Interesting article about Dot/Qcom/CDMA:
Spinoff success: Engineer finds niche in wireless telecom
The San Diego Union-Tribune
9/3/98
Rick Kornfeld considers himself an engineer, but a better title for the San Diego native might be the Spinoff Doctor.
In his 20 years as a developer of wireless technology, Kornfeld has worked for three spinoffs -- most recently the one he started with a team of local engineers.
While he has learned a lot about the wireless telecommunications business, he also has seen what makes a start-up company work and what can lead to its demise.
Kornfeld, who has held top positions at both Linkabit and Qualcomm Inc., is hoping his new company, Dot Wireless, reaps the benefit of his experience. "I've recognized what are some of the advantages of being a small company and a large company," said Kornfeld, 37. "There are advantages and disadvantages to both. But the most important asset a company can have is conviction and the flexibility to change direction if that's what it takes."
Kornfeld has learned that lesson by working for companies that have achieved enormous success, such as Qualcomm, as well as ones that have failed.
Dot Wireless was born out of a company that had great potential, but collapsed after biting off more than it could chew.
In May 1997, Kornfeld and some fellow engineers at [ NextWave Telecom Inc. ] decided to spin out a new company to expand development of the product they were working on. They founded Dot Wireless and focused on creating advanced chipsets -- the internal circuitry at the heart of cellular phones. It was a wise move.
This past June, NextWave's subsidiaries filed for bankruptcy. The company, which had bid $4 billion for digital cellular licenses, had been unable to make payments to federal regulators and needed to protect itself from creditors.
One of the most important things Kornfeld learned from watching NextWave's demise was to secure contracts and financing upfront, without diluting the company's ownership. To finance Dot Wireless, Kornfeld signed a multimillion-dollar contract with San Jose-based [ VLSI Technology ] to jointly develop an advanced chipset.
"Going into this, we didn't really set out to engage in a joint development of a chipset, but that boiled down to the best scenario," Kornfeld said. "We evaluated all the companies that we knew of that had publicly announced they were developing a chipset and found that VLSI had the best fit." With much of the financing out of the way, Kornfeld and his team of 26 employees have been concentrating on development of a Code Division Multiple Access chipset that can be used in cell phones, wireless local loop networks and other digital devices.
The company also is creating an end-to-end solution for manufacturers who are not currently in the wireless business. Dot Wireless is working to provide a road map for nontraditional communications companies, such as computer manufacturers, who want to expand into the fast-growing wireless market.
Kornfeld was bitten by the wireless bug while working for Linkabit, where he developed state-of-the-art digital communications systems for government and commercial applications.
He expanded on that work at Qualcomm, a Linkabit spinoff, where he served as vice president of engineering and helped develop cell phones. While at NextWave, Kornfeld and his team realized they had a great product in the chipset they were developing. While NextWave was focused on rolling out a nationwide digital phone network, Kornfeld's team wanted to see how advanced a chipset they could create.
As more products go wireless and wireless technology gets more advanced, Kornfeld said he wanted to be in a position to capitalize on the opportunities.
"If you look at the estimates of just wireless or cellular in the U.S., it's growing at an enormous rate. And it's really growing at an alarming rate if you look worldwide," Kornfeld said. "There are so many areas where they don't even have basic phone service. The way to get to basic infrastructure is through wireless and by using the products we're developing with VLSI."
In addition to capitalizing on traditional wireless phone use, Dot Wireless also is concentrating on expanding the capabilities of Code Division Multiple Access technology -- a technology developed by Qualcomm. Dot Wireless is currently trying to expand the CDMA chipset's data rate, which would give cell phones and other digital products increased capability. "This will open up a whole new series of applications, which the customer gets excited about," Kornfeld said. "For example, if you are someone who wants to read e-mail on the road or surf the Web while you don't have the opportunity to connect via wire, our new products would have the same amount of bandwidth as if you were connected to a wire." The company, which is privately held, is sustaining itself through revenue from VLSI and other customers, Kornfeld said. He expects to win other contracts from manufacturers in the near future.
While the company is doing well, Kornfeld said, it has not been a cakewalk. "There have been a lot of obstacles," Kornfeld said.
One of the biggest problems he has faced is the company's size and the fact that it is a relative newcomer to the scene.
"The hardest thing is we are operating in an environment where big companies dominate and one of the obstacles we have found is the perception that you need to engage with a large company," Kornfeld said. "I think most of the companies understand we have the capability and can add value to them, but they have this nagging suspicion that we're too small." Still, Kornfeld said, he has not given up and realizes his company's size can be an asset. While many bigger companies have the name recognition and resources, smaller ventures like Dot Wireless have flexibility. Franz X. Beirkner, who sits on Dot's board of directors and has run several local communications companies, said Dot Wireless' size is an asset because the company's tightly knit team is comprised of the best in the business. "This is the best CDMA handset design team," said Beirkner, who is president and CEO of Simpact, a San Diego communications company. "These are the people that developed Qualcomm's first CDMA handset and there's no better entity in the business."
Along with Kornfeld, the core team at Dot consists of Ana Weiland, vice president of engineering; John McDonough, vice president of engineering; Joe Thome, treasurer; and Gary Jorgensen, director of software engineering. All came directly from NextWave, but also have worked for Qualcomm, [ Motorola ] and other major telecom firms.
Beirkner said the team is developing state-of-the-art products that will generate a lot of revenue in the near future.
"The opportunity that they are addressing is the fact that there is a whole new generation of cell phone technology on the way." he said. "Dot Wireless is going to be the pre-eminent supplier of intellectual property relating to digital networks."
QUICK AUDIT
{} Company: Dot Wireless
{} Business: Develops, licenses, manufactures and markets advanced technology for wireless communication products.
{} Owner: Rick Kornfeld, president and CEO
{} Headquarters: San Diego
{} Employees: 26
(Copyright 1998)
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