, 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>\nYeah, 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
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>\nIf you own a Mac.<\/p>\n
Well, sure. But you can do it.<\/strong><\/p>\nYeah.<\/p>\n
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>\nThe 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
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>\nThe 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
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
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
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
What are the boxes?<\/strong><\/p>\nLet\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
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
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
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
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
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
That is fascinating. I feel like I could do an hour just unpacking that system. You sell this product for $4.<\/strong><\/p>\nWe sell the chip for 70 cents.<\/p>\n
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[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
Is it just Wi-Fi, or do you have Bluetooth too?<\/strong><\/p>\nDual band Wi-Fi these days, and Bluetooth.<\/p>\n
To ship that chip in every country in the world, you have to go and figure out who the regulator is.<\/strong><\/p>\nYeah. 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
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>\nThe 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
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
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
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
My favorite headline at <\/strong>The Verge<\/strong><\/em> 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\n
\u201cYou\u2019re going to want to buy another Raspberry Pi… That\u2019s the recurring stream.\u201d<\/q><\/aside>\n<\/div>\nYou\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
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
How do you mean?<\/strong><\/p>\nIf 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
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
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
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
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
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>\nIt\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
There\u2019s a lot of middleware that gets built with Raspberry Pis.<\/strong><\/p>\nWe 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
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>\nNo, 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
You and I are from the same exact soup.<\/strong><\/p>\nRight. 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
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
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
That\u2019s very idealistic. <\/strong><\/p>\nIt\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
Right, but when I say it\u2019s idealistic \u2014 do you have investors?<\/strong><\/p>\nWe 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
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>\nYeah.<\/p>\n
Are you going to IPO the company?<\/strong><\/p>\nThere\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
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
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>\nI 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
I appreciate that.<\/strong><\/p>\nThere 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
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
BOM is \u201cbill of materials,\u201d by the way.<\/strong><\/p>\nIn 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
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
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
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
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
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>\nBuy 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
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
How has the chip shortage affected you?<\/strong><\/p>\nIt\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
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
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
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
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
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
What\u2019s the wildest thing you\u2019ve ever seen done with Raspberry Pi?<\/strong><\/p>\nWildest thing we\u2019ve ever seen done with Raspberry Pi? I don\u2019t want to say 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>\nIt 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
That\u2019s a great place to end it. Eben, this has been a fantastic conversation. Thank you for coming on <\/strong>Decoder<\/strong><\/em>. <\/strong><\/p>\nWell, thank you very much.<\/p>\n\n<\/aside>\n<\/div>\nSource: https:\/\/www.theverge.com\/22966155\/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"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 […]<\/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":"\n
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