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Six Degrees of Milton Chang

MOUNTAIN VIEW, Calif. – Welcome to the new optical-networking sitcom: Everyone Loves Milton!

And why shouldn't they? When Milton – Milton Chang, that is, the optical startup wizard – was stuffing guests full of succulent sushi, admirable appetizers, and fine wine?

Milton Chang As the host at the launch party held here for Incubic LLC last week, Chang was typically bucking the trend – providing a bit of a bright spot in a season of industry gloom (see Chang's Investment Shop).

Where else, for instance, could someone wearing a "JDSU" name tag find sympathetic ears for a rant about how the company wasn't collapsing? Where else could the top dogs from New Focus Inc. wander around with glasses of Chardonnay and smiles, without dealing with the wrath of those who bought the stock at $100? (See JDSU's Acquisition Hangover and New Focus Sees New Losses.)

As at the wedding scene in Monty Python and the Holy Grail, this was a happy occasion – and not a time to bicker about "who killed the quarter."

There's no better person to restore the zeal than Chang, whose legend is that he's never invested in a startup that failed. And there is no better way to illustrate Chang's business strength than through a party, where a mixed bag of techies, suits, VCs, lawyers, and entrepreneurs all seemed to know the host on a first-name basis.

Forget Kevin Bacon's degrees of separation – in the optical industry, Chang spins a much tighter web. If you were at Incubic's offices Thursday night, you probably either:

    – Worked for or with Chang;
    – Were recruited by Chang;
    – Invested in one of Chang's startups;
    – Received investment money from Chang for your startup;
    – Or, may be on the path to one of the above and just don't know it yet.

Take Peter Clark, president and CEO of dynamic MEMS component vendor LightConnect Inc., a company Chang helped fund. Until last fall, Clark had no idea he was destined to lead a startup. As president and CEO of Hitachi Semiconductor America, he was "thinking about when I was going to retire." Then he met Chang at a fundraiser for CalTech, a school they both attended in the days of buggy whips and vacuum tubes.

"I sort of knew him in school, but we lost touch," Clark said. But after the chance meeting, Chang pestered Clark until the next thing Clark knew, he was leading a 44-person startup, which he says is well on its way to product launch (see LightConnect Comes Into Bloom).

Or take Chris Myatt, founder and CEO of Precision Photonics Corp., one of Incubic's startups. Myatt, who spent most of the Internet boom years working for the National Institute of Standards and Technology (NIST) in Boulder, Colo., had an idea and Chang's email address – and that's all it took for his company to get funding (see Precision Photonics Completes Round 1).

"There was a vetting process, of course, but since Milton knows everyone in the [Colorado] optical community, he was able to get information directly from our advisors," says Myatt, who is already talking to potential customers for his company's product. Though he wouldn't say what his company's product is, Myatt claimed to "have a prototype here in my pocket." This inspired some rude speculations.

Intel Corp. representatives were plentiful, because Intel Capital is one of the VC firms keeping a close relationship with Incubic. And Morgenthaler Ventures VC Drew Lanza kept tabs on the Intel guys, roaming the aisles of Incubic's offices sans his trademark bowtie.

There were also representatives from Mahi Networks Inc. (they came for the sushi) and Princeton Lightwave Inc. (PLI). And just to show he's no optical bigot, Chang also invested in storage-area network pioneer Gadzoox Networks Inc., whose representatives were also on hand.

In all, it was a pleasant evening at Incubic's Spartan quarters (think: spare glass-walled offices and one machine shop for grinding out prototypes).

Damn the depression, says Chang – it's a great time to be in a startup, as long as you have the right idea, the right people, the proper execution...

And the right connections.

- Paul Kapustka, Editor at Large, Light Reading

COMMENTS Add Comment
redface 12/4/2012 | 8:00:03 PM
re: Six Degrees of Milton Chang Milton Chang - G«£The optical startup wizardG«•. Some even call him G«£Jim Clark of OpticsG«•. Is he really? Does he possess a piercing eye for great technology and the uncanny ability to see things that others canG«÷t see?

G«£MiltonG«÷s legend is that he's never invested in a startup that failedG«•. It is not true. Milton provided seed funding for Laser Power Corporation. Because Laser Power Corporation performed poorly over a period of twenty years of its existense, Milton asked Laser Power to refund his initial investment, and he got the money back. So Milton did invest in this startup and it did not succeed. How many times Milton has done things like it and how did he tally these cases in his steller startup investment record?

Milton often boasts that he sits on the board of Arcturus Engineering, Euphonix, Iridex, Gadzoox Networks, LightConnect, Lightwave Electronics, and Optical Micro-Machines. However, If one checks the following link


a similar list pops up, but it is that of Professor David Bloom of Stanford University: G«£He (Bloom) is a successful entrepreneur himself, having been a founder of Lightwave Electronics, New Focus, Gadzoox Networks, Silicon Light Machines, as well as LIGHTCONNECTG«•.

Milton seemed to have followed David Bloom the well known professor everywhere around, from Lightwave Electronics, to New Focus, to Gadzoox Networks, to LightConnect. Maybe we can say that the investment record Milton is boasting belongs to David Bloom to a large extent. More surprisingly, New Focus is also on David BloomG«÷s list. David Bloom probably co-founded New Focus with Milton, got bored by the low tech optical table element stuff that New Focus was producing at the early 90G«÷s, and quit New Focus shortly thereafter. However, Milton got some bright students from Stanford as a result of BloomG«÷s involvement and he managed to sustain New Focus with the help of these technical talents until the telecom boom.

Milton himself has a PhD from Caltech. Yet his sense of curiosity as a scientist seemed to be totally lost. At New Focus and elsewhere, he does not even have the natural desire to look at new samples of the latest breakthrough. Rather, he prefer to have the technical people regurgitate to him.

In his startup investments, Milton was no different from the average VCs who back G«£peopleG«• (academic status) but not breakthrough technologies because they canG«÷t tell the difference; Milton is simply much better at this than the average VC.

Milton has become a legend as an angel investor. His record speaks for itself. As a result of his activism and shrewd self-promotion (his monthly celebrity interviews on Laser Focus World), he has been elected President of IEEE LEOS Society. Congratulations. It is a great accomplishment. But to create a religion out of it is disingenuous. Milton is not God. No one should pretend to be something he is not.

To end, maybe we should modify the last paragraph:

G«£Damn the depression, says Chang G«Ű it's a great time to be in a startup, as long as you have the right idea, the right people, the proper execution...

- And make sure you are a famous professor.G«•
Scott Raynovich 12/4/2012 | 7:59:57 PM
re: Six Degrees of Milton Chang Redface: So, your suggestion is that Uncle Milty should be in a lab coat at his startups, gluing pieces of fiber together? Seems kinda unrealistic. If I were him I'd definitely opt for the parties.
sceptical 12/4/2012 | 7:59:45 PM
re: Six Degrees of Milton Chang Whoa. Is "redface" really an insanely jealous David Bloom??? Milton Chang is surely not God, but he is equally surely not the opposite.

Whatever you might think of MC personally I would offer the following. In the dark ages of circa 1993 Milton was alone in his New Focus booth at CLEO pulling people off the Expo floor to hand out coffee mugs and sell six-packs of mirror mounts. Some 3 years later, with competition from any number of established companies, he had a 140 page catalog of optical equipment. If you don't belive that is an extraordinary achievement please try doing that yourself. I think it was shrewdness, huge numbers of contacts, and good business sense that turned New Focus towards the telecom area. In "the old days" I personally called Milton and he would actually return my calls. You could have done the same. In these days when nobody calls anybody back unless you have megabucks to offer in return I found that kind of extraordinary.
let-there-be-light 12/4/2012 | 7:59:44 PM
re: Six Degrees of Milton Chang I don't know any of these "great people" too well (in that list I certainly include Milton Chang, as well as people like John Roth, Vinod Khosla, Rich McGinn, etc. etc.), but isn't it interesting to see how we first put them on a pedestal and ascribe to them almost godly and visionary powers only later to discover that they are only human and make mistakes (hugely disappointing for us)? I think that is the point Redface was trying to make (at least I hope that was the point).

The only difference between "them" (the Gods) and "us" is that when they make mistakes, the results are much more disastrous than when we make mistakes.

Before I get flamed for calling Rich and John "great men", let me just say that in my book it takes something great to get up to that position, and that not too many of us have that gene in our make-up, obviously. We may not like what it takes to get there, but you can't have it both ways. I challenge anyone to fight or whatever his/her way up to lead a multi-billion dollar company and then not make any mistakes. Then you have my permission to judge others for being simply human.

On the other hand, I have to admit, it is sometimes a lot of fun to yell, "but, the emeperor really isn't wearing anything, is he?"
switchrus 12/4/2012 | 7:59:42 PM
re: Six Degrees of Milton Chang myresearch said:

The startup business is by its very nature
risky; only 2 of 10 can make it big in
good time...

Make it G«£BigG«• is a pet peeve of mine. How many VCG«÷s want to see only business plans for the next $100 Million dollar company ? Where are those after the base hits ?

Kind of reminds me of baseball and the slugger that bats only .150, yet hits homeruns when he gets a hit. Where are the VCG«÷s that are looking for companies that know the market that they are trying to hit, will turn a nice $10 Million a year in sales with $4 to $5 Million off the top? Yes in baseball parlance itG«÷s only a single, but itG«÷s part of winning the game. Seems to me a VC firm could raise itG«÷s average a bit by going for singles and base hits.
myresearch 12/4/2012 | 7:59:42 PM
re: Six Degrees of Milton Chang They are no god but they are still better
than the average folks out there.

The startup business is by its very nature
risky; only 2 of 10 can make it big in
good time. So the probability of making
mistake is always several times bigger than
not making mistakes. if you do not like
making mistakes, dont do it! But do not
blame your own mistakes on others.
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