UCSD CONNECT Investor's Hub

December 12, 2004

In 1982, Naser Partovi, who had just earned a Master's Degree in electrical engineering from McGill University, was offered an engineering job at Hewlett Packard Co. in San Diego. He turned it down because, at the time, there weren't other job openings to pursue in San Diego if he discovered HP was not a good fit. San Diego's job-hopping opportunities in technology have certainly grown since then. "Looking back at what San Diego was 20 years ago, it's amazing the transformation that has happened," Partovi says. "It's a lot more attractive today, thanks to companies like Qualcomm and AMCC. We have two of the top semiconductor companies in the world here. We have the largest concentration of wireless companies, we have the top quality service providers it takes to build companies, and we have real entrepreneurs."

Partovi is most excited about the increased investing opportunities in San Diego's burgeoning networking space. San Diego, he points out, has one of the largest talent pools in the nation, along with a robust infrastructure to support a strong and successful wireless industry. "I want to help grow that by helping build companies here," he says. "That's part of our job as investors and we take that very seriously. I am very positive about San Diego's future in this area. We finally have enough mass to build upon."

Naser first came to San Diego in 1996 to head up Nortel's Professional Services Group, SpectraLink, which he ran for a year-and-a-half. He later became the vice president of strategy and business development for Nortel's optical networks business. Before his stint at Nortel, Partovi spent time at Northern Telecom in Canada.

Partovi's knack for engineering began at age 11 in Iran, when he built his first soapbox radio. "I was really interested in engineering and tinkering with electronics," says Partovi, who ended up in boarding school in England during high school after both parents passed away. He decided to enhance his "tinkering" skills by attending McGill University, one of the top engineering schools on the East Coast. Partovi, who had to support himself, also chose McGill because he had a full academic scholarship. To satisfy his mother's wishes of becoming a doctor, Partovi also studied biomedical engineering. While conducting his Ph.D. research, one of his supervisors asked him to do some artificial intelligence work for Nortel on transmitting graphics from one place to another. "That was a very exciting time in AI because we wanted to understand every aspect of how the human mind and eyes work," says Partovi, who was lured into the AI world and didn't finish his Ph.D. "Twenty years later they are able to build cameras and take people who have become blind and connect to their brain so they can see fuzzy pictures. We're making progress but it's a lot slower than we thought."

When asked if the same could be said about the telecom industry, Partovi is quick to point out that this nascent industry has certainly come a long way, despite several technology and market glitches. He says picking the right technology has everything to do with listening to and examining the market. He points to creators and proponents of 3G, who have tried to solve data networking problems using telephone networks, and consequently spent hundreds and millions of dollars in buying spectrum and equipment to push the promise of third-generation wireless technology. That exuberance and hype, Partovi says, led to the burst of the telecom bubble. "I'm not a big believer in 3G because there are other technologies that will take over 3G," he says. "I think it's too late for 3G to capture what it had promised. There are other technologies, such as WiFi or 802.11 that can fulfill that promise."

Partovi is a believer in WiMAX, a relatively new high-speed wireless access technology. WiMAX is a standards-based wireless technology that provides high-throughput broadband connections over long distances. WiMAX can be used for various applications, including "last-mile" broadband connections, hotspot and cellular backhaul, and high-speed enterprise connectivity for businesses. "WiMAX will change the way we will be running cellular networks," Partovi says. "Some people will agree with me and some will disagree with me."

Partovi describes WiMAX as a disruptive and life-changing technology. "Those are the kinds of technologies we look for at the venture investing level - those that are coming to change the game," he says.

The successes in telecom, Partovi admits, are far and few between. One can't expect to come up with a completely different technology every day, he says. "You expect that if you can come across one of those every year, you're very lucky." Partovi thinks he has come across one this year - a company called Quorum Systems, Inc., a San Diego chip maker that has developed a technology that supports GSM voice calls and WLAN Internet connections simultaneously using a single radio device. The technology will allow manufacturers to build handsets that are compatible with any wireless standard, including GSM, WiFi and Bluetooth. "The biggest part of this is finding the right technical minds to go and dig deep to make sure this kind of breakthrough technology is going to work," says Partovi, who sits on the boards of several telecom start-ups - including Quorum - as well as the San Diego Telecom Council and the La Jolla Music Society.

Partovi says that while there are a lot of breakthroughs in this industry, making them work while controlling costs is difficult. A lot of breakthrough technologies die because they are too early for the market, he says. "You have to understand if the market is ready to accept this technology," Partovi says. "If the market is not there and you can't do something else to keep your company going, then get out."

As a venture capitalist, Partovi also pays attention to the all-important management team of the wireless start-ups that come knocking on his door. "Most entrepreneurs have a Type A personality so they sometimes clash," he says. "That's why we pay a lot of attention to the chemistry of the management." Before going to the "dark side" - what most entrepreneurs call investing - Partovi made sure he was in sync with the other partners at Enterprise. Partovi, who had already known Enterprise founding director Bill Stensrud, jumped sides because he was bit by the start-up bug. "The more I interfaced with start-up companies, the more I found it exciting to be able to work with them and help them," says Partovi, who launched several new businesses within Nortel. "I admire companies like Nortel because you can use them as a laboratory for learning a lot of skills. But the biggest problem at a big company is, as an executive, you become very frustrated with how much time you spend in meetings and how much of your time is spent looking inward instead of outward."

One piece of advice Partovi likes to give entrepreneurs is to build a toolbox of skills sets that they can take with them wherever they go. "You have to look inside yourself to find out what you enjoy doing the most," he says. "Build a toolbox where you can do much bigger things. I never dreamed of becoming a venture capitalist. But by building the tools, this has come upon me. It has worked very, very well for me and I have been extremely lucky along the way."