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In this episode of Founded & Funded, Madrona Managing Director Tim Porter and Venture Partner Patrick Ennis host Chris Diorio, co-founder and CEO of Impinj, the pioneer and world leader in RFID technology. Patrick and Chris have known each other for more than 24 years, since Madrona and ARCH Venture Partners co-led Impinj’s first round of financing in the summer of 2000.
In this episode, these three reminisce about old times and share some fun stories while diving into what it takes to truly launch a new category — and the patience required by both entrepreneurs and investors when doing so. They also discuss developing new speculative technology, navigating channel partner relationships, making it through an IPO during uncertain times, and how Impinj became the least known $4.6 billion public company in Seattle. This is a must-listen for any entrepreneurs out there.
This transcript was automatically generated and edited for clarity.
Patrick: Impinj is a massive success story, but many people may not know about it. Why don’t you just tell us? What does Impinj do?
Chris: We make miniature radio chips smaller than a grain of sand. Really smaller than a grain of sand. We were joking that our radio chips are about equivalent in length to 50 bacteria. With those radio chips, enterprises can track their items, get inventory in stores, know that all the items in a medical crash cart in an emergency room are in the crash cart, and there’s a myriad other uses.
Tim: Impinj is such a special place in Madrona history and for me personally, so this is particularly fun and gratifying. When I started in Madrona in 2006, Impinj was one of the first companies I got to work on with our co-founder, Tom Alberg, and our colleague Suja Vaidyanathan at the time. Patrick was working at ARCH but was in the same office with Madrona. I literally met him on my first day in 2006.
And so, now here we are, and what a huge success story and never a straight line to success, which we’ll get into, but let’s go back to the beginning and the founding and the original deal.
$15 million round in 2000. Everything that was getting funded then were dot-coms. And here’s Chris, a new-ish star professor at UWCSC from Caltech, partnered up with one of the industry’s fathers, Carver Mead. I’d love to hear, Chris, a little bit of the founding vision around disposable semiconductors and RFID. Were those things even thought about then?
Patrick, maybe you can comment on a $15 million round in 2000, which was big. How did ARCH and Madrona come together in the founding of the company in the beginning?
Impinj’s Pivot to RFID
Chris: The founding vision was none of those things. The founding vision was a wireless technology that allowed us to make very, very low-power radios.
The original idea behind the company was we were going to use that wireless technology to improve the power efficiency of base station radios for the new big thing, 3G wireless.
Then the dot-com bubble burst, the bottom dropped out of that market, and we had to find something else to do. And so, we looked around. We did a lot of analysis. We looked at ultrasound and GPS and many things. We settled on RFID because, with our wireless technology, we could make, like I said, miniature radio chips that were tiny. I mean so tiny that with the naked eye you can barely see them.
Those radio chips absorb their operating energy from radio waves, so there’s no battery. We said, “We can make these chips. We can put an identifier in them. We can allow enterprises to get information about their items and then, going forward, ultimately enable people to get information about their items.” We started going down that vision.
Then nine months later, Walmart made an announcement that they were going to track all pallets and cases using this RFID technology. We all high-fived. Woo-hoo. Success. We’re going to IPO in 18 months. We’re done. Well, as we’ll get into, we weren’t done.
About 14 years later, we IPOed with a lot of ups and downs along the way. As I look back now, I can truly say any transformative technology takes time. A long time. It doesn’t happen overnight. That was a learning experience for me.
To go back to the beginning, the plan we initially had didn’t materialize, so we focused on a new one and made it work.
Tim: As is so often the case, and thus the Internet of Things was born. Patrick, how did ARCH and Madrona come together to want to do this deal in that size round and convince Chris? Maybe comment on Carver, too, and his role in those early days.
Patrick: Well, it’s interesting you say that because we’ve looked through the files, and there’s no mention of RFID for the first two years.
Chris: That’s correct.
Product-Market-Fit Wilderness
Patrick: That’s not an exaggeration. There’s everything from medical ultrasound to cable modems and DSL and 3G. We were wandering around the product market fit wilderness for a while, and that can be frightening, and you’re told not to do that. But sometimes it’s a good thing when you have a breakthrough technology. If you pick that application too early, you may not ultimately realize all the value. Now, that’s bad advice in general to entrepreneurs, “Don’t worry about your application,” but sometimes, as long as you keep the burn rate low and you’re smart about what you’re doing, then it’s the right move.
Speaking of the round, as you point out, in the year 2000, if you discount back inflation, that size round, seven and a half million from Madrona, seven and a half million from ARCH, that was a fortune.
Chris: Thank you, Patrick.
Patrick: It took a village, but I think in part because we sincerely thought that might be the only round we did. Chris, you had great interest from all the top firms in Silicon Valley, partly because of what you had achieved in your relatively young career, but also due to Carver Mead, who is as consequential a figure as there is in the history of technology in the last 100 years, and that’s not too much of an exaggeration.
How did you view that working with Madrona and ARCH and our founder, Tom Alberg, and working with us versus going with some of the Sand Hill Road firms?
Chris: There’s a lot in those questions. Well, first on the $15 million, at the time we founded the company, I was a three-year faculty member at the UW. They did have $15 million, which was kind of off-scale for me. It’s truly amazing that we were able to raise that amount of money. We thought it would last forever, but of course that amount of money never lasts forever because you’ve got a ton of work to do, hiring people and all the things along the way.
We ended up doing multiple subsequent rounds and, I believe, raised something in the range of about $125 million over the course of the company before we IPOed. But again, we were truly developing a transformative technology.
Going back to those days, we had Tom Alberg on our board. We had Patrick on our board. We had Carver Mead, and it was the collective experience of you guys that settled the company and allowed us time to really think and pursue opportunities. Anytime a major problem came along, and I was all frustrated and all worried, especially Carver and Tom, they’d say, “Relax. It’s okay. Why don’t you look at it this way?” It was that kind of wisdom and it’s more than wisdom. It was that experience and their ability to drive confidence in the paths we were taking. Confidence even though we didn’t at that time know which direction we were headed or how we would get there. It was that confidence that really helped build the company.
And so, you go out, hire good people, hire the best people you can, hire only people that are better than you are, and I truly mean that. With a strong team, you will in general find a way to be successful. We have a set of principles that underlie the company, and they are the most important things to the company. When I go to customer meetings, I’ll often start with our principles. They begin with, “Be respectful. Always act with integrity. Always think big. Always trust your instincts. Always be curious and listen,” and they end with a saying by Patton, which is, “Tell people where to go, not how to get there, and you’ll be amazed by the results.” Those are our principles.
Then we have our mission statement, which is separate from that. Our mission in the world is to connect everything, and we’re going to do it.
Tim: It’s so instructive, and you can have breakthrough technology and world-class technologists, but company success comes back to culture and people. That cuts across all of the great companies that we see here at Madrona.
Founders get to that culture in different ways, though. That’s an amazing set of principles, and you’ve articulated it well, and the company lives them every day.
Did those kind of happen organically? Did you and Carver specifically say, “We’re going to write this down early,”? How did you kind of create that originally and then cultivate it all these years?
Principles and Impinj Company Culture
Chris: It didn’t happen early. It happened later on in the company’s history. We had a set of ways that we behaved, but they weren’t codified in a set of principles. It wasn’t even until after our IPO.
Tim: What year was that?
Chris: We IPO’d in 2016. The principles came about, I think, 2017 or maybe 2018 where we sat down and said, “Okay, the company’s growing. We’re getting more and more people. It’s time to write these things down.” They were not new. They were a set of sayings and actions and the way we behaved. They weren’t new, but putting them down on paper was an important step in the growth of the company. We were living those principles up to that time.
Today, I believe my number one job as CEO is to give every employee at Impinj the opportunity to be wildly successful because, if every employee is wildly successful, the company can’t help but be wildly successful.
I believe every employee’s job, and I tell them this, is to do everything they can to make our customers wildly successful because, if our customers are wildly successful, we can’t help but be wildly successful. That is the vision of the company and how we behave and act. The principles kind of codify that, but it’s our viewpoint and how we go to market, how we act as people in the company, and it is the most important thing to our company, bar none.
Tim: Geniuses taking complicated things and making it simple. That’s a great example, but it’s hard to put it in practice, and you all have done a great job. Let’s go back to the story. We talked about the founding, and you mentioned Walmart making this big announcement but then sort of teased maybe that didn’t play out exactly like everyone thought.
Chris: It did not.
Tim: You mentioned it was 16 years to the IPO. Many fits and starts. We sort of joked RFID, once defined as a market, was still the market that was one or two years away for 10 years, or 15 years.
How did the company persevere, continue to execute and grow, despite a market that arguably took longer to develop than maybe you thought when you first defined it and honed in on it?
Chris: There’s two answers to that question. I think part of the answer is, if you have a vision, and you truly believe in it, and you can see it, you know it’s going to be there. You can just see it. Don’t give up. Just do not give up. Persevere and say, “I’m going to make this thing go no matter what. I don’t know how I’m going to get there. I don’t know what the path is, but I’m going to do it. And day by day, I’m going to figure it out.” And not just I. every person in the company has got to say that. We are together going to figure it out.
Struggles With RFID Standards
And so, yes, in 2003, Walmart made an announcement that they were going to tag all pallets and cases. This was great. It was fantastic. For a couple of small nits, we didn’t have any spectrum we could use. We didn’t have any wireless standard by which to communicate, and we didn’t have any products. Other than that, it was great.
On top of that, we didn’t have any money to buy spectrum. Spectrum is not a cheap thing. Building all the products and creating a worldwide standard for radio communications is not easy. People think Bluetooth and Wi-Fi. Well, we had to create the equivalent thing. We didn’t have it, and you cannot create a worldwide standard overnight.
We got to work, and we created a standard that finally got ratified in 2005 with an immense amount of work. It was the work of 100 PhD theses. It was just incredibly hard because it was doing your PhD thesis, and everybody’s fighting. Got the standard approved, but we had to build products to it. We still didn’t have spectrum. I personally spent a ton of time on that standard development effort. I was a project editor for it.
Then I went and met with the FCC. I joined TG34 in Europe which is the standards body associated with spectrum allocation. I presented in front of MEDI in Japan, and we did everything we could to get spectrum allocated for free. With the assistance of some large end users, we made it happen. In the meantime, the market all the hype went up. But with no spectrum, no standards, and no product, the thing came crashing back down again.
By 2006, it was a mess because we had just gotten some of the spectrum of things, but everybody was walking away saying, “This RFID stuff’s not going to work.”
It wasn’t until 2010 that we were far enough along from a product perspective and everything-else perspective that a couple of large retailers, Macy’s, Decathlon, Marks & Spencer, decided to adopt RFID for inventory tracking in their stores. And that was the beginning of the turnaround. We went through the typical Gartner Hype Cycle. Way up. More than $1 billion of VC money got poured into RFID when Walmart made that announcement way down, crashing down, and only one company of that whole time made it out the other side. It was luck. We were lucky enough that it was us. All the other companies failed or got acquired along the way.
Patrick: Chris, how many chips has Impinj made over the course of time? And where might the average person have encountered them, even though they didn’t know they were encountering them?
Chris: We’ve sold more than 100 billion chips to date.
Patrick: Let’s say that again. You didn’t say 100 million.
Chris: I did not. I said 100 billion. We’ve sold more than 100 billion chips. The industry has been growing at a 29% unit volume CAGR since the year 2010. At this point in time, we’re probably about 0.5% penetrated into the opportunity. The total opportunity is of the order of 10 trillion chips a year. I wish I had brought a vial. I have a vial that’s about the size of the end of my pinky that’s got half a million chips in it, and it’s tiny.
Where Impinj RFID Tags Are
They are effectively consumable silicon. We put the chips into our onto item. In retail stores, for example, let’s say for retail apparel and footwear tracking for inventory visibility in stores, the chips are generally inside the price label. If you hold up the price label to a light and look through it, you’ll see a little black dot. That’s our chip, and you’re mostly seeing the glue around the chip. And then a small antenna laminated into that label. When you get home, you cut off the label. You throw it out. You own the item, and then the retailer goes and buys a new item with a new chip. Every one of those chips identifies the item uniquely. Employees in stores go out with a handheld reader maybe twice a week and do a quick store inventory so the store knows what they have, knows what they need to order.
Going forward, we’re doing self-checkout systems, loss prevention systems, and other kind of systems to make the consumer buying experience much more seamless.
Patrick: On my phone, I have an app where my airline tells me where my bag is. When I do a road race, it tells me what my really bad 5K time is. That sounds like you must be involved in that somehow.
Chris: We’re involved in a lot of those things. If you fly Delta Airlines and use Track My Bags app, if you ever peel back one of the baggage tags, inside you’ll see an antenna with a little dot on it. Delta tracks your bag with what is now called RAIN RFID. RAIN for radio identification.
If you run a foot race, a 10K or something like that, there’s one of the chips with a little antenna in your bib, which you throw out at the end of the race. You don’t have to untie the tag and return it at the end of the race like in the old days. Our chips are on everything. If you think 100 billion, there’s roughly two billion people in the entire Western world. We’ve delivered roughly 50 chips for every person who’s listening to this call, and we’re just getting going. As I like to say, we’re the most pervasive technology that nobody’s ever heard of.
Tim: I love that. From a company building standpoint, it’s so fascinating because, again, you’re breaking new ground from a technology standpoint. You had to search around to find this set of use cases and product market fit, as we say. Even at that point, Delta and these retailers, there was a lot for them to bring together and write applications or track their inventory, et cetera. You’re sort of building the tech, evangelizing to end customers, building partnerships to integrate and take these things to market. That’s a hard set of things to pull off. Of course, back to people, you had some great people around the team, across both technology and the business side. How did you cultivated those end customer scenarios and the end customers while also working across all these partnerships?
Partnerships
Chris: One of the strange things in our industry, which you don’t see very often, is that our early adopter companies were some of the largest enterprises on the planet. Think Delta Airlines. Think Walmart. Think Macy’s. Think Decathlon, the largest sporting goods retailer. Think the Department of Defense. Think Department of Homeland Security. I mean, it’s these enormous-size companies or institutions. Hospital chains. We learned pretty early on that we needed to work with the large enterprises because they were the ones who could retool their operations and retool their supply chain to use what we were bringing to market.
The advantage there is our customers were huge. The disadvantage there is that they had huge operations, and it takes years for them to fully deploy.
Tim: I think an important lesson there for all startups, and even if they’re not targeting Walmart and Delta right out of the box, which you all did, is that you worked backward from the end customer, and then you had to develop the channel partners and integrators. You weren’t printing the hang tags with price tags on it, and neither is Walmart. Somebody else is doing that and somebody else goes and installs other things, et cetera, but you started with that end customer and said, “What’s the scenario?” You helped them cultivate, and then the whole solution and the partners necessary came together from that order.
Chris: We went to the end customer and said, “Tell us about the problems you’re having.” It’s about solving the enterprise problem. Tell us the problem you’re solving. We can solve this problem. Here’s what the solution will look like. The most important thing there, is establishing a trusted relationship with that enterprise customer. Truly a trusted relationship that you and they are in it together to solve their problem.
Financing Strategy
Patrick: Chris, I’d like to ask about how you thought about the financing strategy because you and your team have done a great job through the years of raising money when you needed it from value-added sources, and entrepreneurs and CEOs are always thinking, how do we view strategic investors versus financial? Early on in Impinj’s lifecycle, I think in the what we used to call the series B, I think maybe now it’d be called the series D.
You brought in three corporates as investors. TSMC, UPS, and Unilever. One of them, in particular, turned out to be an amazing long-term partner, and the other two were good partners also. But wondering if you had any thoughts on that, especially TSMC. Although they’ve been around for 40-plus years, recently they’re in the news because of all the supply chain issues and global issues regarding different countries and who makes what semiconductor. It’s very interesting because Impinj’s co-founder, Carver Mead, is the one that provided the intellectual and technical justification for the so-called fabless semiconductor industry. Morris Chang, who’s a very famous founder and CEO of TSMC, several times has publicly credited several conversations with Carver in the 1970s for the founding of TSMC. Yet here you are, a big customer of companies like TSMC.
Chris: Actually, two of those companies have had a very significant impact. Obviously, our relationship with TSMC that goes back more than 20 years, and we have worked closely with them, and they with us, to develop this technology and develop these chips. We chose TSMC early on because we did a bunch of technology evaluation. Back 20 years ago, TSMC wasn’t very big, but they had by far and away the best technology. We’ve had a partnership with TSMC ever since. Both their investment in us and that was a financial investment. Today, their investment in us in just a customer for them and the things they do to help us along as we develop new products.
The other one to look at is UPS. If you listen to UPS’s public statements by their CEO, they talk a lot about RFID, and they talk about tracking packages and the benefits it’s driving for their operations in terms of reducing miss loads, reducing miss shipments, and providing packages at the right place at the right time when they say they’re going to deliver it. I’d encourage you to go listen to some of those statements because it really is a testament to a company getting in early, understanding the benefits of the technology, seeing it as an opportunity for them, and then driving it forward. It’s an example of one of those Fortune 100 enterprises that takes time to adopt but has had the vision for a long time.
And I know, Patrick, you had a chance to meet with Morris Chang, going back to the TSMC.
Patrick: Chris, that was one of the thrills of my professional career. I was on the board of an optical networking company that happened to have a board meeting in Taipei because UMC, which was a TSMC competitor, was an investor. Because of you and Carver Mead, he sent an email, and the great Morris Chang and I had 20 minutes one-on-one at TSMC headquarters in Shinshu City. I was shaking the whole time because in my mind he was like Bill Gates and Jeff Bezos and Henry Ford all put together, but yet he was talking to the little old me, and it was because of you and Carver. He was such a nice gentleman. So smart. Had nothing but great things to say about Impinj even then. And this was 2002, I believe.
Chris: He is in the same mold as Carver and Tom Alberg from Madrona. I have no other way to characterize them other than wonderful people because they think about helping others along their journey.
Tim: Now one of the most valuable companies in the world and that a lot of folks hadn’t thought about until AI chips, NVIDIA, all those things. And there we mentioned AI. Now, we can move on. What a story.
I also just want to comment on Tom again, but he had such an influence on Impinj and, of course, on us here at Madrona. He did so many things that I think he did to help us all be successful, which is work with great people, empower them, take big bets, and then be patient. Probably more, but those all come through in how Impinj ultimately became successful and what we try to take into our investment philosophy today.
Tom Alberg’s Influence
Chris: Tom was a wonderful person, and we all miss Tom. He was wise. He was smart. He was trusting. He was helpful. He was patient and I wish he was still around. I really do. He was on our board from day one along with Patrick joining us on the board early on. Maybe at some point, you can tell your story about how he got to that board, but he was on our board from day one, and he stayed with us up until just a couple of years ago. I believe he was on two boards in the very early days. Amazon and us. I don’t remember when he stepped down. Maybe 2020. In that timeframe. His wisdom and the values that he brought to the company were immeasurable to our success.
Patrick: It was amazing because, when we first put the deal together for Impinj in 2000, we talked about this. Tom was on two boards then, Amazon and Impinj, and we were in awe of that. I think we were somewhat intimidated, but we really, really benefited from having someone of his caliber. He was such a great mentor to everyone that he touched. Specifically, how we put that deal together It combined a couple things.
Even though I wasn’t working at Madrona, I was sharing office space with Madrona, and Tom was happy to mentor anyone. Tom was one of my mentors. He gave me a lot of guidance for Impinj. I remember when we were negotiating the term sheet, Chris. Tom empowered me, and then my bosses at ARCH empowered me within a range. And then, Chris, you had a unique suggestion. Instead of coming over to your office and negotiating the term sheet, what did we wind up doing? And it’s a tool that I’ve heard you’ve used many times since.
Chris: We went on a walk. I do this a lot. We had obviously gone through the terms, and there were some sticking points. It’s often really hard to settle a negotiation around a table.
Oftentimes, and I do this with our enterprise customers as well, say, “You want to go on a walk?” Or, “Do you want to go on a run?” I’ve actually done deals on a run. And there’s something about going out and walking or running. Be careful if somebody’s a lot younger than you when you do the run one.
I remember it, Patrick. I said, “Patrick, what’s most important to you?” And he told me. And I said, “Well, here’s what’s most important to us.” How did we get to a resolution? We just walk and work through it. It was probably only 30 minutes, and we came back, and we were done. I’ve done that innumerable times with many customers out in the field.
The Fail-Fast Mantra
I’d like to go back to the investment topic for just a second. I hear this saying, especially coming out of Silicon Valley, that’s, “Fail fast.” If Impinj had been held to fail fast, we would’ve failed because there was no fast. As I said before, any transformative technology takes time. Everybody kind of takes mobile phones for granted today. It’s taken 40 years. I used the first mobile phone in 1985. It had a rotary dial. It was in a briefcase with a rotary dialed on a coil cord. The “fail fast” mantra works for disruptive approaches to existing problems where the foundation’s already built. Fail fast does not work when you’re inventing a new category.
The benefit of having Madrona and ARCH on our board was that they didn’t have the “fail fast” mantra. You guys had the “nurture the company to success” mantra, and Impinj was incredibly lucky. Incredibly lucky and thankful to have Madrona and ARCH as our first investors.
Tim: That’s kind, I mean, and it’s in the hardest parts about this business is riding the line between having patience versus putting good money after bad or falling in love with a bad idea. Tom was really good at this. I want to tie one other thing in here. I mean, Tom is clearly good at identifying talent and working with great people. You and Carver. Jeff Bezos early on. You’ve also done a great job. You came at it with a technical background. You were a professor at UW. You had some great business partners over the years. Bill Colleran. Evan Fein. You were not CEO. You’ve now been CEO again for a long time.
Any tips for newer founders? Your approach to hiring great people that aren’t technical? How did you hired heads of sales, heads of market, just in general? Do you have an approach? Is it something you had to learn over time? It’s always, I think, one of the hardest things is bringing on board great people in areas that maybe you’re not as comfortable with or don’t have as much experience with as a founder.
Chris: Tim, that’s probably the hardest thing in a company is to hire good people. You always make mistakes along the way. Then to be able to correct your mistakes relatively quickly because what you’ll find in a company is that bad apples, you will hire some, can cause immense damage. They don’t only cause damage financially or other things. They cause cultural damage.
The question is, how do you find the right people? I don’t know that there’s a way. You can write all this stuff down. You know all kinds of things. I haven’t found an institutionalized way to go at it. I meet with people. Spend time with them. I try and probe who they are. I ask them questions about some of the things that were most difficult for them, how they would approach problems, but they’re all basically ways of getting the person to open up and tell you who they are as a person. I don’t like to make a hiring decisions until I understand who a person is.
The Best Technical Question For Candidate Interviews
On the technical side, it’s easier for me. I’m going to share my cheating technical interview question. I haven’t figured out a way to do this on the non-technical side. But on the technical side, it’s really easy. Meet with somebody, and I say, “I’m going to give you 20 minutes to ask me any question you want. And then I’m just going to ask you one question.” And I’m going to tell you the question right now. You have 20 minutes to think about it.
The question is this: I want you to spend the rest of the interview and teach me something. It could be in any topic. Anything. I’ve had people go into soil biology. I’ve had people go into neuroscience. I’ve had people go into the details of spectrum analyzer design. Whatever it is, I want you to teach me. We did something in crypto, and we were deriving equations on the board. I want you to teach me something, and you can get a lot from a person by asking them to teach you something. You’re not asking them questions to probe what they don’t know. You’re asking them questions to probe what they do know. That’s the most important thing because, if they truly do know something, and they worked it all out, and they understand it, and I like it, you’ve learned something about the person.
Tim: So great.
Chris: Anyway, don’t steal my question all the time.
Tim: Why just technical? That’s a good question for anyone. If you understand something deeply, you should be able to teach it to me.
Chris: It’s harder to do on the sales side or something like that. I haven’t yet figured out an equivalent question if I’m hiring a sales lead or something, but it is a question I use fairly often.
Patrick: It’s such a great tool because, as you know, many tech companies, Bell Labs in the old days, Microsoft, they would ask these trick questions, and there’s no correlation between how you do. I was in an interview at Wall Street once, and they asked me, “If a chicken and a half leaves an egg and a half in a day and a half, how many eggs does one chicken lay in one day?” And that’s absolutely ridiculous. If you know the answer, you know the answer, right?
Chris: I would’ve said, “I don’t really like eggs. Next question.”
Tim: We got to talk about the IPO. Patrick had alluded to financing strategy over the years. You went public in 2016, as you alluded to. For those who don’t remember, 2016 was not exactly a go-go year for tech. There was a bit of a downturn in that timeframe for a variety of different reasons. Impinj had already been around 16 years.
Chris: We had outrun the funds that were initially funding us.
Tim: Tell us that story. And how did you manage to get public? And how was that then a springboard for what’s happened subsequently?
Chris: How did we manage to get public? Through a lot, again, of perseverance. We had tried previously and hadn’t had success just due to bad timing or events that happened. In a prior attempt, the market bottom-dropped out of the market just as we were about to go out.
A window opened in that 2016 timeframe. We decided to go. We put everything into it, and we focused on our story, this idea that we’re going to connect everything in our everyday world from point of manufacturing through the supply chain to point of sale, to consumer use, to end of life, beginning with the enterprise side. In so doing, we’re going to transform business operations. We’re going to transform people’s lives. That was the basis of the story. The industry has been growing at this pace. The opportunity’s here. All the pieces are in place.
We went out and told the story passionately. The IPO was hard. We did not have the most glamorous IPO. You can hear about all these glamorous IPOs. They’re flying here and there on private jets, and it’s easy and fancy. No, we didn’t get to do that. I think in the first week of the IPO, I ate at McDonald’s one night, Au Bon Pain one night, Subway one night, and one night on the train where all they had for food on the train was a bag of M&Ms, and I had a little half bottle of screw-top white wine. And that was dinner. But we did pull it off.
Tim: You ended up raising about $100 million in the valuation and the market cap after you went public was $400 million.
Chris: Yeah, it was. I don’t remember the numbers. It’s been too long ago.
Impinj’s IPO Journey
Tim: That was the order. I remember working on that together with you at the time. People talk about IPO windows being open or not open and that it’s this place that billions of dollars gets rained down. That was a financing, right?
Chris: It was a financing event, but it was a financing event through the public markets. And what the IPO really did for us is it opened the window to the financial markets so that, as we executed, we had access to more capital, and it basically allowed us to accelerate our trajectory and put more distance between us and our competitors. That was the benefit of the IPO.
Tim: It’s such a great story about IPOs being financings. I mean, in eight years since, it’s been almost 10x valuation. Market cap increases. Pretty hard to get 10x in any business, but post IPO in less than 10 years is incredible.
And another Tom story. I mean, he invested individually into the IPO, and that was a bit of a catalyst too and another kind of shrewd opportunity that he saw. 24 years in, still day one. You mentioned earlier 0.5% penetrated. Talk a little bit about the future of Impinj and the opportunity, the scenarios for consumers, for businesses that’s still unfolding around this cool technology that you’ve pioneered and created a category around.
Chris: When you use the term RFID, it’s about as broad as saying radio because there’s all kinds. NFC is RFID. Animal tagging. There’s all kinds of RFID. Key cards are RFID.
A couple years ago, we wanted to rebrand the industry in a name that was more consumer-facing because the future is really about consumers getting benefit from the connected items. We decided to rebrand the industry with RAIN, radio identification. That name has been a little slow to take hold, but I believe it will take hold.
There truly is a future coming where not just enterprises, but people get the benefit of connected items where you can locate the items in your house just due to readers in your house, and you know where things are. Where you can authenticate your medicine or authenticate items you buy either for authentication purposes or before you even purchase them.
A phone could easily be the reader in the future. And I don’t see any reason why it won’t be a reader in the future. People will be able to get information about their items using their phones, and you can almost think of it as kind of a AirTag, Apple AirTag-type model writ very broadly. That really is how I envision the future.
Every item that has value or interest to people, we can connect, and we’re going to do it. We’re going to extend the reach of the internet by a factor of 1,000 from powered electronic devices to things. That is the internet of things. We’re going to connect every thing. It’s going to be fun along the way. I’m just getting going. It’s good thing I’m still young. Not.
Patrick: To that end, Chris, 24 years and counting. Probably 25 because you were putting Impinj together this summer 25 years ago. You have the same physical, intellectual, and emotional energy that you had then. How do you do it? Any tips for CEOs out there?
Chris: Don’t get old.
Tim: Interesting advice from a physicist.
Work-Life Balance
Chris: Just keep going. I work hard, but I also play hard. Enjoy the time with your family. Enjoy the time when you’re not working. Enjoy the time when you are working. I guess that is the advice. If you really like what you’re doing, then it’s not work. I love my time at home. I’ve got a granddaughter now. She’s the joy of my life. I take time off work half a day every week, not counting the time, where I spend with her on the weekends, and I babysit for half a day. That’s my time blocked out of my calendar to go to be babysitting. And we play blocks. We read Dr. Seuss and all kinds of stuff. I get to do that, but I also love what I’m doing at work. And so, I guess that’s the story. Do what you love. Love what you do.
Tim: Thank you so much. You’re so generous with your time. You’ve built an amazing company and category.
Chris: No, no. We. We built an amazing company. You guys were on the team. We built a company.
Tim: That’s kind. I know Patrick and I have both learned a lot, and you’ve spent a lot of time mentoring and sharing advice, and this is another great example of that. Thank you so much.
Chris: Well, thank you.
Tim: Here’s to the next 25 years.
Chris: Well, thank you. Thank you.
Patrick: Thanks, Chris.
Chris: Thank you both very much. Thanks.