the real pain points, enabling customers to actually use their data effectively. If you do that, the numbers – revenue, operating income, etc., will all take care of themselves.”
Krishna: “You have been a student of companies. What in your career has been consistent amongst the companies that have succeeded? What are the key indicators of success in your mind?”
Lip-Bu: “Joe Montana and Ronnie Lott are both good friends of mine and they always talk about culture. Trust. Knowing that when you throw the ball to someone that they aren’t going to fumble it. This is every bit as important in business as it is in sports.”
His advice is that in addition to having long-term investor support, it is important to also build a world-class team with the right culture for long-term success. He added that culture is like the bloodstream and that the best companies stay together during difficult times and do not break apart when they taste success.
Furthermore, the best companies can look beyond generating revenue and actually work to establish strategic partnerships. These relationships are how you create strategic value for the company and scale the platform.
According to him, if SiMa.ai maintains its focus on culture and on delighting its customers, he truly believes the sky’s the limit.
Krishna: “Where do you see SiMa.ai in five years?”
Lip-Bu: “I see a few startups, and none come close in terms of the quality of the team and the solution, that full stack that you are building. I like the team that you have, the culture that you have, and the team’s dedication and hard work.”
Despite his status as a renowned business leader with great success, Lip-Bu is down to earth and sums up the interview with these closing remarks.
“I learned to be humble. I may not be the smartest guy in the room. But I surround myself with the smartest people who are much smarter than me. And I have learned from them.”
“I am honored and humbled to join the SiMa.ai board and appreciate the opportunity. I’m going to learn during my time on the SiMa.ai board. I’m a fast learner and I expect to add value as a board member in short order. We have a chance to really make an impact and we’re going to make it happen together. Let’s work as one team to make SiMa.ai a great success, one that we all can be proud of.”