Funding for startups

Transpectrum Flunks Out

The heyday of the "research-product turned optical-startup" may be coming to an end. Los Angeles startup Transpectrum is the latest such operation to shut its doors, shelving its ambitious plans for 10- and 40-Gbit/s transceivers.

Founder Behzad Razavi confirmed that the company has shut down but wouldn't say why -- although a good guess might be a lack of faith from investors, considering the dim short-term prospects for new optical networking technologies. Razavi wouldn't comment on who had funded Transpectrum, and the company's Website doesn't mention any venture backing.

Transpectrum was born of Razavi's research at UCLA, where he is a professor of electrical engineering, specializing in high-speed analog circuits.

"It was not a good experience, that's for sure. I don't think I would want to do it again," he tells Light Reading.

A little late to the party, Transpectrum launched in March 2002 with promises of a 40-Gbit/s transceiver -- sporting four lanes of 10 Gbit/s apiece -- by the third quarter of this year (see Transpectrum Demos Transceiver). The company's specialty was in semiconductor process technology -- the ability to coax fast and clean electrical signals through complementary metal-oxide silicon (CMOS).

That's important because CMOS is an inexpensive and well-understood semiconductor technology. Many high-speed components have to be built of more exotic materials such as indium phosphide or silicon germanium. In those cases, manufacturing is more difficult, harder to find, and more expensive. Moreover, CMOS devices can be merged onto a single chip, offering the promise of future cost and power savings.

But ambitious high-end technology has a tough time finding a home in this market. The short-term prospects for such products are weak at best. And by the time demand recovers, any product may have lost its usefulness, either because market requirements have changed or because a competing technology has advanced.

Vitesse Semiconductor Corp. (Nasdaq: VTSS) used that logic earlier this year to axe several high-end projects, including 10-Gbit/s packet-processing chips (see Vitesse Drops Some Packets). Vitesse CEO Louis Tomasetta reiterated his reasons on yesterday's earnings call with analysts, noting that by the time the market recovers, any high-end products designed today would likely be obsolete or irrelevant.

Could Transpectrum have pulled it off? We'll never know. Plenty of ideas -- both deserving and undeserving -- are being dragged down in the telecom collapse, and even those that resurface may find themselves strangers in a brutally changed industry. In fact, the end of the bubble appears to be driving more scientists away from Wall Street and back to the lab -- which may not be such a bad thing (see ECOC: Back to the Lab)

— Craig Matsumoto, Senior Editor, Light Reading

opticalwatcher 12/4/2012 | 9:29:56 PM
re: Transpectrum Flunks Out Didn't Cisco start out as research project at Stanford?
BobbyMax 12/4/2012 | 9:29:49 PM
re: Transpectrum Flunks Out It is hard to think Transpectrum would start in March 2002 at a time when a lot of optical start-ups were closing. It was very clear at that there is not much need for optical networking products.
gea 12/4/2012 | 9:29:47 PM
re: Transpectrum Flunks Out Hummm Booby...are you suggesting this is another move in the big VC/Indian/alien conspiracy to defraud the people of earth? Perhaps you should go and investigate...
Dr_phill_SoHn 12/4/2012 | 9:29:46 PM
re: Transpectrum Flunks Out Hello,

Being the battle hardened veteran of two failed optical startups, I would like to say a few words. I think the core failure mode of any startup is in the leadership. Specifically the founders. Most of the failed startups are founded by academics who have some pet esoteric technology they think is going to rule the world if only they can pull the wool over some VCs head and a few million to make thier widget.

The life cycle of the company is as follows:

1) Genuis founders from academia "invent" technology and get thier "IP."

2) VCs think WOW this is amazing stuff, who would of thunk it? Millions pour in.

3) Company proceeds to be run like a university research project with no discernable milestones or basic engineering procedures.

4) Technology will only work if everything is running on a razor thin margin. (This means it is not really manufacturable or doesn't really work.This is the reason the technolgy was not deployed 10 years ago when it was first discovered.)

5) Founders find that thier IP was in the scientic literature 10 to 20 years ago or is in Chapter five of some university text book. (This is kept quite of course.)

6) Startup slogs on, burn rate flares, the runway shortens, layoffs or executed clumsily, fingers point, non believers are torched.

7 ) The doors close.

Yes the economy had a part to play but most of these companies should never have gone past the power point stage.

Yes Cisco was successfull and was started by Stanford researchers, but. They really did have a good idea that had been essentially been developed using Stanford Univsitys massive resources of many years. The company was also initially run out of a house by one guy who did know what he was doing technically. Then it was completely taken over by real businessmen who knew how to run a company and the founders were booted. If the founders would have stayed Cisco would have failed because it would not have made that key transformation into a business for profit.

So do not blame Transpectrum it did not know any better. The VCs should have squashed it early on. March 2002, surley you must be joking ???

Dr Phill, SoHn
sr5367 12/4/2012 | 9:29:38 PM
re: Transpectrum Flunks Out LR seems to have goofed up. Their March 11, 2002 press release says they were founded in March 2001.
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