In Need of Air

Lessons from Air Semiconductor, 2005 to 2010

David Tester
Founder, Air
 In Need of Air
Lessons from Air Semiconductor, 2005 to 2010

Ten Lessons from Air

(…with more lessons I’m happy to share privately)
Lesson #1 Figure out the ‘Big Vision’ and then just get started!
#2 Include additional ‘launch’ market in the go-to-market strategy
#3 Take the time to build a strong team … quality people are essential
#4 Get an early adopter ‘architecture license’ customer
#5 Just accept it will take 4 years to create initial (system level) product
#6 Spend every $1 as if it’s the last $1 … and get used to that experience
#7 Be sure some early customers can be referenced by investors
#8 ‘Stealth Mode’ is a myth … your investor pitch will go to competitors
#9 Your founder peers will share their experiences with you, so just ask…
#10 You will quickly get used to the start-up fear, uncertainty and chaos!

Air Founder Blog ‘In Need of Air’: http://blog.ex-air.co.uk/

Air Website: http://www.ex-air.co.uk/air_website/index.html
Air History: http://www.crunchbase.com/company/air-semiconductor/
Email: david.tester@structured-custom.com Tel: +44 7958 052933
Sell Tesco’s car park to Sainsbury’s

Car park
Special offers at
Sainsbury’s today!

Press # for directions

1_.@ 3
DEF
2ABC
Location
4GHI targeted
6 advertising is only possible with
MNO
5
7
‘Always-ON’
PQRS
JKL

9
positioning in mobile phones
WXYZ
8TUV
#
* 0+
 ‘Always-ON’ GPS
The Key to Proactive Location Based Services

Nokia 6233 Motorola RAZR V3i Samsung E900 SEMC K610im LG KG800 Chocolate BenQ-Siemens SL91

Minimum standby Minimum standby Minimum standby Minimum standby Minimum standby Minimum standby
current: current: current: current: current: current:
2.1 mA 2.4 mA 3.6 mA 2.6 mA 4.0 mA 3.1 mA
Average current*: Average current*: Average current*: Average current*: Average current*: Average current*:
7.3 mA 7.8 mA 8.3 mA 9.4 mA 8.3 mA 9.9 mA
* Current draw based on “average” use assuming battery recharge once every 4 days

How often does phone battery needs to be recharged if GPS active?

GPS must be limited to 1-2mA (or 10% of phone power)

Consumers need almost-instant response; push-to-fix delay of 1 second

Must maintain awareness of location since GPS does not work indoors !
 Initial Market: Digital Camera Market and Geotagging

GPS enabled DSC's DSC shipments

160 M 164 M
150 M 155 M
146 M

62 M
38 M
22 M
9M

2008 2009 2010 2011 2012

GPS modules developed by DSC partners

 GPS 101
Receive Power is -130dBm to -160dBm … 20dB to 50dB below the Thermal Noise Floor!

Earth radius 86 k
m
35,7
6,378 km

km Geo-stationary
100
19, Regional geo-stationary
augmentation satellites

0 km
20,20 WAAS
Wide Area Augmentation System – USA

EGNOS
23,222 km European Geostationary Navigation Overlay
System – Europe

GPS
6 orbital planes; 55° to equator Galileo
Moon
Galileo Approx. 400,000 km
3 orbital planes; 56° to equator

GLONASS
GPS
3 orbital planes; 65° to equator Orbit 11 hours 58 minutes
13,900 km/h

GLONASS
 The Air Team
David Tester Hugh Thomas
Founder & CTO CEO

Steve Graham Andy Heaton Hank Izumi

Co-Founder & VP Marketing VP Operations VP Sales Asia

RFIC Design System Design ASIC Design Software Design

Staff Staff Staff Staff
Employee #1 (20 years experience) Employee #3 (20 years experience) Employee #4 (10 years experience) Employee #7 (20 years experience)
Employee #2 (20 years experience) Employee #1 (20 years experience) Employee #5 (15 years experience) Employee #8 (15 years experience)
Employee #6 (15 years experience)

Contract Contract Contract

Contract #1 (15 years experience) Contract #3 (20 years experience) Contract #8 (20 years experience)
Contract #2 (15 years experience) Contract #4 (20 years experience) Contract #9 (15 years experience)
Contract #5 (20 years experience)
2x Synopsys IC layout contractors

Board of Directors Support Staff

Hugh Thomas CEO ex-CEO TapRoot 1x General Admin
David Tester CTO 1x Finance Manager
ex-CEO Andromedia (acquired Macromedia ‘99)
Kent Godfrey Pond Ventures
ex-CEO Frictionless Commerce (acquired SAP ‘06)
Michael Gera Pond Ventures
ex-CEO PortalPlayer (NASDAQ: PLAY)
Gary Johnson Independent ex-CEO S3 (NASDAQ: SIII)
Initial Idea (in 2005) to Prototype Silicon (in 2009)
Dual-Mode GPS
system design
SPECIFICATION
Dual-Mode GPS COMPLIANT
software design GPS RECEIVER

Acquisition DSP $1M Bridge Finance

Tracking DSP Architecture September ‘08
Architecture $1M Bridge Finance
Tracking DSP June ‘09
Tracking DSP Implementation
Implementation $1M Bridge Finance
Acquisition DSP February ‘09
Implementation

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

Radio IC Radio IC A1250

A1250 silicon evaluation
Implementation Implementation IC design
Tracking DSP Air tracks GPS satellites with RFIC
Architecture March ‘08

PVT & RFIC + FGPA platform

First VC Meeting… Kalman Filter May ‘08
February ‘06
Air tracks GPS satellites with RFIC + FPGA
A1225 RFIC (v1) June ‘08

$1.25M Series-A1 Termsheet April ‘07 Air first PVT, confirms lab in Swindon
September ‘06 June ‘08
A1225 RFIC (v2)
A1250 single die GPS receiver
February ‘08
January ‘09

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

2006 2007 2008 2009

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

Electra Start-Up of the Year 2008

November ‘08
Gary Johnson joins Board of Directors
2x NASDAQ CEO (PortalPlayer & S3) IET Start-Up of the Year 2008
May ‘07 November '08

Prof Izzet Kale joins Technical Advisory Board

October ‘08
Engage with TSMC for silicon
Sept ‘06
Demonstrate GPS technology
July ‘08
Development starts!
June ‘06
Recruit external CEO Sell Air Patent Portfolio to u-blox
May ‘08 February ‘10
Air Inc + Ltd incorporated
May ‘06 Red Herring 100 Europe 2008
April ‘08
$1.75M Series-A Termsheet $3.8M Series-A2 Termsheet
April ‘06 November ‘07 Exit stealth mode
Announce 1st product
January ‘08
airwave1 system development platform
and prototype sample silicon module
Air Technical Demonstration Platform … in Japan
Air Technical Demonstration Platform … in USA
GPS with airwave1 silicon
 Prototype Product Performance
Unfiltered CEP50 position accuracy is 2.8 metres
CEP50 position accuracy with Kalman Filter <2 metres
Push-to-Fix TTF @ -130dBm: 2.5s
Push-to-Fix TTF @ -150dBm: 2.5s
(Future push-to-fix TTF could be <1s)

Unaided cold start: -140dBm

Unaided hot start -150dBm
(Future hot start sensitivity -154dBm)

Tracking sensitivity: -152dBm

(Future tracking sensitivity -160dBm)

Plot shows 20m (x axis) by 20m (z axis)

Positions grouped into 20cm x 20cm bins
Stationary receiver over 12 hour period
Air Prototype SOC GPS Receiver Performance
Exceeds ‘Push-to-Fix’ Requirements for LBS Market
Air Prototype SOC GPS Receiver Performance
Lowest Power, Lowest Die Area GPS Radio (2.1mm2 10.7mW)
 Monthly Burn ($K)

$100
$150
$250
$300
$350
$400
$450
$500
$550
$600

$200

$50

$0
Jun…
Jul…
Aug…
Sep…
Oct…
Nov…

2006
Dec…
Jan…
Feb…
Mar…
Apr…
May…
Jun…
Jul…
Aug…
Sep…

2007
Oct…
Nov…
Dec…
Jan…

Monthly Burn $K
Feb…
Mar…
Apr…
May…
Jun…
Jul…
2008

Aug…
Sep…
Total Burn $M

Oct…
Nov…
Dec…
Jan…
Feb…
Mar…
Apr…
May…
2009

Jun…
Air Operating Costs - 2005 to 2010

Jul…
Aug…
Sep…
$0
$1
$2
$4
$5
$6
$7
$8
$9

$3
$10
$11

Total Burn ($M)

Customer Status: 174 Active Customer Leads
Markets:
Camera, Cellphone, Laptop PC, Netbook, Digital Watch, Asset Tracking
37 active leads generated proactively by Air
Including: Ability; Apple; Canon; Casio; DoCoMo; Foxconn; Fujifilm; LG; NEC; Nikon;
Nokia; Olympus; Panasonic; Pentax; Ricoh; Samsung Electronics; Samsung Techwin;
Sanyo Digital Imaging; Sony Ericsson; Softbank; Sony
20 active leads from VC introductions
Including: Google; Motorola; O2; Spreadtrum; Swatch; Vodafone
117 unsolicited enquiries resulting from PR activity
Including: Mediatek; Microsoft; RIM; Altek; Fujitsu; Hitachi; HTC; Mitac; Compal
Proactive

VC Introductions
Unsolicited enquiries
CSR / SiRF follow Air Semiconductor ‘Always-ON’
 In Need of Air
Lessons from Air Semiconductor, 2005 to 2010

Ten Lessons from Air

(…with more lessons I’m happy to share privately)
Lesson #1 Figure out the ‘Big Vision’ and then just get started!
#2 Include additional ‘launch’ market in the go-to-market strategy
#3 Take the time to build a strong team … quality people are essential
#4 Get an early adopter ‘architecture license’ customer
#5 Just accept it will take 4 years to create initial (system level) product
#6 Spend every $1 as if it’s the last $1 … and get used to that experience
#7 Be sure some early customers can be referenced by investors
#8 ‘Stealth Mode’ is a myth … your investor pitch will go to competitors
#9 Your founder peers will share their experiences with you, so just ask…
#10 You will quickly get used to the start-up fear, uncertainty and chaos!

Air Founder Blog ‘In Need of Air’: http://blog.ex-air.co.uk/

Air Website: http://www.ex-air.co.uk/air_website/index.html
Air History: http://www.crunchbase.com/company/air-semiconductor/
Email: david.tester@structured-custom.com Tel: +44 7958 052933