Ruth Ann S. Basnillo                                                                                                                               6/26/2008

SYSANAL

O0A

Mike Ramsay

Cofounder, TiVo

Story:

            TiVo was founded in 1997 by Mike Ramsay and Jim Barton after they left SGI. Initially, Ramsay was educated and had a factory in Scotland. Britain was in bad shape in the mid-‘70s but he had a great career with HP, so he decided to move on to US to pursue his career. For some reasons, he left HP in the early ‘80s to start a company called Convergent Technologies wherein the idea of Convergent was to build a workstation. Ramsay had a couple of stints at HP and it was on the second stint that he met up with Jim to build a team inside the company hiring some very talented people inside. After a year or so, he ended up his big company thing after having been recruited at SGI. When he decided to join, he told it to Tom Jermoluk and Jim and some others, and many HP employees went out of the company. Soon, they wanted to startup their own company with Ramsay’s idea and went to different venture firms. Only two people invested on them. They were Steward Alsop of NEA who got fascinated with their idea of Space, and Geoff Yang of Redpoint who looks for companies trying to push the envelope and do something radically different. Originally, their plan was to create a network server for homes but they realized that they can’t do everything, so they decided to narrow the idea down to one application of the original plan Digital Video Recorder (DVR). They then hired very creative people and six months after having started, they were able to have a good-sized team of people with different specializations. Ramsay thought of having bright people attracted to cool technologies like theirs as a threat. That’s why they decided to start a consumer company that would do very simple function that’s got to work with a remote control. The idea worked well and they were able to hire some bright guys from other companies. TiVo became ground-breaking in that it let consumers manipulate their television through the idea of simultaneous record and playback, pause, and past-forward. Moreover, they were able to harness program guide data to drive the function by the machine. But the idea of pausing a live TV was really the one that made it a hit. They get ther first and second round of funding from their initial VCs and they got Paul Allen fromVulcan for the third round. They had an IPO and got a $200 million invested from AOL. During the time, they hired David Courtney as their CFO who helped them got through their IPO. TiVo was launched and went public at the end of March 1999 which they called Blue Moon Event. By August or September, they had sold about 12,000 units and they had their IPO done in September of 1999. The company’s valuation actually went up to billions of dollars. They did a deal with Sony and DIRECTV wherein they started supplying DIRECTV with TiVos. Now, the thing has a got a life of its own and people loved it and started getting great feedbacks. Ramsay stepped down as CEO in 2003, but remained as chairman.                                              

THREE THINGS I LEARNED:

            I learned a lot from how TiVo was founded. First, I learned that when you wanted to do a startup, you have to have self- confidence that everything you’ll do will lead towards the success of your startup. You have to have the spirit and belief that nothing is impossible as long as you take courage to do something. You have to take risks and be open to being burned because sometimes, you’ll realize that it’s not fatal.

            Next, I learned that if you know that there are no opportunities in the place where you belong, you need to take risks in some other places and don’t just stay in a place that’s completely messed up. Mike Ramsay, when his place was in a very bad shape went to United States and worked there. And look at him now; he learned that it takes self confidence and risk- averse to be able to have a successful startup.

            Lastly, I learned that competitors are also one important part of a business. They would dictate how strong or how weak your companies are to such big threats such as them. And you’ll never know, you’re already learning from them strategies that would help your company stabilize.