Raspberry Pi does it all.
, which makes tractors. He said, “We have more software engineers.” It seems like that is just a universal rule. You have more software engineers than hardware engineers.
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 — more than I will ever sell of anything. We have a T-shirt store, and I don’t think we’re moving 7 million units. But it’s at a vastly different scale. How did you come to build your own chip? What was that process like?
Let’s say there are between five and 10 distinct activities involved in going from the idea of a chip to something that’s shipping at scale and is reliable. If you have one person in each of those boxes — if you’re Apple and you’re going to build an M1 to power your MacBook, you’d need a lot more people in each of those boxes, but if you want to build a chip, that’s relatively simple.
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’m 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’re building all of the hardware, designing and building all the hardware associated with that.
Yeah. I remember we couldn’t 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.
Early on, we tried some sort of app store platform, and it wasn’t a success. It was a white-labeled version of somebody else’s platform. It wasn’t a success. Certainly at that time, people weren’t seeing it as a consumer device. We did it in the service of this idea of fun — 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’t fly.
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’t 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’t actually good at the point where I first started doing that.
It’s amazing how often you see this with Tesla and the number of Raspberry Pi Tesla hacks, because Tesla doesn’t want to talk to anyone else.We call it “Tell your mom” sometimes: “Tell your mom that—” such and such. “Well, tell your dad that—” such and such. Being the sad kid in the middle between mom and dad sometimes offers money to be made.
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’t exist because they were too small to justify the investment in developing a hardware platform to address them.
I will say a couple of things: I’m not sure the public market actually really does prize that. The public market imposes a fairly swingeing discount on inorganic growth. You don’t 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’s a pretty established fact. You get penalized for not having been smart enough to figure out how to go do it yourself.
I’m 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, “You should really be a cell phone company or a network operator,” or “You should be Epic Games,” or “You should be some other participant.
That’s unfortunate. The interesting thing is a big part of Raspberry Pi’s value proposition is actually X stock availability, so the ability to buy a Raspberry Pi or huge numbers of Raspberry Pis — 10,000, 50,000 Raspberry Pis from stock tomorrow. That’s what Raspberry Pi is like normally. What’s really happened — let’s say 7 million units a year business to 2 million units of customer backlog. That’s three to four months of demand.