{"id":1094,"date":"2022-03-08T16:25:40","date_gmt":"2022-03-08T16:25:40","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/03\/08\/the-future-of-computers-is-only-4-away-with-raspberry-pi-ceo-eben-upton\/"},"modified":"2022-03-08T16:25:41","modified_gmt":"2022-03-08T16:25:41","slug":"the-future-of-computers-is-only-4-away-with-raspberry-pi-ceo-eben-upton","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/03\/08\/the-future-of-computers-is-only-4-away-with-raspberry-pi-ceo-eben-upton\/","title":{"rendered":"The future of computers is only $4 away, with Raspberry Pi CEO Eben Upton"},"content":{"rendered":"<p>Source: <a href=\"https:\/\/www.theverge.com\/22966155\/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy\">https:\/\/www.theverge.com\/22966155\/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy<\/a><br \/>\n<code><br \/><\/br><\/code><\/p>\n<div readability=\"1069.268048382\">\n<p class=\"p--has-dropcap p-large-text\" id=\"yLZj0S\">Today I\u2019m talking to Eben Upton, the CEO of Raspberry Pi, a fascinating company that makes beloved tiny hackable computers that are extremely inexpensive: the cheapest Raspberry Pi is just $4, the most popular model is about $35, and the most expensive model that comes with a keyboard is $70. They run Linux, and you can do just about anything with them: people build robots, they learn to code, they run media servers. There are Raspberry Pis on the international space station running experiments. I have one in my house that just connects a bunch of smart home gear together. These things are a phenomenon, and a underappreciated part of the computing world we live in today.<\/p>\n<p id=\"rVxfw8\">They\u2019re also some of the only readily available computers that are designed to be tinkered with \u2014 unlike a smartphone or even really modern desktops, they\u2019re not heavily locked down, and using one requires learning how a computer actually works. And that\u2019s the entire point: Eben told me the idea of the Raspberry Pi was to create a product that enticed kids into studying computer science at the University of Cambridge, where he used to work. Just like the Commodore 64 or the Apple IIe taught a generation of kids how to tinker with computers, Eben wanted to give people an open computer that rewarded experimentation. The goal was simply to sell enough to increase the number of CS applicants by \u2014 this is true \u2014 100 students. <\/p>\n<p id=\"xPnx7U\">They\u2019ve achieved that goal. Seven million Raspberry Pi units were sold last year, and there\u2019s talk of the company going public. <\/p>\n<p id=\"60eRik\">Eben and I talked about all of that. This was a good one. <\/p>\n<p id=\"3mi8K3\"><em>This transcript has been lightly edited for clarity.<\/em><\/p>\n<p id=\"obVw5O\"><strong>Eben Upton is the CEO of Raspberry Pi and the co-founder of the Raspberry Pi Foundation. Welcome to <\/strong><em><strong>Decoder<\/strong><\/em><strong>.<\/strong><\/p>\n<p id=\"gsRwE0\">Good to be here.<\/p>\n<p id=\"zO6mys\"><strong>I am very excited to talk to you. I love meeting executives from companies with products that are ubiquitous, but maybe not as explored. Raspberry Pi is one of those with a long and super interesting backstory.<\/strong><\/p>\n<p id=\"HQk0f1\">It\u2019s strange. You say it\u2019s a long backstory; it really is a long backstory now. The foundation was incorporated right at the tail end of 2008. Then we had this very long and private prototyping cycle \u2014 knowing the sort of thing we wanted to build, but not knowing in detail what it was that we were going to build, or what it was that the market was going to accept. Even the public part of Raspberry Pi is now over 10 years old: we just celebrated the 10th anniversary of taking our first order on the 29th of February, 2012. We\u2019ve had two birthdays so far \u2014 and a bunch of pseudo-birthdays.<\/p>\n<p id=\"c0QG24\"><strong>Let\u2019s set up the very basics. We have a lot of listeners: I feel like there\u2019s a category of people who intimately know everything about Raspberry Pis, and there\u2019s a category of people who have no idea what we\u2019re talking about. What is a Raspberry Pi?<\/strong><\/p>\n<p id=\"iVWeWQ\">At its simplest, a Raspberry Pi is an almost exactly credit card-sized, single board computer. It\u2019s an object [made of] green PCB [printed circuit board]. You plug a mobile phone power supply into it, you put an SD card in it with an operating system, plug it into your television, and you have a PC. We\u2019ve made a number of different iterations of the Raspberry Pi over the years, but they all answered to that basic description.<\/p>\n<p id=\"JEn7Ln\"><strong>That foundation started in 2008, and then you had a long cycle of trying to figure out what to build. Why did you start as a foundation? That\u2019s a very unique piece of this puzzle.<\/strong><\/p>\n<div class=\"c-float-right c-float-hang\">\n<aside id=\"2vrHno\"><q>\u201cWe were trying to solve a social problem with Raspberry Pi.\u201d<\/q><\/aside>\n<\/div>\n<p id=\"5dTN6D\">We were trying to solve a social problem with Raspberry Pi. Most of us who were involved at the start were in one way or another involved with the university here in Cambridge. Cambridge is one of the homes of computing, it\u2019s one of the places that has a claim. I\u2019m actually sitting in a building called the Maurice Wilkes building here on the outskirts of Cambridge. In the late 1940s, Maurice Wilkes was a professor at the university. He built a machine called EDSAC, which is one of about 10 machines in the world to have a claim one way or another to be the first computer. Everyone has their own definition of \u201cfirst computer\u201d that allows their institution\u2019s computer to be the first. EDSAC was the first computer to be used by someone other than the people who made it.<\/p>\n<p id=\"bxn2Bn\">EDSAC provided services to other physical sciences departments in the university. Some of the X-ray crystallography work around the discovery of the structure of DNA \u2014 the computation for that was done using EDSAC. Cambridge is an amazing place to study computing, and we were struggling a decade, 15 years, ago; we were struggling to persuade schoolchildren that they wanted to come here to study computer science. The social mission that Raspberry Pi has always had has been to get young people excited about it again, because I think there was an era back in the \u201980s and \u201990s when young people weren\u2019t excited about computers. <\/p>\n<p id=\"uDTO1k\">It\u2019s always been about building a piece of hardware. The idea was there\u2019s a missing piece of hardware that corresponds to those Commodore 64 and Trash-80 machines of our childhoods. Why a foundation? We were trying to accomplish a social good, so a socially structured organization seemed to make more sense to us than a purely for-profit one.<\/p>\n<p id=\"ucsPqv\"><strong>Let\u2019s unpack that: if you walked around any other social benefit organization or went to any conference over the past 20 years, the drumbeat of \u201cSTEM education is important\u201d was overwhelmingly loud. Obviously we have a self-selected audience: they are very interested in computers. Right now we\u2019re going through a boom of people being interested in coding. We just interviewed <\/strong><a href=\"https:\/\/www.theverge.com\/22910624\/career-karma-ceo-ruben-harris-interview-startup-tech-linkedin-decoder\"><strong>Ruben Harris from Career Karma<\/strong><\/a><strong>, a company that matches people to coding boot camps. What do you mean specifically by trying to get people interested in computer science? <\/strong><\/p>\n<p id=\"0faHkq\">That drumbeat has become a lot louder for a variety of reasons in the last 20 years. When we started this, it wasn\u2019t particularly loud at all; it was not long after the dotcom crash. I remember applying for some government funding for an early iteration of Raspberry Pi and receiving a letter from the government that had the mortal sentence \u2014 something along the lines of, \u201cDemand for computer programmers has declined recently and is not expected to recover.\u201d There was a pervasive attitude that computing was yesterday\u2019s fad \u2014 that there had been a 10, 15, 20, 30-year fad, and that we were now out of the end of it. The dotcom crash marked the end of an obsession with computer programming as a thing that significant numbers of people should do.<\/p>\n<p id=\"gsiW2p\">I think there has been a revival elsewhere \u2014 a non-Raspberry Pi-related revival and enthusiasm for computing. That\u2019s actually been wonderful for us. Rather than feeling like a voice in the wilderness at the start, we\u2019ve ended up feeling that we\u2019re part of a community of after-school clubs and coding camps and online material that\u2019s trying to solve the same problem. The very narrow problem we were trying to solve was: how many people are applying to study computer science at the University of Cambridge? It used to be 600. Now it\u2019s 200. We want to admit 100 people to the University of Cambridge. We do not want to have two to one applicant ratios. That\u2019s not how Cambridge works. We want to be besieged \u2014 we never got to the point where we admitted anyone who wasn\u2019t clever, but we got to a point where we admitted pretty much everyone who was clever. You want to be in that position of being able to be very discriminating. We had seen this decline and we wanted to make the numbers go back up again. Raspberry Pis have been all sorts of places\u2014<\/p>\n<p id=\"hKjweK\"><strong>You\u2019re on the space station.<\/strong><\/p>\n<p id=\"XiWy6i\">Yeah, the space station. The ridiculous thing about the ones on the space station \u2014 we\u2019ve had two up there since about 2015. The weird thing about the ones on the station is that there are also many other Raspberry Pis on the station that are not our Raspberry Pis. They\u2019re great little computers running payloads. They\u2019re obviously flight qualified. We have no idea how many there are on the station.<\/p>\n<p id=\"xj0yRn\">Usually when they downmass the payload, somebody will mail us and say, \u201cHey, I just had a Pi on the station for two years.\u201d They end up everywhere, but the origins of this are so thin and parochial, and about tuning a number by 100 people. Let\u2019s say we make 1,000 Raspberry Pis in 2011 that we get out to 1,000 kids, and 100 of those kids apply to the university. That is a 50 percent increase in the applicant pool, and that will allow us to be more discriminating. Such a parochial little ambition.<\/p>\n<p id=\"qWirbk\"><strong>That is amazing. I want to hone in on the fact that you said that you needed to make a piece of hardware, because from my perspective, <\/strong><em><strong>Decoder <\/strong><\/em><strong>covers a lot of consumer tech products. I talk about them all day long. You mentioned the Commodore 64, the Trash-80, the TRS-80. I would put the Apple IIE in that list. These are all the computers I grew up with \u2014 the guts of the computer were completely exposed to you and you could reprogram them at will. I remember the first video game I got from my Commodore 64: the source code was printed in a magazine, and I typed in all the source code, and I went off and played the game. Those days are gone and most computers are pretty opaque to people. Was the goal to make a pretty open computer that stands apart from the hermetically sealed world of the iPhone?<\/strong><\/p>\n<p id=\"tkepws\">Android phones weren\u2019t really even a thing. In fact, the foundation\u2019s incorporation is pretty much contemporaneous with the iPhone launch. But there\u2019s been a long-term trend towards replacing general purpose computers with appliance computers. So this is a vastly powerful computer.<\/p>\n<p id=\"AUiP9b\"><strong>You can\u2019t see this but Eben is holding up his phone.<\/strong><\/p>\n<p id=\"ZENgZY\">Yeah, my iPhone Eight is a vastly powerful computer, but it\u2019s not really a computer, it\u2019s an appliance. That trend started, I guess, with the replacement of home computers as a platform for computer gaming, primarily by games consoles. It\u2019s continued over time to a point where the PC and the Mac are the only surviving examples of what used to be the way computers always were.<\/p>\n<p id=\"u14DUB\">The Chromebook is an interesting example of an appliance that is very successful at replacing a general purpose computer with an appliance computer. The existence of general-purpose computers is not a God-given right. It\u2019s a historical accident, a path-dependent historical accident. What we came to realize is the thing that had absolutely gone away was the cost-effective general purpose computers. There were lots of cost-effective appliances: cheap games, consoles, and mobile phones. But there weren\u2019t any more low-cost general purpose computers. There probably had never been general purpose computers as low-cost as a Raspberry Pi. Really, the idea was that cost had become a barrier to access to devices that might beguile you into being a computer programmer.<\/p>\n<div class=\"c-float-left c-float-hang\">\n<aside id=\"o8hmbY\"><q>\u201cI was beguiled into being a computer programmer.\u201d<\/q><\/aside>\n<\/div>\n<p id=\"7uWuEB\">I was beguiled into being a computer programmer. I didn\u2019t really, on any given day, sit down and decide to become a computer programmer or electrical engineer, and I was tricked into it. That was the thing that had gone away, so when we were saying \u201cWe\u2019re going to make a computer,\u201d we\u2019re not just saying that we\u2019re going to make a programmable computer. We\u2019re going to make a fun computer that happens to be programmable, because that\u2019s what our machines were in the 1980s. You need a thing that beguiles its way into people\u2019s lives and then beguiles them into becoming programmers. That\u2019s what we\u2019re trying to build.<\/p>\n<p id=\"aN9azI\"><strong>You were working at Broadcom, but on the side, you were trying to increase applicant pools to the University of Cambridge.<\/strong><\/p>\n<p id=\"mibeM4\">I was a director of studies at the university.  I remained director of studies for a little while after I went into industry. We were fortunate that the devices that I had access to through my job happened to be devices which could be repurposed to meet this goal of the foundation.<\/p>\n<p id=\"mwoTX9\"><strong>I can say, \u201cThe world needs a $15 computer that is as charming as my Commodore 64 was.\u201d My ability to go and develop that thing is shockingly limited. How did you go from the idea to decision to \u201cWe\u2019re going to spend a long time in stealth figuring out what that product is\u201d to actually shipping?<\/strong><\/p>\n<p id=\"qAeQvC\">Yeah. I\u2019d built something while I was doing my PhD. I\u2019d built a thing based on Atmel, the same chips they used in Arduinos. I\u2019d managed to persuade this chip to generate a video signal and you could plug it into an analog television. It gave you a Trash-80\u2019s worth or Apple IIE\u2019s worth of processing capability, half a meg of RAM, a few MIPS of processing, but it absolutely did not meet that modern definition of fun. It would\u2019ve been very exciting for people our age, but it wouldn\u2019t ever have taken off among young people. Then I ended up with access to these chips, which were intended for the mobile phone market.<\/p>\n<p id=\"aQPESt\">Those turn out to be very integrated. They have the ability to drive HDMI output. They ended up with USB. You go around the outside of a Raspberry Pi board and look at the interfaces that you need: while you\u2019ve got GPI, you have some general purpose IO, you have USB. Certainly until very recently, the way that Raspberry Pi did network was that it would bridge from USB 2.0 to Ethernet. You have USB, which both gives you your USB peripherals and the ability to bridge out to Ethernet. You have HDMI for display output, but you have an analog television and you have an SD card interface. So you have these chips and they were intended to be used in mobile phones, but they end up having all of the things needed. You think, \u201cYeah, actually that does tick all the boxes for what we needed.\u201d<\/p>\n<p id=\"Fq2pF3\">For a long time, they didn\u2019t have general purpose processing cores, so they didn\u2019t have ARM cores in them. Obviously, Raspberry Pi is an ARM-based PC organization, and fairly late in the day, in 2009 or 2010, we got access to the first device from the 270X family that had an ARM11, a very low-end ARM core in it. That became the basis for Raspberry Pi One. In fact, that\u2019s still a device we ship today. We still ship the product called Zero, which is the $5 product. Those are still based around that very first chip, BCM2835.<\/p>\n<p id=\"d8t4JH\"><strong>Were those ARM11 cores the same as the cores in the first smartphones?<\/strong><\/p>\n<p id=\"YlO9Kr\">Are they actually the same? Yeah, I believe the core in the very first iPhone was ARM11 \u2014 incredible when you think how far that chip line has come, through all of the generations of ARM processor and then out into Apple-designed, custom ARM CPUs. The very first iPhone \u2014 I found one in a box the other day. Very chunky object actually. But yes, those were ARM11s. It\u2019s not an unreasonable amount of performance as long as you have fairly constrained ambitions in terms of what you do with it.<\/p>\n<p id=\"bKA1HG\"><strong>The thing that strikes me is we\u2019re talking about appliance computing and we\u2019re talking about beguiling kids into coding and we\u2019re talking about the same chip, or the same components expressed in wildly different ways.<\/strong><\/p>\n<p id=\"Z8RSdE\">That\u2019s it. There\u2019s an interesting dynamic there. You were talking about Apple II. When Steve and Steve were making the Apple One, they could go out and buy a 6502 from an electronics store out of a bin. It cost them 25 bucks. They were basically, for $25, getting their hands on the absolute state of the art in electronics, in chips. The thing you could build with that was going to be competitive with anything that anybody else could build, no matter how big you were. You could sit down and be two guys in a shed and you could build something which could compete with IBM or compete with HP. <\/p>\n<p id=\"SZJFl5\">That isn\u2019t so much the case anymore. A lot of the very highest-end chips aren\u2019t generally available. They\u2019re only available to qualified customers. One of the reasons Raspberry Pi has been successful in the industrial space is we go and get various pieces of silicon from various vendors that are not generally, not broadly, available and package them together in a way that can then be used in the platform for innovation by other people. You think about the single board computer \u2014 the credit card-sized single board computer. A lot of the growth of Raspberry Pi recently has actually been in what we call compute module, which is a version of Raspberry Pi that lacks all of those connectors and is really only those core pieces of silicon that we\u2019ve procured, built a compelling, stable software platform around, and then released in a form which can be integrated into your product.<\/p>\n<p id=\"C0Djh1\"><strong>That\u2019s fascinating. I want to come back to that. I just want to finish the story of Raspberry Pi: you started to get 100 more applicants to Cambridge. The last number I saw is 7.1 million units sold in 2021.<\/strong><\/p>\n<p id=\"8xFjwV\">Yeah, 7.1 in 2020. Seven [million] in 2021. There\u2019s a global semiconductor shortage at the moment, you may have noticed. It\u2019s really galling. We sold almost exactly the same number \u2014 a handful of fewer units in 2021 than we did in 2020 against just a background of absolutely exploding demand. A lot of the work we do at the moment is really managing our customers now through the shortage environment that we\u2019re in, and helping people who invest in the platform continue to build on top of it at a point where we cannot build quite as many. We are still building very large numbers, but we can\u2019t build quite as many as we\u2019d like to.<\/p>\n<p id=\"le8If6\"><strong>That\u2019s your job as CEO of Raspberry Pi, but the structure started out of a foundation, which is just not how a normal startup begins.<\/strong><\/p>\n<p id=\"0MPRWi\">No.<\/p>\n<p id=\"RNkgxT\"><strong>What is the role of the foundation?<\/strong><\/p>\n<p id=\"PRuPmk\">The role of the foundation is to do good work. It\u2019s a UK registered charity. It has a mission. I think \u201cpurposes\u201d is the legal word: the thing that a British charitable foundation commits to do. The purposes of a foundation can only be changed with the consent of the charities commission and the foundation\u2019s board and possibly membership. Its purposes are to promote STEM education, particularly computing education, especially among young people \u2014 particularly among primary and secondary schoolchildren. To do that, it does a variety of things. We return money to it. We return our surplus profit to it. That funds some activities. It receives corporate and individual philanthropic money.<\/p>\n<p id=\"iHH7x9\">It turns out that having a reliable source of income \u2014 which the foundation does from our work \u2014 is extremely valuable for corporate philanthropic partners, because if you\u2019re a company and you\u2019re giving to charity, you worry that the thing you\u2019re funding will dry up and blow away. The way that people mitigate this risk is they make very short, single-year grants. That sucks for everyone, right? It sucks for the recipient because you can\u2019t plan long-term. It sucks for the donor because you end up doing an enormous amount of work every year administering these recurring grants. If you have an organization that you could say, \u201cThis is independently funded. We can guarantee you that we won\u2019t dry up and blow away. We can guarantee that all of your money you donate to us will go on actual project work rather than on central administrative costs. We\u2019ll cover all of that ourselves. In return, you can make three-year grants. It\u2019s easier for you. It\u2019s easier for us. You can take that stream of dividend payment from us and you can leverage that into the philanthropic space.\u201d <\/p>\n<p id=\"LTKvq0\">We also do a lot of government contracting as well now. We\u2019re a trusted provider of teacher training services, for example. All of the teacher training for computer science in the UK now is handled by an organization called the National Center for Computing Education. The Raspberry Pi Foundation runs that along with a couple of partners. While it probably started as an organization that spends the money from the sale of products in pursuit of the traditional Raspberry Pi charitable purposes, it\u2019s become a larger organization with these three pillars.<\/p>\n<p id=\"ujEIvA\"><strong>That\u2019s amazing. What\u2019s the split between all of that work? You run a company called Raspberry Pi and you have enough volume to get chips that other people can\u2019t get. You now have a very commercial product that\u2019s just a compute center, that maybe an agricultural services provider needs to just buy 100 boards to run a wheat farming data cloud. I just made that up. I don\u2019t know.<\/strong><\/p>\n<p id=\"VsWSnb\">That\u2019s probably a thing. We certainly are in the cucumber farming industry. I don\u2019t know if we\u2019re in the wheat farming industry, but I wouldn\u2019t be surprised.<\/p>\n<p id=\"GRTSxw\"><strong>But that\u2019s very commercial, right? That\u2019s a business. That\u2019s your job. Is there a mission split? Do you spend your time thinking about how the purpose of all this is to get kids into computers, or how you have a whole bunch of commercial customers that are driving all of the money?<\/strong><\/p>\n<p id=\"xDHkNB\">Yes. I do both of those things. We are very lucky, with the exception of the compute module product that I mentioned, we haven\u2019t ever really had to specialize: on the one hand, the compute module. On the other hand, <a href=\"https:\/\/www.raspberrypi.com\/products\/raspberry-pi-400\/\">Pi 400<\/a>, which is our Trash-80 format \u2014 Raspberry Pi built into a keyboard. One of those is clearly for our industrial customers. The other one is clearly for our consumer customers and our educational customers. Other than that, the middle bit, the single board computer business, which is still the vast bulk of our units \u2014 we\u2019ve never had to choose. We\u2019ve never had to make an architectural or design decision in order to service one customer or the other. The things you do to be a good computer for kids are also the things you do to be a good computer for oil rigs. We have this idea: \u201cWhat\u2019s the tougher environment \u2014 an oil rig or a kid\u2019s bedroom?\u201d Having been in my kids\u2019 bedrooms, I\u2019m not sure. I have friends who worked on oil rigs. I\u2019m not sure I would care to pick. I\u2019ve never had to make a difficult decision there, which has been quite nice. It is a good split because I\u2019m not naturally a not-for-profit person. That\u2019s not where I come from. I\u2019m a games industry person originally, back in the day.<\/p>\n<div class=\"c-float-right c-float-hang\">\n<aside id=\"OmMIbI\"><q>\u201cWhat\u2019s the tougher environment \u2014 an oil rig or a kid\u2019s bedroom?\u201d<\/q><\/aside>\n<\/div>\n<p id=\"78rBGW\"><strong>The most for-profit industry of them all.<\/strong><\/p>\n<p id=\"vL94BL\">Yeah. That\u2019s it. Most for-profit industry of them all that I got into. Did a startup, sold my startup, got the hell out by the time I was 22. I did perceive it as being a challenging industry to be in for an entire career, but it was a lot of fun while I was there. I\u2019m interested in business. I\u2019ve been interested in business since I was a kid. I remember standing in the train station at Leeds near where I grew up as a kid, and watching the businessmen walk past with their suits and briefcases and thinking, \u201cThat must be amazing to be busy and to have somewhere important for you to go.\u201d<\/p>\n<p id=\"u2Ry2t\">I\u2019ve always been interested in it. I\u2019m just a business geek, really. It\u2019s sad. I did an MBA. The funny thing was I did an MBA just before Raspberry Pi being incorporated and the takeoff of the product. I did an MBA and I finished in April of 2011 and told my wife Liz, who\u2019s a co-founder at Raspberry Pi, that we\u2019d have a quiet time for a little bit. Then the news of Raspberry Pi leaked in May; we kind of leaked it in May. It has not stopped for nearly 11 years now. It\u2019s not slowed down.<\/p>\n<p id=\"khWTCK\"><strong>This is what I think of as the <\/strong><em><strong>Decoder <\/strong><\/em><strong>question. You have an interesting decision-making space. You have a foundation and a mission. You have a vast array of customers, from oil rigs to kids in their bedrooms. How do you make decisions?<\/strong><\/p>\n<p id=\"oXKjQB\">We build the products we want to buy. There\u2019s a characterization of classic-era Apple, or perhaps post-Jobs\u2019 return Apple, as a company that built products that Steve wanted to buy. The genius of Apple was that lots of other people wanted to buy those things. That was why it was successful. We don\u2019t build the things I want to make. We build the things we want to buy. We have a big office full of engineers. There are huge advantages to that as a way of designing products compared to the traditional marketing-led way of doing this stuff, because the problem with that is it tends to lead to interpolated products.<\/p>\n<p id=\"YNB65A\">Traditional market analysis tends to lead to products which interpolate between the needs of different user communities. It\u2019s entirely possible to interpolate; it\u2019s not a continuous space. It\u2019s entirely possible to interpolate between two decent chunky markets. It\u2019s entirely possible to misperceive where the markets are, but even if you perceive where they are, if you try to land products in between them, you can land them in an empty space in between two concentrations of demand. The interesting thing about building the products you yourself would want to buy is at least there\u2019s one customer.<\/p>\n<p id=\"ArqoqA\">Often, most of us are representative of some class of person. If you\u2019re lucky, then it\u2019s a large and underserved class of person and you end up with a product like an iPad or a Peloton bicycle, or a Raspberry Pi. Obviously Peloton is having a fun time at the moment, but the Peloton story is fascinating, right? The guy almost failed to get his Kickstarter to work. Really, his Kickstarter was only backed by his friends. No one could believe that this was going to be a thing. Of course, it turns out to be enormously popular. These category-defining products that you can\u2019t market research or focus group into existence are often generated, I think, by that mindset: \u201cI\u2019m going to build the thing that I want and we\u2019ll see whether there are other people like me.\u201d<\/p>\n<p id=\"cEduRS\"><strong>How many people work at Raspberry Pi? <\/strong><\/p>\n<p id=\"QCSt6R\">The foundation is about 130ish people at the moment. Raspberry Pi Limited, my bit, is about 80 people. Inside that 80, you have an engineering workforce between 40 and 50 people. We have a publishing company. We are actually quite comms-heavy. This is Liz, my wife and my co-founder. She runs that aspect of things. We have very nice graphic design and writing capability. She\u2019s a journalist. As an organization, we\u2019ve always valued community and we\u2019ve always valued writing as a craft just as we valued electronic design and software engineering as crafts. That\u2019s how we\u2019ve come to have a publishing company. That\u2019s how we\u2019ve come to have a bunch of copy editors and graphic designers and videographers and people on staff.<\/p>\n<p id=\"TDKnmO\"><strong>Inside of that engineering organization, you make hardware. You have to also make a Raspberry Pi operating system. What\u2019s the split between hardware and software?<\/strong><\/p>\n<p id=\"E2eCql\">Software-heavy. This is certainly true from my experience: all hardware companies are really software companies, because you can\u2019t make the hardware operative without software. The complexity of hardware has gone up more slowly over time than the complexity of the software that you run on it. We\u2019re a Linux computer company: we leverage this enormous reservoir of collective endeavors of the Linux kernel and GNU and Debian. There\u2019s still a lot of device-specific software engineering. Software engineering is probably two-thirds to three-quarters of the engineering team.<\/p>\n<p id=\"zQVnD4\"><strong>We just had the <\/strong><a href=\"https:\/\/www.theverge.com\/22955336\/sonos-google-lawsuit-ceo-patrick-spence-interview\"><strong>CEO of Sonos<\/strong><\/a><strong> on and he said, \u201cWe have more software engineers.\u201d We had the <\/strong><a href=\"https:\/\/www.theverge.com\/22533735\/john-deere-cto-hindman-decoder-interview-right-to-repair-tractors\"><strong>CTO of John Deere<\/strong><\/a><strong>, which makes tractors. He said, \u201cWe have more software engineers.\u201d It seems like that is just a universal rule. You have more software engineers than hardware engineers.<\/strong><\/p>\n<p id=\"nb4FvD\">Yeah, which is fun as a software engineer; I was a software engineer. One of the big surprises for me with Raspberry Pi was that people do different things in the education space. People do not do with their Raspberry Pi what I expected them to do. I expected people to write computer games because that\u2019s what I did when I was a child. In practice, people build robots. The interesting thing: kids find moving atoms around in the world much more interesting than moving pixels around on the screen. For a company that thinks that software engineering is where all the jobs are, it feels like we\u2019re producing a generation of mechatronics engineers, basically \u2014 hardware engineers.<\/p>\n<p id=\"ykdWAF\"><strong>In terms of your thesis that the Raspberry Pi will beguile you into engineering: if someone wants to move pixels around on a screen, the iPhone developer environment is available to them. They can get an app on their phone\u2014<\/strong><\/p>\n<p id=\"xIJWuP\">If you own a Mac.<\/p>\n<p id=\"niQHat\"><strong>Well, sure. But you can do it.<\/strong><\/p>\n<p id=\"qVLA8E\">Yeah.<\/p>\n<p id=\"B0z8hv\"><strong>Right. If you want to move an atom around the world, and you\u2019re looking at your Mac or your PC or your phone \u2014 there\u2019s no way to do it.<\/strong><\/p>\n<p id=\"XqUNnh\">The best way to do it is to go buy Raspberry Pi Pico, which is last year\u2019s product \u2014 the ultra low-end, the $4 microcontroller-based board. Plug that into your Mac or your PC and use that to move objects around the world. We ended up even solving the problem for physical computing with traditional objects, as well.<\/p>\n<p id=\"zgxNsp\"><strong>When I think of companies making custom chips, I think of the biggest players in the space: Apple, Microsoft, and Google are making custom chips. Seven million units is a lot \u2014 more than I will ever sell of anything. We have a T-shirt store, and I don\u2019t think we\u2019re moving 7 million units. But it\u2019s at a vastly different scale. How did you come to build your own chip? What was that process like?<\/strong><\/p>\n<p id=\"k9b4Oy\">The team here had always struggled. You think about building the things that you want to buy. There\u2019s a constraint that you can build the things you want to buy, but you obviously have to build things that are going to make money as well. One of the challenges with building something in the microcontroller space \u2014 which has always been an ambition for the team here and something that I was deeply involved with \u2014 is that if you build a platform on somebody else\u2019s microcontroller platform, you\u2019re creating value for the microcontroller vendor, not for yourself. They do a lot of software engineering and then there is then a world of clone devices that use the same chips and leverage their software investments for free.<\/p>\n<p id=\"Qa5j9J\">When people design products around the Arduino software environment, once they go to scale, they disintermediate the Arduino product and they just go buy chips. That means that it\u2019s very hard to justify investing in software engineering if you\u2019re not going to get the return. It turns out in the microcontroller space that the winning move is to be the microcontroller vendor. If you\u2019re not the microcontroller vendor, then it\u2019s very hard to make that work as a business model. Very few companies have made manufacturing microcontroller-based boards work. <\/p>\n<p id=\"wgdGXt\">Really, RP2040 is that: it provides Raspberry Pi with an opportunity to build microcontroller boards and to make very substantial investments in software engineering, but then to have some skin in the game in terms of the result. It means that every RP2040 base board has a little cut for Raspberry Pi. It\u2019s important in closing the business model and justifying the return on investment. Making chips is hard, but it\u2019s not that hard if you\u2019ve got the right people. It\u2019s one of those weird things, actually: it\u2019s either impossible or \u2014 trivial is the wrong word, but it\u2019s either intractable or really surprisingly tractable. What that depends on is whether you have the right people.<\/p>\n<p id=\"Vy9LeJ\">Let\u2019s say there are between five and 10 distinct activities involved in going from the idea of a chip to something that\u2019s shipping at scale and is reliable. If you have one person in each of those boxes \u2014 if you\u2019re Apple and you\u2019re going to build an M1 to power your MacBook, you\u2019d need a lot more people in each of those boxes, but if you want to build a chip, that\u2019s relatively simple. As long as you have one person who is extremely skilled in each of those boxes, it goes from being impossible to being tractable. If you\u2019re missing one box, two boxes, three boxes, it goes back from being tractable to being functionally impossible.<\/p>\n<p id=\"n3N7DC\"><strong>What are the boxes?<\/strong><\/p>\n<p id=\"XZfyZj\">Let\u2019s see. Digital front end design, so writing Verilog. Putting your chip together. Structured testing via one or several different means \u2014 ensuring that your chip is correct, is verifiable and verified and will do what it says on the tin, to some approximation. You write a spec for the chip, and then you make the chip, and you do your best to make sure that it conforms to the spec. Then you get the chip back, and then you actually write down what the chip does. That\u2019s the spec. Hopefully they\u2019re fairly close to each other, but there\u2019s always a little bit of post-hoc retrofit of what you meant to do.<\/p>\n<p id=\"hzVDY3\">That said, there are several allied roles in verification. Floor planning synthesis, place and route. Static timing analysis and timing closure: effectively taking the low-level spec of the chips; the Verilog, the synthesizable spec of the chip, and then synthesizing that to make gates, a net list. Then taking that net list and laying those gates out on the chip in a way that causes the signals to propagate through the chip in time to run at your target clock speed, because effectively your clock speed defines a window of time within which you must do everything in a synchronous design.<\/p>\n<p id=\"eB4aV0\">DFT is \u201cdesigned for testability\u201d: verification is about checking that the chip as designed meets the specification. Designed for testability means that once I have a chip that\u2019s come back from the fab, am I able to check whether this is a good one or not? Because some percent \u2014 5 percent, 10 percent \u2014 of chips will be bad chips. You want to be able to discriminate between a good chip and a bad chip very quickly on a piece of automatic test equipment, so you design structures that go into the chip: DFT structures that effectively let you exercise a substantial majority of the paths on the chip and ensure that they\u2019ve been fabricated correctly in the fab.<\/p>\n<p id=\"xgRE1s\">Then you have operations roles, which are effectively about managing the process of getting wafers from a foundry. Good luck with that this year. Actually, we get great support from our foundry partners, but we can feel in all sorts of ways how tight the semiconductor supply chain is this year \u2014 getting them sorted up, put them into packages, tested, and put into reels, then out to the customer. When one of them fails at the customer, we get it back from the customer, and then do a failure analysis on it to figure out why it\u2019s not working.<\/p>\n<p id=\"J5Yfoy\">Qualification and characterization as well: there are elements of the spec that you really actually do need to do post-hoc. How much current can I drive out of this pin? If I\u2019m driving this much current out of this pin, what does the voltage end up being? How much power does the thing consume? These are things that have to be done experimentally, so there are roles there as well. They\u2019re building all of the hardware, designing and building all the hardware associated with that.<\/p>\n<p id=\"Wt6uDy\">I said five to 10 distinct activities, so I\u2019m trying to get over five. I think I\u2019ve got over five there.<\/p>\n<p id=\"hlXO9U\"><strong>That is fascinating. I feel like I could do an hour just unpacking that system. You sell this product for $4.<\/strong><\/p>\n<p id=\"VDq0P3\">We sell the chip for 70 cents.<\/p>\n<p id=\"7FuttJ\"><strong>Right. That is a lot of smart, expensive people for a 70-cent chip that is packaged in a $4 controller board. How does any of this make money?<\/strong><\/p>\n<p id=\"t8wb3S\">[Creating the RP2040]  probably cost like $5 million or something. The answer is you sell a lot of them. That\u2019s the answer with all Raspberry Pi products. They are murderously expensive to design, particularly the modern big Raspberry Pis that have radios on them. One thing we do is we go and do radio conformance everywhere. Raspberry Pi is a legal conformant radio emitting product in Tanzania. We take every product everywhere, and that actually piles up a few thousand dollars at a time. Just the radio conformance for a modern Raspberry Pi product is the best part of half a million dollars.<\/p>\n<p id=\"5LWOyx\"><strong>Is it just Wi-Fi, or do you have Bluetooth too?<\/strong><\/p>\n<p id=\"rhrPmj\">Dual band Wi-Fi these days, and Bluetooth.<\/p>\n<p id=\"LVKyKG\"><strong>To ship that chip in every country in the world, you have to go and figure out who the regulator is.<\/strong><\/p>\n<p id=\"o2FXyy\">Yeah. I remember we couldn\u2019t sell Raspberry Pis in South Africa for a year once because their version of the FCC burnt down, their office. They had a huge backlog, and no one could ship new electronic products in South Africa for a year. You end up being exposed to all of these weird vulnerabilities, and you also just end up spending a huge amount of money, $3,000 or $4,000 per country, on testing. All of these things are expensive and they all are basically powered by selling vast numbers of units. And obviously the numbers for semiconductor products are much higher because the number of cents you make on each unit is much lower and the upfront costs are proportionally bigger.<\/p>\n<p id=\"U1mUo2\"><strong>Do you have that second revenue stream that I see every other consumer tech company racing towards, which is, \u201cWe\u2019re going to turn this phone into a shopping mall, and every button you push on this phone is going to return a 30 percent cut to me\u201d? Or, \u201cWe\u2019re going to do NFTs in video games now.\u201d Every other company is trying to build that ongoing software-mediated revenue stream.<\/strong><\/p>\n<p id=\"qogYHo\">The phrase \u201csoftware company with recurring revenue\u201d is an in-house joke at Raspberry Pi. I talked to an investor once, and I described all the cool stuff we do. It\u2019s all very well being a software company with recurring revenue, but sooner or later, somebody needs to be making hardware \u2014 actually, there\u2019s a business opportunity. If everyone wants to become a software company, there\u2019s a huge business opportunity in not doing that, in being a hardware company. We went to see this investor, and he\u2019s like, \u201cYeah, you guys are great, but you should totally pivot to being a software company with recurring revenue.\u201d<\/p>\n<p id=\"m4QFwA\">We don\u2019t currently. Currently, the software for us is entirely a cost center. As I said, we are mostly a software company, so the vast majority of our engineering payroll is effectively servicing a cost center, which is interesting.<\/p>\n<p id=\"ViCnBL\">Early on, we tried some sort of app store platform, and it wasn\u2019t a success. It was a white-labeled version of somebody else\u2019s platform. It wasn\u2019t a success. Certainly at that time, people weren\u2019t seeing it as a consumer device. We did it in the service of this idea of fun \u2014 that if we want this thing to be fun and attractive to kids, it needs to have entertainment content on it, and you need a store to make that work. We went through all the mechanics of doing that, and it just didn\u2019t fly.<\/p>\n<p id=\"BE761F\">It\u2019s hard to get excited about it, really. Once you get to a point where you\u2019re making your own chips, you\u2019ve bought fairly firmly into the notion that you are a hardware company, and that\u2019s where your field of expertise is.<\/p>\n<p id=\"ImWuzd\"><strong>My favorite headline at <\/strong><em><strong>The Verge<\/strong><\/em><strong> to this day, in 10 years \u2014 we just printed the words \u201cTORTILLA PODS\u201d in all capital letters. I don\u2019t know if you remember this. There was a period where every new gadget was like, \u201cIt\u2019ll make drinks. It\u2019ll be a Keurig for X.\u201d Finally at the end, someone made a tortilla maker with a $15 a month subscription to tortilla pods. It was so dumb: the pinnacle of the pod moment was tortilla pods. All of that came down to needing a recurring revenue stream. You are a big successful company. I think Raspberry Pi is a cultural object now, and the recurring revenue stream is you\u2019re going to want to buy another Raspberry Pi.<\/strong><\/p>\n<div class=\"c-float-right c-float-hang\">\n<aside id=\"qKvD9w\"><q>\u201cYou\u2019re going to want to buy another Raspberry Pi&#8230; That\u2019s the recurring stream.\u201d<\/q><\/aside>\n<\/div>\n<p id=\"Yo7Cxw\">You\u2019re going to want to buy another Raspberry Pi. There you are. That\u2019s the recurring stream: your first one will probably not be your last. And certainly with devices like Pico, at $4, they have this interesting model where people embed them. If something\u2019s expensive, then you\u2019ll do a project with them, and then you will scavenge the object out of the project at the end \u2014 but with $4 products, $5 products, even $35 products, essentially, people tend to leave them embedded in projects and buy another one, and that turns out to be fairly compelling.<\/p>\n<p id=\"ib4Swo\">While we have had challenges with  the supply chain situation, it\u2019s sad. Those challenges have probably fallen harder on our enthusiast base than they have on our industrial base for a variety of reasons.<\/p>\n<p id=\"TuYtPn\"><strong>How do you mean?<\/strong><\/p>\n<p id=\"CsQzES\">If we have been unable to build units, probably enthusiasts have ended up finding it harder to buy Raspberry Pi. Everyone\u2019s found it harder to buy Raspberry Pis, but industrial users, we\u2019ve largely been able to \u2014 maybe they\u2019re not getting everything they want, but they\u2019re getting something. Enthusiasts right now, you can buy a Raspberry Pi, but many days, you have to shop around to find somewhere that it\u2019s in stock.<\/p>\n<p id=\"VubrxY\">What\u2019s happened is because lots of people have many Raspberry Pis, people have been thrown back upon the Raspberry Pis they already have, rather than buying new Raspberry Pis. That\u2019s why there\u2019s still lots of excitement and energy around Raspberry Pi, and lots of enthusiasts building things with Raspberry Pi, because they\u2019re building them with last year\u2019s Raspberry Pi rather than building one now.<\/p>\n<p id=\"7JR7u2\">We have this interesting thing with software: back to cost structure, all of our operating system releases run on everything we ever made. We don\u2019t have a planned obsolescence strategy: we did a Debian Bullseye software release last year. For about a month before the launch, I ran that on a 2014-era Raspberry Pi model 1B on my desk to make sure it was good, and it wasn\u2019t actually good at the point where I first started doing that.<\/p>\n<p id=\"0541gA\">One of the annoyances for the software team in the last month of the releasing process was me saying, \u201cHang on a second. Here\u2019s the 2015 software release. If I grab a window with my mouse and I waggle it, it\u2019s smooth. Here\u2019s our new one. If I grab a window and I waggle it, it\u2019s jerky. What\u2019s that? What\u2019s that about? Fix that. Here\u2019s the memory footprint. Here\u2019s what happens when I run top. Here\u2019s the amount of memory that\u2019s reported free in 2015. Here\u2019s the amount of memory that\u2019s reported free this year. Absolutely happy that the new operating system consumes a little more memory, but I will give you an allocation of 10 megabytes\u201d \u2014 the old Raspberry Pi was a 512MB device \u2014 \u201cI\u2019ll give you an allocation of 2 percent of the memory of the device per year for bloat, so if you\u2019ve had five years, you can have a tenth of the memory on the device of additional bloat.\u201d Over time, that really does add up and make the system hard to use. But we had more bloat than that.<\/p>\n<p id=\"SCCAnb\">So there was that kind of user interface responsiveness and memory bloat figure with some of the last optimization items. That means that you can take a 2012- or 2014-era Raspberry Pi out of a drawer, and you can run it. You\u2019re not having to go back and download old operating system releases from us. You can download the new one. That\u2019s helped people a little bit. It\u2019s an additional cost for us because it\u2019s more testing, which means me being a pain in the neck to the software team, but it does help people stretch the devices they\u2019ve got.<\/p>\n<p id=\"iVRiB0\"><strong>The cell phone supply chain now makes a lot of chips and parts. You see those parts get recontextualized in all kinds of ways: LCD screens are all over the place. They\u2019re so cheap because cell phones exist. A Meta Quest 2 is a midrange Android phone on your face \u2014 just recontextualize all these parts. For you, that means the chips have gotten more capable: I see a lot of people doing media servers or Chromecast replacements with Raspberry Pis. I have a Raspberry Pi here. It\u2019s my favorite product in my entire house. It\u2019s a product called HOOBS: a HomeKit out-of-box, Homebridge out-of-box, and it is literally just a Raspberry Pi that connects my Ring cameras to HomeKit on my iPhone, because Apple and Amazon would prefer not to talk to each other. It\u2019s a whole company that does this.<\/strong><\/p>\n<p id=\"B14V2o\">It\u2019s amazing how often you see this with Tesla and the number of Raspberry Pi Tesla hacks, because Tesla doesn\u2019t want to talk to anyone else.<\/p>\n<p id=\"eIsZnF\"><strong>There\u2019s a lot of middleware that gets built with Raspberry Pis.<\/strong><\/p>\n<p id=\"cDaRAE\">We call it \u201cTell your mom\u201d sometimes: \u201cTell your mom that\u2014\u201d such and such. \u201cWell, tell your dad that\u2014\u201d such and such. Being the sad kid in the middle between mom and dad sometimes offers money to be made. <\/p>\n<p id=\"CdXI6T\"><strong>That\u2019s my question for you. Do you think about expansion into those areas? Do you think, \u201cMan, the market for Raspberry Pi-based Plex servers is very high. We should start making some of those on our own at potentially higher margins, because here\u2019s a company that\u2019s just buying our kit, putting it in a 3D printed box with some pre-labeled software, and selling it as a consumer product\u201d?<\/strong><\/p>\n<p id=\"vMai5k\">No, we love those people. Why have we been successful? Why have we been able to defend our niche? We\u2019ve been able to defend our niche in large part because we don\u2019t pick winners. In my language, that would be picking a winner. That would be picking an application that\u2019s worth pursuing ourselves. We don\u2019t tend to pick winners in software either, so we don\u2019t tend to optimize for specific applications. We tend to try to do as much middleware-level optimization on the platform as possible, because then  those engineering hours benefit as many applications as possible. We do optimize XBMC \u2014 sorry, living in the past. We do optimize for the Kodi media player.<\/p>\n<p id=\"0R1yeG\"><strong>You and I are from the same exact soup.<\/strong><\/p>\n<p id=\"Yt2KnP\">Right. I liked XBMC. I thought that was a nice name. It\u2019s heritage. We optimize that, and we optimize Chromium, because those are applications which are so ubiquitous as to almost be middleware. No, we are very happy to make a few bucks. We sell a lot of units, so we only need to make a few bucks on each unit.<\/p>\n<p id=\"EK2NKT\">If someone takes a Raspberry Pi and puts it in a box and makes a hundred bucks on it, that\u2019s great. Well done. That person took a risk. That person put all of their eggs in one vertical, and if it doesn\u2019t pay off for them, they make no bucks. If it pays off for them, then they make a hundred bucks a unit, and that\u2019s a fair reward for the risk they took.<\/p>\n<p id=\"JrJe81\">We are kind of a horizontalizing platform. The interesting thing with Raspberry Pi is that we built this thing that has lots of little verticals, whether those were consumer verticals or industrial verticals, or verticals that didn\u2019t exist because they were too small to justify the investment in developing a hardware platform to address them. What Raspberry Pi does is sort of smoosh all of those verticals together into one big horizontal blob, and then the residual bits of vertical-specific expenditure; innovation, implementation, get done by other people. The incremental profits associated with that re-verticalization of the horizontal Raspberry Pi platform flow to the people who take the risks. That\u2019s great for them, and I want no part of it. I\u2019ll take my couple of bucks a unit, thank you very much.<\/p>\n<p id=\"hpnxA1\"><strong>That\u2019s very idealistic. <\/strong><\/p>\n<p id=\"oLL4ca\">It\u2019s purely mercenary. It\u2019s the business model that we are good at. Well, I mean, there\u2019s Amazon, right? But there\u2019s a reason why there isn\u2019t one big company that does everything. We are good at what we do, and we would be bad at what many of our customers do with our platform.<\/p>\n<p id=\"NPOcHm\"><strong>Right, but when I say it\u2019s idealistic \u2014 do you have investors?<\/strong><\/p>\n<p id=\"CiPATv\">We do. Well, we have one big investor. Obviously we have the foundation and we have the usual fiduciary responsibility of an organization to its big shareholder. We did a $45 million raise last September from a couple of investors, so we have traditional fund manager money in the organization. Now, we\u2019re lucky: we found some great partners who believe in what we do and believe that what we do is the best way to make money and they are supportive of our strategy.<\/p>\n<p id=\"6FexSv\"><strong>Okay, so you\u2019ve got a couple of great investors who know that you\u2019re not going to go try to eat some vertical market. There are lots of rumors that you might go public \u2014 that you might IPO the company.<\/strong><\/p>\n<p id=\"E4tTvN\">Yeah.<\/p>\n<p id=\"O7XN0c\"><strong>Are you going to IPO the company?<\/strong><\/p>\n<p id=\"VsjOUi\">There\u2019s a war on, right? It\u2019s terrible, right? We are in an unprecedented time now and it\u2019s the very smallest and least important consequence of the unprecedented time. You have an exponential graph of the number of uses of the word unprecedented in the last two years. The very least and least sad consequence of the unprecedentedness is that it\u2019s hard to float companies right now. So would we at some point? Yes, we might. Some of the things we do are very expensive and require large amounts of capital to make them happen.<\/p>\n<p id=\"DLlGdh\">Obviously the public markets are a place that you could go to raise that money. There are other places you could go to raise the money as well. Obviously we have done this recently. I would never say never. I think probably the public discussion of the possibility that we might float the company has run ahead, both of our appetite for it and of the market-level feasibility of floating anything at the moment. I don\u2019t know what it\u2019s like in the US, but from my view in London, markets are basically closed, right? So it\u2019s hard times.<\/p>\n<p id=\"lyEj8h\"><strong>Bracketing all that, which I imagine is very challenging and certainly unprecedented: let\u2019s say you do an IPO. You get a lot of investors who tend to want growth, and they might come to you and tell you that they\u2019re taking your $4 board and they\u2019re shipping a $100 product, making $70 worth of margin on that. \u201cWe just gave you all this money, so just go buy this company.\u201d I didn\u2019t see that very clearly when Google bought Nest \u2014 they basically said, \u201cGo on a shopping spree.\u201d This might have tanked Nest. I think if you asked Tony Fadell he would tell you that the thing that tanked Nest was that Google forced them to go buy stuff they didn\u2019t really want to buy. The Dropcam CEO would happily tell you the same. What happens? You get a bunch of money, and the simplest way to grow is to just buy your nearest high-margin thing. How would you protect against that, given everything you said?<\/strong><\/p>\n<p id=\"XIUsFU\">I will say a couple of things: I\u2019m not sure the public market actually really does prize that. The public market imposes a fairly swingeing discount on inorganic growth. You don\u2019t get the value. You cannot bolt a business together out of inorganic growth and expect the same multiples that you would get for organic growth. Certainly in the UK, that\u2019s a pretty established fact. You get penalized for not having been smart enough to figure out how to go do it yourself.<\/p>\n<p id=\"C9ZJhg\"><strong>I appreciate that.<\/strong><\/p>\n<p id=\"MNMuh0\">There are some challenges associated with that which might not apply to a division like Nest inside a large company purchasing some inorganic growth.<\/p>\n<p id=\"ILVwB8\">I don\u2019t know. I suspect that if one went public, you would hope that the investors became investors  because they like what you do rather than out of a conviction that you should go do something else. Subsequent to being a games person, I come from a semiconductor industry background. Semiconductors is the toughest and most demoralizing world. You think about the intelligence that goes into making the Wi-Fi chip that goes into a smartphone and you think how little money out of the whole stack of the hardware BOM for that platform is appropriated by the Wi-Fi chip\u2019s vendor.<\/p>\n<p id=\"hAUY98\"><strong>BOM is \u201cbill of materials,\u201d by the way.<\/strong><\/p>\n<p id=\"YK6Nm5\">In 2011 when we were designing Raspberry Pi, I was sitting at Heathrow Airport in the departure area, talking to Pete Lowe, my friend and co-founder who designed the hardware. I was on my way to California, and I said something like, \u201cCan you send me the BOM? I may be on a plane for 10 hours and that\u2019s a lot of time to work on a BOM.\u201d <\/p>\n<p id=\"3nMhUi\">And I was just aware of this circle of silence expanding away from me, and I\u2019m worrying that the circle of silence would intersect one of the gentlemen with the MP5 submachine guns. Bill of materials is always fun to do.<\/p>\n<p id=\"n3xKcx\">You think of the small fraction of the hardware BOM: any vendor, a PMIC vendor or Wi-Fi chip vendor or RAM vendor. These people are doing huge amounts of work pushing forward the boundaries of human endeavor, the boundaries of human knowledge, and huge amounts of work, and then you make a few bucks. That\u2019s a tiny fraction of the hundreds of dollars [of] value achieved when that product is sold to customers, which itself is a tiny fraction of the service\u2019s value \u2014 the software companies with recurring revenue, the tiny fraction of the app store value that is generated by all of this work. <\/p>\n<p id=\"NjS7if\">I\u2019m used to being in the semiconductor industry which does huge, amazing feats of intellectual endeavor and appropriates almost no value for it, so perhaps it seems very natural to me. But people do invest in semiconductor companies even though you can draw a picture that says, \u201cYou should really be a cell phone company or a network operator,\u201d or \u201cYou should be Epic Games,\u201d or \u201cYou should be some other participant.\u201d<\/p>\n<p id=\"AKxlap\">If somebody has to be that participant in the ecosystem and the rules of capitalism mean that sooner or later, you will end up being able to appropriate almost exactly your cost of capital \u2014 no less, no more. That\u2019s part of someone\u2019s differentiator, as part of someone\u2019s diversified portfolio: your bit will make this horrible sort of financialist description of how the technology industry works. Every niche over time will come to be no more or no less profitable than it deserves to be, and I think Raspberry PI\u2019s niche is actually quite a nice one. It\u2019s one that we are good at filling.<\/p>\n<p id=\"TWkAoY\"><strong>A lot of people want to use Raspberry Pis for lots of things. We send them up into space. The hardware is still MicroSD storage and USB power connectors, which are maybe not the most reliable. Do you have ideas on how you would make those more robust? Is that a new product line? Is that something you even think about?<\/strong><\/p>\n<p id=\"J8bbyk\">Buy good SD cards. There\u2019s no problem with SD cards \u2014 it\u2019s the thing about power supplies. Our official power supply has a captive cable. Why does it have a captive cable? Because USB cables are terrible \u2013 just think about the number of bell wire USB cables with 10k ohm resistance. So we have a captive cable on our official power supply because cables are terrible. The problem with SD cards of storage is not that the best SD cards are bad. It\u2019s that bad SD cards exist, so go buy SanDisk. Go buy a real, non-fake SanDisk SD card, stick it in a Raspberry Pi. It\u2019s amazing. It\u2019ll never go wrong. <\/p>\n<p id=\"TcI37r\">Like I said, the weakness is the provision of choice. What do we do in the industrial space? Our compute module products have eMMC soldered down on them. Raspberry Pi soldered down the eMMC actually for some of our industrial customers. It\u2019s something that comes around quite frequently as a concept. I suspect it\u2019s actually a product we would\u2019ve launched by now, had we not been in a semiconductor shortage for the last couple years.<\/p>\n<p id=\"RzgGWW\"><strong>How has the chip shortage affected you?<\/strong><\/p>\n<p id=\"w3jKFJ\">It\u2019s very bad. We sold the same number of Raspberry Pis last year that we sold the year before, but we entered last year with about a half-million unit customer backlog, and we left last year with several million units of customer backlog. Now there\u2019s some panic dynamics in that number. You can\u2019t just take the customer backlog and say, \u201cIn an unconstrained market I would\u2019ve sold 7 [million] plus X.\u201d You have to apply some discount factor to X to account for the fact that people are multi-ordering from several places, or they\u2019re trying to build buffers, but you\u2019re certainly millions of units of foregone volume last year.<\/p>\n<p id=\"igEbmE\">That\u2019s unfortunate. The interesting thing is a big part of Raspberry Pi\u2019s value proposition is actually X stock availability, so the ability to buy a Raspberry Pi or huge numbers of Raspberry Pis \u2014 10,000, 50,000 Raspberry Pis from stock tomorrow. That\u2019s what Raspberry Pi is like normally. What\u2019s really happened \u2014 let\u2019s say 7 million units a year business to 2 million units of customer backlog. That\u2019s three to four months of demand. It\u2019s unevenly distributed, but on average, there\u2019s a three- to four-month lead time for volume availability for Raspberry Pis. That\u2019s actually just a traditional company\u2019s model. That\u2019s just how most other people\u2019s hardware is. What we\u2019ve done is we\u2019ve been beaten back to a traditional business. We\u2019ve had this weird, amazing business model, and we\u2019ve been beaten back to a traditional business model, while those people who are in that business model have been beaten back to one year lead times.<\/p>\n<p id=\"I7FdRG\">It is awful when somebody has built their product on our product and made a commitment to us, and we are not able to meet the service level that they have come to expect. Even if it was an amazing service level, it\u2019s the service level that we want to be able to offer. We spend an enormous amount of time \u2014 we have a small sales force. We are not really a selling organization; we are more a \u201cletting people buy\u201d organization, but we do have a small sales force and they spend almost their entire time now managing our industrial customers through the shortage and really looking someone in the eye and saying, \u201cWhen you say you want 500 Raspberry Pis, do you really want 500 Raspberry Pis? Are you building buffers? How many do you need tomorrow so your factory doesn\u2019t stop? Oh, 10? Okay, I\u2019ll send you 10 tomorrow and I\u2019ll send you 10 the next day.\u201d<\/p>\n<p id=\"BrL6YR\">It\u2019s incredibly labor-intensive, but it\u2019s the way we\u2019re getting our industrial customers through this challenge. Honestly, when people come to us, we\u2019re not letting many people down as long as they\u2019re realistic about things, so that hurts.<\/p>\n<p id=\"W0FN9G\">The other thing that hurts is the enthusiastic community is really the heart and the energy of Raspberry Pi. The fact that the shortage is affecting people\u2019s ability to buy their first Raspberry Pi or their fifth or their tenth personal Raspberry Pi \u2014 that\u2019s very painful to us. It\u2019s mitigated a little bit by the fact that most of our greatest enthusiasts have very large personal reserves of Raspberry Pis they can dip into. They can go to the vault, get a Raspberry Pi 2, or Raspberry Pi 3, or just last year\u2019s Raspberry Pi 4. That does mitigate it a little bit, but it\u2019s just \u2014 these people are so important to us, and letting anyone down is painful.<\/p>\n<p id=\"NIYINV\">I don\u2019t know what it\u2019s like in the US, but you can\u2019t buy cement in the UK. Cement is on allocation, fence posts, fence panels are on allocation. You can see people who work in the construction trade and how much it hurts them that there are things that they want to be building for their clients that they can\u2019t build. It\u2019s as much about that emotional thing as the financial thing, because we\u2019re still selling a lot of computers and we\u2019re still making a lot of money. Our customers are still buying a lot of computers and using them to make a lot of money. But that emotional feeling is not a good feeling. I hope we\u2019ll be out of it soon, but time will tell, right?<\/p>\n<p id=\"XyAOVx\"><strong>What\u2019s the wildest thing you\u2019ve ever seen done with Raspberry Pi?<\/strong><\/p>\n<p id=\"KXOVSH\">Wildest thing we\u2019ve ever seen done with Raspberry Pi? I don\u2019t want to say <a href=\"https:\/\/www.newsweek.com\/artificial-intelligence-cucumber-farm-raspberry-pi-495289\">the cucumber sorter<\/a>, but it is still the cucumber sorter. A Japanese engineer with elderly parents running a cucumber farm; Japanese cucumbers need to be sorted into 23 bins. It\u2019s challenging as you get older to keep doing that. This chap built and trained a TensorFlow machine vision model to discriminate between different levels of spine and color and richness and length and so forth of Japanese cucumbers, and to perform a preliminary sort to assist his parents as they got older.<\/p>\n<p id=\"fkuVjy\">It is a flippant example, but it is slightly wild. And it\u2019s a poster child for a particular thing about creativity and a particular thing about unlocking the power of general purpose compute, right? We\u2019re a general purpose computing company. We believe in general purpose computers. We hate appliance computing. Appliance computing will never let you do that because it\u2019s not what it\u2019s for. Appliance computers let you do a thing or a small variant of the thing that the appliance creator wanted. General purpose computers let you do whatever the hell you want. That\u2019s why we love them. That\u2019s why we\u2019re going to keep making them.<\/p>\n<p id=\"8WC51f\"><strong>That\u2019s a great place to end it. Eben, this has been a fantastic conversation. Thank you for coming on <\/strong><em><strong>Decoder<\/strong><\/em><strong>. <\/strong><\/p>\n<p id=\"8uYt6s\">Well, thank you very much.<\/p>\n<aside id=\"CkTJ8m\">\n<\/aside>\n<\/div>\n<p><code><br \/><\/br><\/code><\/p>\n<p>Source: <a href=\"https:\/\/www.theverge.com\/22966155\/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy\">https:\/\/www.theverge.com\/22966155\/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: Today I\u2019m talking to Eben Upton, the CEO of Raspberry Pi, a fascinating company that makes beloved tiny hackable computers that are extremely inexpensive: the cheapest Raspberry Pi is just $4, the most popular model is about $35, and the most expensive model that comes with a keyboard is $70. They run Linux, and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1095,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-1094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The future of computers is only $4 away, with Raspberry Pi CEO Eben Upton - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2022\/03\/08\/the-future-of-computers-is-only-4-away-with-raspberry-pi-ceo-eben-upton\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The future of computers is only $4 away, with Raspberry Pi CEO Eben Upton - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source: Today I\u2019m talking to Eben Upton, the CEO of Raspberry Pi, a fascinating company that makes beloved tiny hackable computers that are extremely inexpensive: the cheapest Raspberry Pi is just $4, the most popular model is about $35, and the most expensive model that comes with a keyboard is $70. 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