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Exclusive Interviews Interview 1 | Interview 2 Life Before CDMA Excerpts from a discussion with Irwin Mark Jacobs, CEO of QUALCOMM October 20, 2003 By Dave Mock  Dave
Mock: When you were in college, what was your original inspiration to get
into information theory?Irwin Mark Jacobs: Claude Shannon was down a few offices from me when I was on the faculty at MIT. I was thinking of going into electromagnetic theory, but there was so much excitement about information theory at the time. And having Shannon there giving some of the lectures… I went into the field partly due to Claude being there. Claude was really a unique person. DM: Before Qualcomm, you founded and developed a very successful company, Linkabit. How did it come about that you left teaching to start a company? IMJ: Usually when your teaching - it’s never formally stated - but you have a day a week for consulting because when you try to guide students on research problems it is also helpful to have practical orientation, otherwise you can make up all kinds of problems. The consulting turned out to be quite useful but there were many more requests for consulting than hours in the week, and it was on a flight down from AMES that I mentioned this to Andy Viterbi and Len Kleinrock. They said 'let's start a company' and I said fine as long as I didn’t have to manage it. I guess Len was the first official president but he quickly dropped out and we tried a graduate student who had come out to UCSD, Jerry Heller. DM: Now, after years of exceptional growth, what caused you to leave Linkabit? IMJ: Linkabit was sold to MA/COM in 1980 and for the first two years after the sale of Linkabit to MA/COM, it was actually quite positive. The chairman and CEO of MA/COM was also a PhD physics graduate of MIT by the name of Larry Gould. He and I got along quite well and worked together very well. But then the company was approaching a billion dollars in sales and moved down to Boca Raton and tried to run the company from there. He began to get a little nervous about the possibility of acquiring or merging with another major company. Then he tried to dismiss a few executives from the original company, Microwave Associates. Instead, they convinced the board that Larry should go and so someone replaced Larry as chairman. At that point it was clear that it wasn’t going to be a very well managed company. So for the next two and a half years I did finish a number of projects like the first TDMA phone and a VSAT terminal project, but after that it was becoming more and more apparent that this would not be my life’s work. DM: So that's the time when Qualcomm was founded? IMJ: Some of the people that had been with me at Linkabit thought that it was fun and that we should do it again. I had left on April Fools Day, Apr. 1 1985 and then we had some discussion whether to do it again. I was debating what to do - to go back to teaching, start another company or stay retired. On a trip through Europe with my family I finally decided no, let's start another company and stay in touch with interesting problems and interesting people. But we never had the foresight to imagine we’d do this well. DM: So what was the "mission statement" of Qualcomm? Did you have some early projects already going? IMJ: We had no product in mind. We knew digital, wireless and communications. We were also - at Linkabit - very opportunistic. We kept out eye out for possible opportunities - not areas of little bits of change, but some places that we would be quite innovative. Something that would make a major change. Something that perhaps if we brought it to the market quickly enough it would be a significantly sized market. So that was our approach. Linkabit was 10 years of government contracts before we got strongly into the commercial side. We figured it would be the same with Qualcomm. DM: How was Qualcomm financed? Was it bootstrapped or funded by private equity? IMJ: There was a small amount of self funding but it was really small. We all took very low salaries so the burn rate wasn’t very high. In neither Linkabit nor Qualcomm did we start with venture capital; we didn’t go that path. But as we became involved with OmniTRACS and they didn’t have enough money to continue the program, we decided that it was promising enough to carry it forward. That was one reason for the merger, but that did require money to finish the development - to lease the satellite space, for marketing and sales efforts and to get ready for manufacturing. So we did go out and get a few rounds of angel funding – friends and family. Then we did do a private offering with Goldman Sachs and after their investigation they ended up taking most all of the offering for their own funds. So that gave us some money to launch that OmniTRACS product. DM: OmniTRACS was your satellite-based solution that used spread spectrum techniques to provide tracking and messaging for trucking fleets. When did you first apply these methods to cellular technology and propose CDMA for terrestrial networks? IMJ: On a drive back from a meeting with Hughes about a mobile satellite system, Klein Gilhousen and I were talking and I realized that CDMA had a lot to offer for this kind of mobile communications. That was the beginning of our thinking about CDMA and also probably before the end of 1985. We did talk to Hughes about CDMA and of course when everyone heard CDMA in the communications context they were skeptical but Hughes did fund us to do more analysis and to build test equipment to test the concepts. That all worked out well. But it became clear that the mobile satellite systems would be several years out, so we laid this effort aside until the OmniTRACS contract from Schneider was complete.  |
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