Entrepreneurial Workshop May 20, 2011

1. Entrepreneurial WorkshopMay 20, 2011 Mark Denissen VP, WW Strategic Marketing Texas Instruments m-denissen@ti.com

2. How do you identify important problems worth solving? • What is your Circle Of Competency? • What Important Trends do you see? • What is Changing?

3. There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do. Warren Buffett

4. Problems Worth Solving • Clear Problem Statement (1982) • Tax returns are difficult to complete without Professional help. • Computers have the capability to quickly perform complex mathematics. • We could use Computers to quickly prepare tax returns.

5. Problems Worth Solving • Key Questions • How is the problem solved today? • How do you propose to solve the problem? • Why is your solution superior? • Who is going to pay for this solution to the problem?

6. Tax Example • Key Questions • How is the problem solved today (1982)? • Professional Tax Preparers • Individuals doing their own returns • How do you propose to solve the problem? • Use Computers to quickly prepare returns at reasonable prices • Why is your solution superior? • Faster Preparation • Preparers can be quickly trained • Mathematical accuracy • Who is going to pay for this solution to the problem? • People with Relatively simple returns who do not choose to use a CPA

7. Jackson Hewitt Tax Founded 1982 • Small 6 location business in Virginia • Started selling franchises in 1986 • >500 offices & 300,000 returns 1992 • IPO January 1994 • Acquired by Cendent for $480M 1997 • Peaked at 7400 locations and 3.4M returns

8. Problems Worth Solving • Key Questions • How is the problem solved today? • How do you propose to solve the problem? • Why is your solution superior? • Who is going to pay for this solution to the problem?

9. Where to find interesting problems? • Observe the world around you • Build a network • In your company • With other people you respect • At Research Universities • Multi-disciplined is better • On-line (Use the WWW) • Start with what is possible • Listen first • Wait at least 10 min for 1st “it won’t work because”

10. Invention & Innovation @ TI Innovation in signal processing has been the technology thread throughout TI’s 80-year history. 2000s 1990s Introduces world’s fastest analog-to- digital converter and lowest-power DC-DC converter Creates first apps processor for multi-media cell phones 1980s Introduces single-chip digital signal processor 1970s Applies signal processing to consumer products 1960s Invents thehandheldcalculator 1950s Invents the integrated circuit 1940s Applies signal measurement to magnetic anomaly detection 1930s Revolutionizes oil exploration by measuring reflected signals

11. Innovation Defined “A new idea or invention of new technologies or products is NOT an innovation. The innovation process spans all the actions needed to convert an original concept into a useful product which is profitably taken to market. Pat Haggerty, TI Founder

12. Energy Consumption / GDP Source: IEA

13. NegaWatt Definition Source: Wikipedia: Negawatt power is the idea of creating awareness (and incentives) to reduce demand for electricity to ease the load at peak times or alleviate the need to build more generation plants. In theory, these negawatts can be aggregated and an arbitrage market could be created to trade these. The term was coined by Amory Lovins, who saw a typo — "negawatt" instead of "megawatt" — in a Colorado Public Utilities Commission report. He adopted the term to describe electricity that by means of energy efficiency was not created.

14. NegaWatts: The Argument for Efficiency 65% of all electric energy is lost in the process of conversion (~60%) & distribution (~5%)… this is why energy conservation is so important => 1kWh saved is 3.3kWh of energy source never consumed.

15. Energy Opportunities Continue to Grow Use It Self-Powered Systems Conversion Transportation Move It Motors Transmission & Distribution Consumption Real-Time Monitoring Appliances Make It Power Supplies Smart Meters & Zero stand-by 2-Way Comm. Price Signaling Distributed (Local) Demand Response Renewable (Clean) Conventional (Fossil) Supply Response Lighting HVAC

16. kW-level and MW-level power Thousands of utility scale plants Millions of personal residence, or village accessible energy “plants” Enabled through Higher efficiencies at Lower costs with Greater stability and Increased safety whether Grid-tied or Off-grid mW & W-level power Cutting the cords for lighting, signage and consumer electronics Renewable energy Make It

17. Making the smart grid smarter Move It Communication is the Key • HAN (Home Area Network) • WAN (Wide Area Network) • Wireless RF, PLC, and wired IP • From the Utility to the Meter to the Consumer products, appliances, local generators and Plug-in Vehicles 17

18. LED / Lighting Use It Backlighting LEDs are 10 times more energy efficient than conventional lamps and have enormous life spans… Video display/signage Challenges in power management, dynamic coloring & control, heat channeling and form factor are aggressively being pursued Transportation General illumination

19. Self-powered systems enabled with energy harvesting & ultra-low power ICs • Remote patient monitoring • (body heat) • Industrial wireless sensor network • (light, motion, RF) • Structural monitoring(motion) • Consumer wireless sensor networks • (light, motion)

20. Summary • Identify Key Trends • Build a Circle of Competence around a few • Look for Problems you could solve • Test with these questions: • How is the problem solved today? • How do you propose to solve the problem? • Why is your solution superior? • Who is going to pay for this solution to the problem?