These days, Intel Capital also has a new face to go along with its more conservative approach. In April, longtime Intel executive John Miner took over the reins from Les Vadasz, an Intel cofounder who started Intel Capital in 1991 and steered it until his retirement. Around Silicon Valley, Vadasz is revered as a key contributor to some of the industry’s most important products, like the first microprocessor. Miner, on the other hand, is less well known. He grew up on the Gulf Coast of Mississippi, worked his way through Tulane as an engineering technician and actually got rejected from Intel when he first applied for a job in the early 1970s. (He later caught on as a salesman in Houston.)
Twenty years later, Miner has one of the highest-profile jobs in the Valley. He sat down to talk with NEWSWEEK’s Brad Stone about where Intel is spending its money, whether that’s a bellwether and why he’s optimistic about the high-tech economy.
Stone: Was there ever a moment during the downturn when Intel questioned the wisdom of being in the VC business?
Miner: No. It’s very much like the strong belief at the company that you don’t save your way through a recession. Intel Capital is part of all our new product plans. Our dependence on external innovation hasn’t changed. We make chips, and for those chips to be useful to buyers, there need to be other ingredients. Intel Capital’s role is to make sure innovation is sponsored.
What new technology most excites you?
One is WiMax, a new wireless technology standard. Think of it as an extension of Wi-Fi. Wi-Fi is good for about 100 meters of distance, in a cafe or your home. WiMax is good for 30 miles… It’s very inexpensive to deploy. And since you can achieve significantly higher data rates than you can over the current wires, a richer set of services can be provided, such as video. Intel will have WiMax-enabled silicon chips for our customers in 2004, and we expect to see companies deploying WiMax more broadly in ‘05.
What other wireless technologies interest you?
In Korea, you can download 30 minutes of news video onto your PDA or cell phone. You can watch soccer games. You can have interactive games and high-quality graphics. So we’re trying to help that grow. We invested in a Los Angeles company called Jamdat, which makes games for cell phones. Another company, Action Engine, makes software for handheld devices, so even if your connection to the network is slow or intermittent, you can still work with your corporate data or any other application on your device.
What about technologies for the home?
We invested in one company called Digital 5 that makes DVD players with IP network connections, either Wi-Fi or Ethernet. So you can connect your PC, with whatever photos or video you have stored on it, to your television.
Is there one start-up that’s really captured your imagination?
I just saw a company delivering broadcast-quality video, radio and data to mobile devices. Think about that–getting that wireless feed on your PDA or cell phone, no matter where you are, even if you’re driving. But I can’t name the company.
How has the venture-investment process changed over the past few years?
The valuations of the companies which were highly inflated in the 1999 time frame have returned to more reasonable valuations. That impacts the amount of dollars we invest. We did get concerned that the rate of new investments and company formation was getting so low that the external innovation we depend on would be insufficient. That concern peaked over the first half of this year. But the VCs I’m talking to are indicating they believe the rate of new investment is beginning to return to a healthy clip. I think an indicator of that is the fact that this year a higher percentage of our investments are in new companies, as opposed to follow-up investments in companies we’ve invested in before.
So you’re starting to see healthy economic signs?
I hope so. What’s important is we go back to a positive growth rate in the formation of new companies. It looks like we’re starting to get there… You see the stock market start to go up, and people see opportunities for IPOs.
How important is it to provide a positive return on your investments to your bosses?
It’s important. I think they’ve come to understand that venture investing is going to ride the currents of the economy to some degree. Over 10 years, we’ve returned to the company billions of dollars in cash, enough to build a new chip-fabrication plant.
But in the bad years, enough to put a bruise in the bottom line?
Correct. It’s like your personal stock portfolio, but in our case we have to present it to our stockholders.
