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Interview With Patrick Henry, Former CEO at Entropic

Patrick Henry Entropic

What do you consider your greatest accomplishment as CEO of Entropic?

There are a few things:

  • Taking the company public on late 2007.
  • Navigating the company through the great recession of late 2008 and 2009.
  • Driving the company valuation to over $1B after the downturn
  • Establishing a de facto industry standard in communications with MoCA

Conversely, is there anything you wish you had done differently as Entropic’s CEO?

This is always a tough question because you’re answering with the benefit of hindsight.  I think the biggest things I would change are not hiring a couple people who I did, terminating a couple people more quickly, and spending more time with the employees and on internal issues.  At times I was very externally focused on customers, investors, suppliers, and other stakeholders.  I relied heavily on my team to manage the internal operations as the company got larger.

Can you please explain what a pure play semiconductor platform is to someone with no tech experience?

A pure play in any industry is a company focused on a specific product-market segment.  By investing in that company, you get a pure investment play on that theme.  This is opposed to a multi-product multi-market company, which can still be a pure play on a larger theme.  A conglomerate is the opposite of a pure play.

A semiconductor company makes microelectronic chips.  There are a variety of business models including what types of process technology and your supply chain.  Entropic was a fabless chip company, so we outsourced all manufacturing.

A platform company provides complete system solutions, including all the hardware, software, and reference design information and support to OEM customers.

I understand Entropic’s broadband access solutions are quite popular in China and are a major component of the government’s next-generation broadband initiative. Can you share what you did as CEO to facilitate that arrangement?

In building industry standards, the most important thing is to have a good solution for the problem.  This means it provides a good price-performance for solving the problem versus alternatives.  The solution must also solve a critical market need.

Beyond that, it is about building the right relationships and a coalition of key stakeholders to drive the industry standard.  In the case of China, government-controlled standards bodies are a critical part of that overall partner ecosystem.  Entropic was able to have a good solution and to build strong relationships with OEM partners, PayTV service providers, and the Chinese government to help drive the success of your c.LINK solutions for high-speed broadband access in China.

Entropic really entered the American home Internet market in 2004 with MoCA home network sharing solution, can you first explain what role that plays in Internet connectivity and discuss how you as CEO formed partnerships with Comcast, Cox, Time Warner, Verizon, and DirecTV? Was it easier to come to an agreement with one company after others had signed on? Is there any one of those arrangements that you’re particularly proud of as CEO?

We started sampling our first commercial product in 2004, but we didn’t launch our first deployment until late 2005 with Verizon.  Entropic’s MoCA home networking solution was first deployed in the Verizon FiOS deployment.  FiOS is a fiber to the premise (FTTP) architecture for deploying a triple-play service of Voice, Video, and Data.  MoCA was used as the home networking solution that enabled multi-room DVR, and MoCA was also used as the broadband ‘pipe’ from the side of the house to the router inside the house.

Before the deployment of MoCA, multi-room DVR did not exist.  You had to have a DVR in each room, versus a central DVR that operates as a video server to all the rooms in the house.  It was a very good value proposition for both the PayTV operator and the consumer.

Getting the first customer to deploy is always the hardest.  Not to say the others were easy.  It’s just that Verizon proved-out the technology and showed that it will work in a large-scale deployment.

In addition to the Verizon deployment, I’m most proud of the deployment we did with DirecTV.  In the case of DirecTV, we not only deployed MoCA, but we also deployed our Direct Broadcast Satellite Outdoor Unit Solutions (DBS-ODU).  It was a double win.

You also worked with Direct TV on the Direct Broadcast Satellite Outdoor Unit Solutions program. First of all, how awesome is it that your work made it all the way to space? And can you talk about the implications of this technology? Also, what was your role as CEO in the RF Magic takeover that many say precipitated this initiative?

I have sold solutions in the past that made it into space, but Entropic’s DBS-ODU products actually sit in the Low Noise Block (LNB) that is part of the satellite dish that is installed on the home.  In late 2006, as we were having great initial success in the Verizon FiOS deployment, we started considering the possibility of taking Entropic public.  RF Magic, another San Diego-based chip company had a DBS-ODU solution, that was a complementary product to Entropic’s MoCA solutions.  We made a decision to try and merge RF Magic and Entropic, and then take the combined company public.  It was a crazy 2007, but we were able to accomplish both.  Eventually DirecTV deployed both solutions in high volume, and it is still a key part of the overall DirecTV solution today.

While MoCA is used to distribute video and multimedia content inside the home, the DBS-ODU solution is used to deliver the video from the roof to the inside of the house.  The DBS-ODU solutions, like our MoCA solutions, had a very good value proposition.  Entropic’s DBS-ODU solutions simplified and lowered the cost of installing satellite TV service in the home.

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