Learning From History

Learning From History

Posted by: Varun Nagaraj | Posted on: Tuesday, May 2, 2017

I caught up recently with my old friend and mentor, Bruce Sachs, General Partner at Charles River Ventures. CRV is a terrific early stage venture capital fund, and Bruce is that rare VC who has walked the walk as a Bell Labs engineer, and then as CEO of a major company like Stratus Computers (fault tolerant computing) before he became a VC

Given that I am currently obsessed with the IIoT and how smart connected products might provide new ways for product companies to provide service or innovate in novel ways (as described in my last blog post), it was only a matter of time before our conversation moved to how developers, product managers, and business managers at Original Equipment Manufacturers (OEMs) should think differently to take advantage of the IIoT.

Bruce then provided an insight that I thought was simple yet profound, and worth sharing. He recalled our early days as engineers when the term “DFX” became prevalent. If you are too young to remember, or if that phase of your life has become hazy over time – let me elaborate. As engineers, we were exhorted to not just design products to implement a certain set of functions, but rather to take a broader set of requirements into consideration while designing products. We were asked to make sure the products we designed were designed to be high quality, or reliable, or supportable, or manufacturable, or low cost, or environmentally friendly. These disciplines were called DFQ, DFR, DFS, DFM, DFC, DFE, and so on. They were collectively referred to as “DFX”. If I recall, the catalyst for the whole movement was the fear that the Japanese were outsmarting us by looking holistically at products while we were not.


Bruce pointed out that the IIoT is a similar disruption. The companies that “get it” will design their products differently to take advantage. These products will be designed so they can be monitored or fixed remotely; the products will call home and provide usage data that the developers can use to identify new features; the products will leverage capabilities on companion products to get their job done, and so on. He collectively called this new set of disciplines “DFIoT” and posited that this term may become just as common in the future as DFX used to be in the 80’s and 90’s.

Product developers at industrial OEMs would do well to remember Bruce’s advice. The companies and engineers who thought DFX was a fad were wrong. The OEMs who think the IIoT is neither an opportunity nor a threat are similarly fooling themselves.

So if you are a developer, educate your boss about DFIoT. If you are a product manager, expand your requirements matrix to reflect new reality. If you are a business manager, don’t leave DFIoT to just the developers. History repeats itself, but if you listen to the right guys (like Bruce), history can be on your side.

Varun Nagaraj

Varun is the President and CEO of Sierra Monitor Corporation