Still Innovating in Networking: A10 CEO Lee Chen (Part 4)

SM: Silicon Valley is full of personalities. Steve Jobs is the most iconic, but somehow we are a very individualistic culture. Some of the most successful entrepreneurs are highly idealistic.

LC: Absolutely. They are driven and focused. They can set the march and others will follow and achieve their goals.

SM: True, but they cannot do it alone. Those types of leaders always require interim layers of individuals like you who have been able to interface with both sides. I find it interesting how you highlight your role as a screener.

LC: I was the middleman in a sense. Bobby could vent on me and I could turn around and tell our engineers what a great job they were doing.

SM: What was your sales model at Foundry?

LC: Mostly it was direct sales. Our product quality has been a key strength. Another thing Bobby is very good at is sensing a trend. When the bubble burst, he was already ahead of the curve and knew datacenters were going down. We had already moved to enterprise and we were able to do it without changing the sales model.

Because of Bobby’s ability to sense a market trend, we were the first ones to jump into an ASIC gigabit Ethernet company. We changed to merchandise chipsets before anyone else did. We were one of the only ones to survive and do well. I believe revenues were in the $160 million range. Foundry did well and continued to do well.

SM: One of the trends Bobby saw was that the datacenter market would go down with the Internet bubble crash, and because of that you did a market shift to enterprise. You also shifted from custom ASIC in-house to merchant ASIC?

LC: Correct. We were sourcing from Broadcom and Marvell. Bobby’s strength is his ability to be visionary, and we benefited from that. I learned a lot from Bobby.

SM: You were with Foundry from the beginning; when did you leave?

LC: I was there until August of 2004. Foundry had already gone public. It went public in just three years and three months. Another thing that was very good about Foundry was it only raised $30 million. Crosspoint Venture Partners was one of our big investors there.

SM: Do you remember the IPO price?

LC: At the end of the first day it was $85. Today it remains the second-largest percentage gain in a first day’s trading. It was also a pre-bubble IPO. It jumped 525%, so we did well. Another thing I learned from Bobby was the fiscal discipline. We only had 11 engineers. We were doing this in the midst of the bubble economics; you did not have to be profitable, yet we hit the IPO with a very small engineering staff. We were profitable for 10 months prior to IPO. It has always been a very tightly run company. We were tight with money before the bubble burst which helped us survive.

This segment is part 4 in the series : Still Innovating in Networking: A10 CEO Lee Chen
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