February - 2008 issue > In My Opinion

By Dinesh Ramanathan

All large semiconductor companies look for entrepreneurs within their workforce and try to create an environment to nurture entrepreneurial behavior. However, they often do not clearly articulate where and how the entrepreneurial spirit is needed within the organization. In my opinion, product marketing is where entrepreneurial skills are most needed and should be nurtured. Product marketing is where interaction with customers takes place to decide on the next-generation products and their features. Entrepreneurship in product marketing involves a deep understanding of the system that the product fits in to, the value proposition that the product provides for that system, and the longevity of that value proposition to the customer.

Business planning at cypress

At Cypress Semiconductor Corp. every product launch is accompanied by a business plan. This plan outlines the system level application of the product (which includes silicon, software, and reference and demo board). The business plan goes into the details of how the product will be manufactured and its cost, including a cost analysis of major features and its competitiveness in the market. It is the responsibility of the product marketing group to understand the competitive environment when the product is expected to be released. We avoid the ‘kitchen-sink product’, which includes all the features of all the competitive parts available in the industry at the time of the launch of the business plan. We typically question the value proposition of the product in the system and expect product marketing to know the die cost of every feature and the expected price that customers are willing to pay for those features. This approach keeps product marketing honest (unnecessary with entrepreneurs, but necessary within large semiconductor companies). I’ll come back to the role of product marketing after an overview of the business plan which drives every new product launch at Cypress.

The business plan includes the product’s die size estimate, yield, wafer costs, assembly and test costs, and timelines for its delivery for different purposes, besides engineering samples, pre-production samples, production and full production. This represents an alignment between groups responsible for marketing, manufacturing, test, assembly, and design within the company. Further, it captures the product’s strategic position within the long-term roadmap and the portfolio of the product line. There are several metrics to gauge the relative merits of each product within the portfolio and the long term roadmap of the product line.

The business plan also captures the revenues that the product line management is committing to deliver to the corporation for a particular product. This represents an alignment between the product line and sales force. It makes sure that the product definition has been vetted with customers and that customer demand exists for the features of the products.

With all this information captured in the business plan, the product marketing management can now assess a return on investment on this particular product and the return on investment on the family of products to which this product belongs. Both metrics are important, as they illustrate the value of platform architectures from which derivative products can be created with quick time-to-market requirements. Each area of this business plan has the need for entrepreneurs – people that can move quickly, are focused on a goal and are willing to do everything to achieve that goal within the timeline necessary to create a successful product for customers. Product marketing, however, is responsible for creating and driving platform architectures, and therefore being a product marketing entrepreneur (delivering to short term within the realm of long term plans) is especially critical for the success of semiconductor companies.

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