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back to article How I watched a holographic storage company implode

It was a stony and hard road that holographic storage start-up InPhase travelled, going from hope to long, drawn-out despair. Its ambitions were left in tatters after senior management mis-steps and funding difficulties, but now the firm is allowing itself a little hope again. This is an insider's story of what happened seen …

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Happy

Unusual

"I asked three different InPhase employees, did any of them ever remember the CTO standing in front of a number of InPhase employees and asking them why engineering says they cannot deliver a product on the schedule at hand, and yet the upper management pushing to commit to do so. No one remembers this... It would be such an unusual event it would have stood out in their memories."

Hah, it's not "unusual" for the management to commit to impossible deadlines, or for marketing to sell non-existent products at impossibly low prices. Just for the CTO to say it aloud.

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Coat

Sounds familure

Not with this company, but other failling startups, it sounds familure. unrealistic timetables (created without consulting R&D), sub-livable wages, enough tension to cut with a knife, promises of "once we get going, we'll make everyone whole," and (of course) whatever thing they need to "get going" always just around the corner. VERY familure, and NEVER again. I'll go on the dole before I piss in the wind with someone's start-up again, in the end it's about as useful. (yes, some take of and make the early employees alot of money, but you'll find the odds are better at the bacarat tables.)

Mine's the one with the Doctorate in the pocket, from the school of hard knocks, of course.

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Anonymous Coward

You missed the most important one

Putting sustaining till day X as more important than delivering before that? Sounds very familiar.

There is little point to cost save, if the result of the cost savings will mean that you are not going to deliver and fail anyway. Even in mid-recession workforce which knows that it is in "sustain but not deliver" mode will spend more time trawling the job boards than doing real work.

It all sounds way too familiar. The choice of "cut costs by reducing the purchasing budget and ignore what technical personnel says about deliverables" is the standard choice for your average run of the mill mediocre micromanager. It is the most common reason why R&D ventures fail. However, while the venture itself fails, the parasite that caused it to fail continues. He records a "success to reduce costs and operate in a tough climate" on his CV and goes on to ruin another R&D outfit.

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Headmaster

"productise"???

I'm sorry, but anyone who uses a word like that is digging their own grave...!

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Sadly

It's American way though, they turn anything they can into verbs, and it's horrific.

And most of the time, there isn't really any benefit, except they don't need to say as many words or syllables.

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Badgers

Bah, humbug.

It's one of the standard "ise" of 21st century. Though I like them better with a z.

Productize, weaponize, incentivize, politicize.

Securitize? Hm... a new one.

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Stop

@Graham Marsden: That's a Standard Merkin Term

...meaning "developing a technology into something useful for many customers and being an economic success".

Say you have an electronically tunable laser light source working on the bench. Now management wants the team to make a rugged, (for years) stable and supportable instrument out of it. An instrument which can be produced in large numbers at the same quality and which can be supported at the customer's site.

That's much easier said than done. Many technologies seem to work perfectly in the lab only to develop strange behavior when subjected to the stress to the real world.

That's called "productising". That process deserves an own term, but whether you like this word is up to debate.

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@Graham Marsden

My own pet aversion is "leverage".

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Monetize

You missed monetize (normally mis-spelt monetise); that great American way, if you can't monetize it, it should be left alone.

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Headmaster

Oh well, as the saying has it...

... any noun in the english language can be verbed...!!

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Headmaster

@Graham Marsden follow on

Good, I'll carry on pedanting!

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Ru
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Headmaster

Re: "productise"???

As a great man once said, "Verbing weirds language".

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Thumb Up

good article and good luck

Good luck to all the employees, hope it works out for you I really do.

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Coat

> Good luck

I just wanted to tell you both good luck. We're all counting on you.

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Boffin

A Big Yawn

I've been with 5 startups, of which only 3 had successful exits (IPO, acquisition) and one of those "successes" was in name only using a common trick VC's use to hide their failures. (They have another company in their portfolio buy it.) Nothing in this story sounds the least bit unusual for a startup that has to develop the core technology the products will be built upon.

Startups fall into two general categories. (1) Those that require no new technology development to create their products, and (2) those that require fundamental technology development before they can design a product, much less build it.

All software companies fall into #1, as do most consumer electronics products like phones. TV's, etc. These things may require new circuit designs, or new coding and such, but they don't require someone to develop a fundamentally new material and learn to manufacture that material before one can even know the constraints on any designs will be. Companies that fall into #1 are not "sure things", but their risk is more market risk than technology risk. Companies that fall into #2 have a huge technology risk., and even if they get through that, they then have a huge market risk. Companies that fall into #2 almost always underestimate the time and money needed to get the core technology developed, and so often go into starvation mode where people know what is needed (technically) but don't have the resources to deal with it. Sometimes additional money is raised, and they can then address the issues, and sometimes the investors decide it's not worth it.

Startups, particularly ones developing new technologies, are not for the fainthearted.

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Anonymous Coward

Join the club...

... there's a lot of members... :(

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FAIL

US Employment Law sucks

Having to hang on at a company that hasn't paid you in full, because if you don't you lose the right to any back-pay?

Ridiculous.

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It's not employment law that is the problem...

Actually, it's not US Rmployment Law that sucks in this case. They feed into the idea that if YOU leave, they won't make it, therefor it wont matter because there wont be any money anyway. It's actually a pretty effective con, because it feeds (on) your ego.

If it took off, you would be fully within your rights to sue for the back pay. If they go bankrupt you are an unsecured creditor (at best), and only get a proportational amount of the scraps after all the secured and preferred creditors get their part. So they convenice you to stay, because YOU will be the difference between it taking off and a bankruptcy.

Oh, and going after the pricples is probily useless. They are probibly hiding behind the corprate vale anyway, peircing that would require you to prove the company was acting as an extention of the individual, rather then an independent entity (IIRC, IANALAEIIWALIANYL)

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Unhappy

Delays... here comes Blu-ray 400GB+

BDXL is already available in in 100GB and 128GB capacities.

In December 2008, Pioneer Corporation unveiled a 400 GB capacity disc scheduled to be launched... NOW! Development is underway at Panasonic to have a 1TB capacity disc available by 2013.

In July of 2010, Sony and Tohoku University announced the joint development of a blue-violet laser, which will help in creating the 1TB capacity discs.

(Source of the above, Wikipedia:Blu-ray)

I'm hoping the best for InPhase, its remaining and former employees, but the delays have given room for other technologies to steal the market. Even if InPhase is capable of launching a 300GB format, that Blu-ray will beat them or trail them shortly with a 400GB capacity does not bode well for an unestablished brand and technology.

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Read the article much?

The article states that the DISK is 1.2 Terabytes, but the redundantly formatted capacity (remember it's archival) is only a quarter of that. Big difference. So they are where BR hopes to be in 2013...

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Unhappy

good luck to the employees who got screwed over

good luck to the employees who got screwed over

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InPhase Doomed from the Start

InPhase technology was too complex to align and would have major reliability problems

from factory to field.

I tried advising InPhase upper management in early 2000's but like all arrogant management types they usually screw the poach.

http://colossalstorage.net

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FAIL

1.2Tb

The Average 700Mb CDrom contains 4 times that amount of data, plus CRCs etc.

The data is recorded on the disc 4 times to ensure integrity (Audio/Video data is usually "only" recorded twice)

DVDrom and BDrom use the same levels of paranoia - and they still go rotten.

The claims about 1.2Tb are so much puffery.

The big advantage of the InPhase setup would have been that there were no discrete manufacturing layers - which is where defects that lead to disc failure usually occur (dvd-rws can delaminate fairly easily, f-instance and BDroms are trivially destroyed by scratching the surface.)

I'm still using LTO for archival purposes (up to LTO5), simply because nothing better has come along for 300+Tb of data.

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Bart Stuck... Not the hero he claims to be.

Bart Stuck managed to single handily drive InPhase into the ground and cause a lot of damage by misrepresenting the funding situation to the employees for 11 months. Many people were driven into bankruptcy because they believed Bart's promises for money and then later (when they stopped believing) were faced with walking away from the promise of tens of thousands in backpay.

More than 60 employees stuck it out for 11 months at minimum wage only to be laid off in February of 2010. Arcadia put $5M into the company in March in an attempt to revive the company with the expectation that Bart would match this and get the company back on its feet. Once again, Bart failed to deliver on his promise and is now claiming (to the courts) that he owns close to 50% of the company (an undelivered promise is worth 50% ownership... please!) which is a complete lie to keep things tied up in court long enough that he can find another sucker investor to put money into it and prolong the agony.

Arcadia would have put more money in and rescued the technology, but with Bart in control of the BOD there is no way they were going to invest more money and see it go to waste. Bart got control of InPhase from NVP because of Arcadia's investment; not his own. Arcadia is fighting in court for things to be set straight, but unfortunately Bart's situation is more analogous to a prisoner on death row. The longer he keeps it dragged out in court the longer he can prolong his survival. When the court makes its final decision, he will be sued for everything he has. Unfortunately, this promising technology is collateral damage to a bad situation all stemming from false promises and manipulation on the part of Bart Stuck.

InPhase was close to launching this technology. Yes, there were bugs to work out and manufacturing issues to solve, but what new technology doesn't have this. History should look back on InPhase's attempt to develop this technology and it will see how greed and manipulation caused a promising technology to fail. That is the travesty in this whole situation.

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who gives a damn

I mean honestly when you have to run a company on the ledge for months on end that's not going to provide for very good employee morale. Further why would you give bonuses why not just give the least amount money possible and the best people for it if your budget is tight.

I can personally relate this story to a local car dealer that opened up in my area about a year or so ago. The place leased an old chinese restaurant that was converted into a show-room. They have no garage or space to even have one on site since it's property is the size of a produce stand. However they must of had the funding to let the place sit empty for basically half a year while waiting for the okay from the state to begin selling cars.

Now that they are open the place is on a road to disaster. There is no sense in buying a car from some random dealer who doesn't have it's own garage because regardless of what deals they have with local garages your gonna get screwed. I don't know what kind of though goes into these types of companies but apparently it's not much.

Im sure the technology InPhase was trying to produce was very possible had they of had the right materials and people working for them. When months go by and you aren't achieving your goals you need to get people and product in that can or you close up. Why keep running telling people they better find a new job because the one they have is always on the ledge.

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Unhappy

50% BS

Aside from funding issues many companies had problems getting parts from China.

Specifically rare earth and SMT components.

Who ever their supplier was I can bet they could blame the purchaser at their company.

I bet they went to the lowest common denominator and who ever advertised super cheap parts also had third party adverts on their site that got pc's infected like crazy.

But thats what you get.... try to go cheap means you stall products and millions down the tube.

I drooled when I first head about 3D storage media. People like the one in this article would rather see the ocmpany implode and get the IP sold off to some other major company.

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Bart's precious

Fascinating, and largely accurate as far as facts go. However, see the comment by "One man behind the curtain" for an important postscript about events occurring after the apparent tenure of The Register's informant.

It is nothing short of miraculous that Stuck was able to bring in Arcadia Woods, an oft-times specialist in rescuing distressed tech companies, even after all the employees were laid off. However, it was completely typical that he managed to screw up that relationship by lying to them and alienating them until they undertook the current hostile actions. Stuck is that completely useless species: a venture capitalist with no capital -- and the paper management team he has retained (Rancis and Russo) are completely the wrong people for directing any future progress. Stuck bestrides the carcass of InPhase like Golem, hissing and repelling any rescue of the technology with the complicity of the dysfunctional U.S. court system.

On a technical note, the discussion about the "actual capacity" being 1.2 TB is not really accurate, although it is true that there was a lot of necessary redundancy and overhead in the 300 GB format. InPhase had a long-standing published road map for reaching 1.6 TB user capacity (i.e., after required redundancy and overhead), and unpublicized IP likely would have doubled or even quadrupled that figure.

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Grenade

Hmmm

May be like holographic zip program that can zip up a program into the 3rd dimention this making a 700 meg movie file fit onto a floppy disk yes?

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