92. Brian Modoff | From Destroyer to Wall Street to VC: AI, Tech Trends & Never Giving Up

In this episode, Klara Jagosova speaks with Brian Modoff, founder and CEO of MC3 Ventures, Advisory Partner at Summit Partners, and former EVP of Corporate Strategy at Qualcomm. Brian's journey spans enlisting in the US Navy at 17, eight years of night school while working full time, 23 years as one of Wall Street's most consistently top-ranked technology analysts, a pivotal role at Qualcomm leading M&A and venture strategy, and now investing in the next generation of breakthrough companies as a venture capitalist.

From a cryptology-equipped destroyer off the coast of Iran to the boardrooms of Deutsche Bank and Qualcomm, Brian's path is a masterclass in persistence, pattern recognition, and never crawling under your desk when things go wrong.

The conversation explores:

• How Brian built a 23-year career on Wall Street, outlasting an average analyst lifespan of 8 years
• Spotting Qualcomm's rise before anyone else — and having the courage to put a sell rating on them first
• The $30 billion conversation with Steve Mollenkopf that led to joining Qualcomm as EVP
• Why the right idea matters more than the perfect founding team in early-stage investing
• Why putting a CFO in charge of a tech company is an automatic sell signal
• Why America's venture capital community is its most important economic asset
• The one piece of advice Brian would give every young person entering the workforce today

🎙️ Watch Brian's 6G Keynote (B6GS 2025): https://ieeetv.ieee.org/channels/communications/keynote-brian-modoff-summit-partners-b6gs-2025

Key themes: venture capital, Wall Street, Qualcomm, MC3 Ventures, Summit Partners, tech investing, startup investing, innovation, persistence, leadership, AI, engineering careers, wireless technology, mosaic theory, M&A strategy.

LEORÊVER COMPRESSION AND ACTIVEWEAR
Get 10% off Loerêver Balanced Compression and Activewear to elevate your confidence and performance

8 EIGHT SLEEP
Save $200 on 8Sleep and get better quality and deeper sleep with automatic temperature adjustment

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

This content is also available in a video version on YouTube.

If you enjoyed this episode, please share it with someone who may enjoy it as well, and consider leaving a review on Apple Podcasts or Spotify. You can also submit your feedback directly on my website.

Follow @GrandSlamJourney on Instagram, Facebook,  Twitter, and join the  LinkedIn community.

Transcript

Hard Tech And AI Upside

Brian Modoff 0:00

Investing in hard tech. My companies are like metrology companies and semiconductor companies and control plane companies and security and ARV are all this automotive, all these various things that a lot of it is semiconductor involved. But the interesting part about that is the AI enhances firmware. So hard tech, we benefit from AI. AI makes our products better. It doesn't weaken them, it strengthens them. So we're actually benefiting from the trend that we're seeing now versus the software companies getting clobbered by it. For us hard tech guys, we leverage AI. We look at it as a tool for us to take advantage of. I think AI and medical is going to be interesting. AI in military is going to be very interesting, very interesting and somewhat scary. I do think that uh it's going to be a very pervasive technology that's going to spread across pretty much every industry. And learning how to harness it is going to be very important for the industries, for the industry players. And I think what's scary for them, a lot of them don't even understand it, let alone how am I going to deploy this stuff. So it's going to require that they get educated and learn because if they don't do it, their competitors will. It is changing things and it has a dramatic effect on things because AI never sleeps. You can put it in and have it run on your data and crunch it the hell out of it and pull insights out that you may never have even thought of. But you have to learn how to leverage it first and not be afraid of it. And I don't see Skynet coming anytime soon. I don't see that. What I don't want to see though is I don't want to see them remove humans from the kill chain. I do not want to see drones deciding I'm going to kill this person because I'm a drone and I can do it. I think we always need to have human intervention whenever we're deciding to take a life. We need to have humans making that decision, not machines.

Welcome And Guest Background

Klara Jagosova 1:41

Hello, ladies and gentlemen, and welcome to the Grand Slam Journey Podcast, where we explore the intersection of sports, business, technology, and leadership. My today's guest is Brian Modoff, founder and CEO of MC3 Ventures, advisory partner at Summit Partners, and former EVP of Corporate Strategy at Qualcomm. Brian's journey spans enlisting in the US Navy at 17, eight years of night school while working full-time for 23 years as one of Wall Street's most consistent top-ranked technology analysts, covering the rise of wireless and mobile, a pivotal role at Qualcomm, leading MA and venture strategy, and now investing in the next generation of breakthrough companies as a venture capitalist. In this conversation, we explore Brian's unlikely path through my cryptology equipped destroyer to the boardrooms of Deutsche Bank and Qualcomm. How he built a 23-year career on Wall Street by spotting technology trends before everyone else, what he looks for when backing early stage startups, why persistence is the single most important human skill, and what he believes every young person should be doing right now to prepare for an AI-driven world. If you enjoyed this episode, please consider subscribing, leaving a review, or sharing with someone who would love it. This is your host, Klara Jagosova. Thank you for tuning in and enjoy the listen. Hello, Brian. Welcome to the Grand Slam Journey Podcast. So great to have you. Happy Friday.

Brian Modoff 3:24

Happy Friday.

Klara Jagosova 3:25

I am so excited to dive into your impressive journey through military, Wall Street, Big Tech, and now to VC. I think there's many parallels through the discipline running between obviously your military background and sports. Obviously, sports most of the time, we're not risking our lives such as in military. So I'm really curious about that background and obviously going to being one of the top high achieving analysts for over 20 years, studying some of the new trends in the industry, then going to being the EVP at Qualcomm, leading their innovation and strategy and some of their venture capital early on investments to actually now what are you doing? Still spotting trends of innovation, investing yourself as well as being advisor partner at Summit Partners. So there's just a quick intro, but I know we have so much to cover, so I want to keep this short. I want to let you introduce yourself or add anything else you would like listeners and audience to know about

Navy Lessons Under Real Pressure

Klara Jagosova 4:28

you.

Brian Modoff 4:28

I went in the Navy when I was 17. I actually had to get signed in to go in, but I wanted to go in, wanted to get out of the house. And uh was uh actually qualified for nuke school, but I have a bad ear, so they wouldn't let me go on a submarine. So they uh made me an IC man and I I went to uh IC school, interior communications, and essentially learned how to repair communication systems and navigation systems. For uh, I was on a destroyer. I happened to be on a cryptology equipped destroyer, which meant we were essentially a spy ship. And they used to send us off to the strangest parts of the world. We were sitting, and this is an Iranian war going on right now, but we were sitting off the coast of Iran with a contingent of Marines on our ship the night that uh Carter sent uh the helicopters in to rescue the hostages. And, you know, unfortunately the helicopters crashed in the desert and they scrapped the whole mission, but we were all pretty upset about them scrapping the mission because we wanted to go in and and get them out. But, you know, the president of the time, we didn't have the nerve to do anything else, so he killed the mission and it was it. And then when Reagan was elected, the Iranian's handed over the hostages, so they took care of that situation. So did that for four years, got out and uh started working at Rockwell International. I actually built ship's control systems for ballistic submarines. And what those are is if you've ever seen the movie Hunt for Red October, the U.S. submarine, when it's firing off its ballast, steering the ship, diving, surfacing, all those things, that's called the ship's control system. That's what we built. We built like two of those a year. Had uh 40 people working with me and worked at Rockwell for about eight years doing that. While I was working, I went to night school, did eight years of night school, starting with community college, did that for four years, and then went to a place called Cal State Fullerton to get the other four years under my belt and graduate with a degree in economics. Degree in economics really doesn't do much for you. Not a four-year degree. You have to have a PhD, which I was not about to do. That would have been extraordinarily boring. I bought a house while I was doing all that, sold that house and used the money from the house to go to grad school. Went to Thunderbird in Arizona and got a master's in international finance. You know, I was in the Navy, so I knew about communication systems. The thing you do learn about in economics is you've got to write an awful lot. So I turned out to be a decent writer. And uh then with finance, I understood that, you know, numbers, when you analyze a company, the numbers can tell you an awful lot about a company without ever reading anything about them. Like if I just gave you the numbers, I could give you a pretty good idea of what the company does without knowing anything else about them because of the margins and all the cash flows and this and that and how well it's run. So I really liked the study of finance. And uh the one job on Wall Street that combines writing, at least in my case, a technology understanding and finance is an

Night School And Wall Street Breakthrough

Brian Modoff 7:16

analyst. So I got hired by a small firm in Southern California called Cruton and Roth. And I remember I was uh, you know, there were two of us interviewing for the job, and I I would, I I kept calling the guy that eventually hired me, and because it just uh, you know, I was eager to get it. And he he told me, he said, Brian, if uh if I hire you, will you stop calling me? I was like, Yeah, that would work. So I got my first job, had to bang the door down a little bit, but I it worked. I got the job. And I was there for about a year and a half, started covering communication systems, and I got poached by another firm out of Texas, Rasher Pierce. And I was there for a couple of years, expanding my coverage, covering Qualcomm, sort of covering Nokia and Ericsson and you know, companies like that. Uh, handsets at the time were just really coming out. And this is the early days of wireless. And back then, I mean, there were even reports saying that only 10% of the world would adopt a cell phone. And well, those reports are way off. And uh, you know, the industry got bigger and bigger, and I got poached by a firm called Alex Brown uh and moved to the Bay Area. Got married, moved to the Bay Area, had had my kids, and uh worked at Alex Brown for which then got acquired by Bankers Trust, which then got acquired by Deutsche Bank. And I ended my career at Deutsche Bank 23 years later. I made it up to managing director while I was there, and I was uh very involved in the tech practice. And the thing about analysts is the, you know, there's this thing that ranks us called the institutional investors or II rankings. And I made it into the top, top list, and it was there for quite some time uh because of the work I did. And and the way I did research was I would spend an awful lot of time trying to understand technology trends and where they were going, and then trying to work backwards to which companies are best positioned to exploit that. And then those are the ones that I would tend to recommend. It's like these guys are in really good shape to like with in the case of Qualcomm, you know, there was this transition that was going to occur from what was then a GSM technology, which was a 2G technology, very dominant. Ericsson and Nokia did extremely well during that period, to 3G, which would have been CDMA or WCDMA, and that was Qualcomm. And so I got on board Qualcomm and recommended the stock. And in doing analyst work, it's really more about a mosaic theory in terms of how you assemble your data. The one thing you don't want to try to do is go in and try to figure out what the quarters are like. That is a loser's game trying to call quarters. What you really have to do is go in and try to figure out where the trends are headed and then use a mosaic theory to accumulate data from a range of sources. I covered testing companies because they were really good at understanding what was going on inside my companies. I covered distributors because distributors could tell me which phones were selling well and which weren't. And then I covered a range of companies from semiconductors all the way through system suppliers like Motorola and Nokia just to get the whole ecosystem. So I covered the whole ecosystem from the supply chain through to the end market. And that mosaic of covering all those companies used to give me a lot of insights as to who was doing well and who wasn't, and that would affect, you know,

Trend Research And Mosaic Theory

Brian Modoff 10:20

my stocks. And, you know, the other thing you try to do is you try to not fall in love with a stock. I mean, yes, I worked at Qualcomm, but there was a period of time where I had a sell rating on Qualcomm. I was telling investors not to buy their stock. It was in during the 2G days before 3G was taking off, and there were significant problems with CDMA at the time, things like cell breathing and other technical challenges that they were having. It wasn't working well. But once uh, you know, I had this conversation with uh, and I'll name him because he's someone I have a lot of respect for. His name is Dick Lynch or Richard Lynch, he was then the CTO of Bell Atlantic, and he's the one guy that explained to me how CDMA was gonna work, and he was dead right. He said, Brian, the problem with uh with the way there's another company called AirTouch out of LA that was building CDMA too. So the problem with AirTouch is they're only deploying CDMA for coverage. They're putting one CDMA base station in for every three analog base stations. That's never gonna work because noise is the Achilles heel of CDMA. And if you drop the noise floor, in other words, you drop down the amount of noise in the network, capacity increases logarithmically. And so we're deploying CDMA one for one. We're putting a CDMA base station in for every analog base station we have. That's gonna drop the noise floor, and we're gonna get the capacity. And he he actually wrote down the algorithm and showed it to me. And I studied that algorithm and I realized where the weakness is in it, and I understood that he was dead right about that. Once I understood that, I started getting a lot more bullish around Qualcomm because I knew that it was going to work. And so I upgraded the stock and uh covered it for a very long time. Got to know Steve Molenkov, my eventual boss, well before he was CEO. He ran the WCDMA effort inside of Qualcomm, which for some Qualcommers he was the antichrist because WCDMA wasn't CDMA and they wanted CDMA to win everything. And well, WCDMA is what the Europeans ended up adopting. And so Steve was smart in understanding that. And Qualcomm actually was what enabled WCDMA to work in Europe. People don't remember that, but it was Qualcomm's modems that finally got WCDMA to uh scale up in Europe. So Qualcomm actually helped the Europeans become successful in a technology that uh, you know, that they tried to go around Qualcomm with. So it's kind of ironic and interesting. But you know, Steve ran that program, and he and I used to talk a lot at trade shows, uh, just comparing notes about what was going on in the industry. We wouldn't we'd never talk about the quarter. We don't I would never ask that question, nor would he ever answer it. But we just talked about trends and you know, got to know each other very

Qualcomm Strategy And M&A Reality

Brian Modoff 12:50

well. And then um in 2015, he'd just been promoted to CEO. And so he and I were sitting and having one of our annual meetings or one of our meetings, whenever the trade shows were occurring, in the back room of uh the Qualcomm booth. And, you know, I just I said to him, said, Steve, you know, now that you're CEO, the thing you need to understand is that you have $30 billion on your balance sheet. Every banker and their brother is going to try to sell you things because that's what bankers do. They just want to sell you things. They don't care about whether it's good for you or not. They just want to sell it to you. They want to get a transaction. That's what they're they're paid to make get transactions on. That's what how bankers are incentivized. I'd said, you need to be careful about the bankers and what they tell you to buy because you can burn through $30 billion and not have much to show for it if you don't buy the right things. And he looked at me and said, Well, why don't you help me do that? And so that's how you know we negotiated over time. And I joined the company later that year as the chief strategy officer. We had to negotiate what role I would have and what I would do and all that. And what I wanted is I wanted the MA team, the venture team, because venture is a precursor to MA and corporate strategy, because corporate strategy is kind of the envelope around which you do MA and venture investing, because you need to know, okay, what are our core competencies? What are we good at? And how do we leverage that into other adjacent markets? That's a key thing to understand. Because you see a lot of MA in tech, and you see a lot of bad MA in tech. And one indication of that is you know, there's two things, the points to make. One, most corporations do not understand how Wall Street thinks. Wall Street thinks differently than the way they do, it's just the way it is. And so sometimes you'll see companies do MA, and then they're surprised by the reaction on Wall Street. But it's like, you know, look what it's doing to your business model. There's three ways that uh a Wall Street will react to MA. The first way is that they'll hate it. And if they hate it, they sell both stocks. Both stocks, like, you're stupid for trying to buy this company, they're stupid trying to sell it to you. They both sell off. And why are you trying to sell? What's wrong with you? Why are you willing to sell your company? What's wrong with you now? That's a bad one. And and there are some good examples. You have uh you had a a company out of uh Santa Barbara, I think it's Symantec, a bought a company called Sierra Wireless. And that was going to take their gross margins down by 15%, 15, 4%. They had a 45% off sale the day they announced the deal. That meant the market hated it. You have a 45% off, you you obviously called it wrong, and the market not doesn't like what you're doing, does not like the combination. Obviously, it didn't work well. So that's one, you know, where both sell off. This the normal way is what you'll see is when the market's okay with the deal, you'll see the buyer's stock sell down for the dilution, you know, to accommodate for the dilution, and you'll see the seller stock sell up to a point, not to the sales price, but something close to that, depending on the chances of that merger actually going through. So, you know, they'll arbitrage whether the merger is going to happen. So that's kind of normal. And when they like a deal, both stocks trade up. Well, when we announced NXP, we were buying NXP, when Qualcomm announced it, both of our stocks traded up. So I was very pleased to see that because we had a very good reaction. And the reason was is because Qualcomm is a systems company whose output happens to be semiconductors. Whereas NXP is a sensor and silicon company, very good at what they do, with extraordinary channels. They had an army of ants that could go out and sell the combination of our products. And the way I thought of it was that, you know, because semiconductors are getting embedded in all kinds of things. Obviously, your TVs have them, now your speakers have them, your lights have them, it's all kinds of things that have semis in them now that never had them before. And, you know, what I said to Steve about, I said that what we're gonna be known as is when you go to a show like Consumer Electronics Show with the combination of Qualcomm and NXP, you're gonna have a hard time going by a booth and not finding our silicon inside. We were gonna be that pervasive because NXP had the distribution, they had really good products, they had strong engineering, we had the systems capability to make you know these semiconductors work well together as a system, and it was gonna be an interesting deal, but obviously it didn't happen because the Chinese blocked it, and so it moved on. So we weren't able to do that deal. We did do a few deals that were pretty significant, like Nuvia, which is really the core of Qualcomm's processors now, uh, and Arriver, which was uh software for our automotive uh 8S technology that we're involved in now. So we made some good acquisitions, but we didn't get the big one done. A few years back, uh Steve reached out to me to tell me, hey, I'm gonna retire. And and you know, he said Cristiano is gonna be the CEO. And I didn't want to work for Cristiano. I'll have my personal reasons for that, but I didn't want to work for him. And so I told Steve, said, Okay, Steve, you're retiring and he's gonna be the CEO. Can I get a package and move on? He said, sure. So they took care of me. I really appreciate that. They, you know, they took care of me. And I uh left Qualcomm probably it's been about four years

Building A Venture Portfolio

Brian Modoff 17:34

now. Then I started the venture team, or my venture company, and and I invest in seed and around companies. And around the time that I started my venture fund, MC3 Ventures, Peter Chung, who's the CEO of Summit Partners, a guy I've known for a very long time, I've actually worked with Summit several times in IPO me. I took six of Summit Partners uh companies public, last two being Arista and Acacia, which Arista is still trading, doing very well. Peter and I knew each other very well because we'd work together on deals, and and Peter liked me because he told me that I would tell him when I liked something and when I didn't like something, and that's what an analyst is supposed to do. And so he asked me to join as an advisory partner. So I'm now an advisory partner at Summit. I'm not an employee, that's why I can run my own fund. I'm a 1099 guy with them, but I help them source and vet deals, and I really enjoy that because they write big checks and I write small checks. I, you know, I do C DNA around stuff. My checks are, you know, in the thousands, not in the millions, and theirs are in the tens of millions. It's a nice combination of the two. And also, I'm not working 80 hours a week and on planes all the time. So it's kind of a nice, nice transition. And it's still fun because you're looking at some, I have some very interesting companies that I'm involved in. I have everything listed on LinkedIn if anyone wants to look at that. But there's some really interesting companies in that list, and I'm very happy with the the work that they're doing. And it's fulfilling to be involved in these companies and to help them grow and help them uh turn into bigger companies, and and some of them are going to. So it's uh it's a pretty interesting time. It's a very interesting time in our industry with AI and everything else going on. That was a long answer, I know.

Klara Jagosova 19:08

Yeah, I love that. There are so many things I want to dive into. I'm just trying to figure out how to prioritize that. Maybe what stands out to me the most is you're always being attached to studying the new technology, innovation, and spotting the winners or which ones are more likely to achieve greatness and advance. And as you mentioned and I highlighted earlier, it spans from very early on being an analyst, and you were able to dive deep into tech and distill and understand and seems like roll up your sleeves and really see the bigger trends. And you're still doing that actually nowadays with your venture fund, because in order to obviously have your money on return, you have to invest in the right things. How has it changed even now? Because I'm imagining back then, even in your 90s, doing this analysis and seeing the breadth of technology and when things are heading. Was innovation back then faster or slower, or even how you gathered the needed data versus how do you see that trend now and how are you distilling who the winners may be now versus

Why AI Helps Hardware Teams

Klara Jagosova 20:17

back then?

Brian Modoff 20:17

I think technology is definitely accelerating. It continues to develop at an increasingly rapid pace, and AI is only enhancing that. What I like about what's going on with regard to AI is that when I first started my fund, it's been probably around three and a half, four years ago, I'm investing in hard tech. I am a hard tech guy, I'm not a software guy. My companies are like metrology companies and semiconductor companies and control plane companies and you know, security and ARV are all this automotive, all these various things that a lot of it is semiconductor involved, but it's, you know, the interesting part about that is when I started back then, the trend with the VCs back then was SaaS. Back, you know, at that point, interest rates were essentially zero or negative. And SaaS companies were trading at 20 times revenue. And so, you know, I've talked to these VCs about a semiconductor company. It's like, ah, that's not SaaS, I don't want it. And now, you know, we've had a big reversal. You know, you've had interest rates correct. You've had the SaaS plays get initially corrected by the fact that the market had to adjust for higher interest rates. And so they stopped trading at 20 times revenue, they started trading closer to 10 times revenue. So they started coming down on that. And then now you have AI eating into some of these software companies. I don't think it's gonna eat into all of them. I think we're still figuring out who's gonna win, who's gonna lose in that whole area. But the same time that AI is hurting these companies, it is actually it enhances firmware. So hard tech, we benefit from AI. AI makes our products better. It doesn't weaken them, it strengthens them. So we're actually benefiting from the trend that we're seeing now versus these software companies getting clobbered by it. And so, you know, these guys were very, you know, full of themselves back then when they were getting 20 times revenue for their. Companies, but now one of the things that I'm waiting to see, because we haven't seen these VCs and private equity shops mark these assets to market, that when they do, which ones of them are essentially going to get closed down because uh it's gonna be hard. If you've lost 20% of your funds to because your SaaS companies are no longer valued like they were when you paid for them, you're gonna have a hard time raising another round. So you're gonna have some private equity shops and some VCs shut down because of this. We just haven't seen it yet. But for us to our hard tech guys, this is like, you know, who would have told you five years ago that the most valuable company in the world would be a semiconductor company? I would have fallen over had you told me that four years, four or five years ago. But here we are. And our companies, the one I'm involved in here, we we leverage AI. We look at it as a tool for us to take advantage of. So I really like the way things are happening. Some of the BCs and PE guys may not be happy about this trend, but I certainly am.

Klara Jagosova 22:53

On the AI perspective, I literally was just yesterday researching my vacation because I feel AI is everywhere. You're gonna have a day without AI, and at the same time, there's so much going on to your point, even trying to figure out what's the most effective way to get updates on all things AI, because I'm subscribed to four or five different newsletters. I mean, I don't even have time to read them. They all give some different types of information, and so it can be quite tiring. Do you have any tips on that, Brian?

AI Business Models And Private Data

Klara Jagosova 23:21

Going back to your background, how do you distill where is the AI heading? What is the future? Obviously, you have this unique, you mentioned AI is enhancing hardware and semiconductor, which is where you're investing and placing a lot of these bets. But if you had to continue to pick the winners, where do you see it advancing now?

Brian Modoff 23:42

Well, I think one of the things we still have to prove is what is the chat GPT business model going to really look like? You know, what's going to make these companies truly profitable? How are they going to evolve? So, some of that I think we have to see how the market ends up using this technology and how they pay for it. We're still figuring that out. It's a big race. I mean, you know, the thing is that there's this uh fear of being left out. Uh, so there's this big race everyone is building these big models and trying to say we're the top player and and they keep leapfrogging each other on a almost a weekly basis. But then also, how are we going to use it? I think to me, one of the areas that I think we're going to see some of the better use of AI is going to be with in private networks with private data. And to me, one of the players well positioned to take advantage of that is actually Oracle, because their databases hold a lot of very specific private data owned by the companies. Oracle doesn't own it. The companies own it, but they can then use AI with that data to enhance their own businesses. So I see that as the private side of things versus the public. And so like ChatGP and some of the other public, you know, I think that is to me a an interesting area to look at. The public side, I think, is still sorting itself out. We don't know who the Google of this era is going to be. The other thing I think we have to be careful of is AGI. I'm I don't know that AGI, just like true self-driving cars, are gonna, you know, where they're they can self-drive. I mean, self-driving cars get a lot better. I we we invested a lot in that at Qualcomm. I worked with uh Nicole de Gaulle, who runs that group at Qualcomm. We worked together a lot to build that up while I was there. And so I've been in a lot of self-driving cars and and I've seen them really evolve from where they were, you know, call it five, seven years ago to where they are now. They've gotten a heck of a lot better. I was just in in uh uh Germany a few weeks ago visiting Moya. Moya is this uh a division of Volkswagen. They picked us up at the hotel to take us to the headquarters to talk about business and all. And we got picked up in one of their self-driving vans. There's a few of them here in Austin. They're the golden black ones. They're not many of them, but the golden black van BW vans, that's Moya. And you know, they it struggled at first because we were our hotel was located and where streets were from somewhat narrow. And so it had struggled in that narrow area, getting out of there. It was a little jittery, hesitant, that kind of thing. But once we got into a main road, it was fine. And we got on the freeway, it was perfect. So we're getting a lot better. And level five, though, true level five, I think anywhere is a ways off, but true level five in certain known areas definitely is something that's coming. With AI, AGI is what everyone talks about, artificial general intelligence. To me, AI is a tool, it's a very useful tool, but it being able to actually think for itself, I'm I'm not convinced that's gonna happen. I think it's really stat muxing in a way. We've called it neural networks, we've called it machine learning, we've called a lot of other things in the past. But, you know, it is really it's crunching big data sets. And I guess the one thing that's gonna make it even better is gonna crunch even bigger data sets over time. But it being able to think for itself, I don't see that anytime soon. I think that we don't have the systems aren't there to support something like that. But it will be, AI will be a very useful tool for distilling down data and making something useful out of that. Like medical research, I think could be an area where it's interesting, certainly communication systems.

AI For Wireless Network Efficiency

Brian Modoff 27:06

I'm involved with a company called Opanga. I'm an investor and advisor on that one, just so people know. And we use AI there to manage wireless networks a lot more efficiently. Like wireless networks are very, very dynamic. You know, you think about how a person uses their cell phone. They're at home, they're on the phone, they drive to work, they're on the phone. When they're at work, they're using their phone. But what's happening to the network itself? Well, it's busy in the morning in the suburban areas, it's busy during the day in the urban areas, and then it, but it's not so busy in the suburban areas, and then it switches again at night. And then in the middle of the night, it's not busy anywhere. Well, one of the things OpenGa does is it'll turn power amplifiers off in the base stations when they're not being used. It's like, why are we transmitting when no one's listening? Why are we wasting electricity when no one's using it? So, and that's just AI say, hey, there's no one on these channels, let's turn down the amplifiers. The other thing you can do is like wireless, one of the ways that we handle traffic is we generally assign a user to us uh to a frequency based on the strongest signal. It's not necessarily the strongest signal that that is the best routing for that call. It could be this is a data session, you've got a higher frequency that the signal strength is slightly weaker, but it's got a lot of bandwidth available. Put that session over there. Don't put it over at the 800 megahertz where everyone else already is. So using the resources more efficiently, that's all done by AI. And so those are good use cases for where AI has a real meaningful saves money impact on the world. And that's why, again, why I think hardware and AI are such a nice combination.

Jobs Fear And Market Cycles

Klara Jagosova 28:39

And you're highlighting now the connectivity, which you have been part of that trend for a long time. Actually, in preparation for this podcast, I've been listening to some of your talks that are even 12, 15 years old, still talking about actually back then 5G. I had more hair about the future. So it highlighted for me how you've always been on the cutting edge, taken that hardware, AI, and now there's obviously this trend of AI and RAN combination, as well as it's starting to spill into true technology dominance and dominance on a country level, because in many ways, even going where you started, Iran and kind of wars and everything, we can even just read the wars now going on are very different than then used to be with the drones and technology. There's this talks about 6G and some of the sensing. How do you make sense of all that's happening? Kind of the importance, what is your forecast for the AI RAN picking up or not picking up, or some of the AI grid that's being now announced even at Nvidia GTC?

Brian Modoff 29:45

When you combine AI with managing systems, you can make them a lot more efficient. You know, it works. I see it in just in the RAN. But yeah, there's ways to apply that because people have patterns, systems have patterns, and there's ways to use AI to optimize how you're using those systems based on how the patterns are evolving. So, you know, I think that it has a meaningful number of use cases. One of the funny things I think is that people say, oh, it's going to take everyone's jobs. And I think one of the recent analogies that uh Jensen mentioned was oncology. You know, they were saying, okay, now that you have AI reading X-rays, you're going to need as many oncologists. Well, no, actually, what ended up happening is AI could read the X-rays faster, but you still need a human in the loop to, you know, process what the AI saw and say, okay, yes, this and this and this. So what it ended up doing was it created even faster turnaround for x-rays, which generated even more demand for x-rays, which means you need more oncologists. So we have actually a need for more, not less. And so I think people are freaking out, oh, it's going to take everyone's job. I think there's certain software jobs where it might have an impact. But, you know, I think one of the things that that's been getting talked about by Jensen and others is that actually the people that are going to benefit from AI are the ones that figure out how to leverage it in their jobs. And I think there's a lot of tooth in that. I think we always freak out about new technologies replacing everything, and they don't. Cotton Gin was supposed to eliminate labor. Well, I think we still have a lot of labor out there. So one thing about people need to understand about technology evolution and Wall Street to some extent. We do this every time. I've seen, I saw this with the internet. Yeah, I live through that bubble too. We it's always, you know, it's best things in sliced bread, never gonna work, and then it gets deployed. So right now we're in with AI, we're in the best things since sliced bread. And we're gonna hit a point where it's like, oh, it's not working, and then we're gonna have a correction. And if you're a stock investor, that's when you buy. And it's like Warren, he's a very smart man for a reason. And he said, I buy when people are fearful and I sell when people are fearless. And right now they're fearless. And so there's gonna be a fearful point, and that's when you maybe want to look at NVIDIA or some of the other ones and pick some more up because you when stuff goes on sale, that's when you generally want to buy it. And that's the thing, funny thing about Wall Street and stock markets is when they go on sale, people forgot and say, I gotta get out, I gotta sell. It's like, no, you should always have money aside. You should never have all your money in the market. And then when you hack, because you should take advantage of sales when they happen and buy quality companies when they're getting beaten up because they're not, they haven't stopped being quality. There's some skepticism around them, you gotta be careful because, but there's gonna be enough good quality companies out there in a sell-off that you should be able to find something. Just don't freak out. I've been on Wall Street since '93. I've been through multiple ups and downs. I don't freak out. The first time I did, but I learned from that.

Klara Jagosova 32:29

Embrace the chaos and stay calm. That's when everybody's panicking, that's the time when you're gonna be able to do it.

Brian Modoff 32:35

That's when you want to be in there. That's when you want to jump in. When everyone else is freaking, you got to get in there because they're they're dumping it and take advantage

Staying Calm In Chaos

Brian Modoff 32:42

of it.

Klara Jagosova 32:42

Is that a developed instinct, Brian, from your analyst background, or does it go back into the military? Because I feel like you have to hone that mindset, especially in those high pressure situations.

Brian Modoff 32:55

Yeah, when you're in the military, you certainly can't panic under stressful situations. That's what gets you killed. So no, you have to learn how to deal with that. And the thing, that's one of the things the military does do with us. Like when we're off the coast of Iran, we were supposed to go over there, our destroyer, we were supposed to go over there for like three months. We were there for almost a year. And we were supposed to go see ports like Karachi and Kenya and all that. All those got scraped. We sat off the coast of friggin' Iran day after day. One thing I can tell you about the Persian Gulf is there's a lot of sharks in the in the water there, so you don't want to go swimming there. But uh, it's very boring. Sandstorms look like brown fog, and we saw a few of those. And you know, it's actually pretty boring. I would like churn through probably a book a day while we were there because there's nothing outside of fixing working on your gear, maintaining the ship and everything, you're there's not much else to do because you're sitting at anchor because we had our radar systems up and we were we were spying on the Iranians. And so we would run drills regularly because they would send those little you know, speed boats they have, they'd send them out after us and you know with their missiles or whatever they had, and we'd train our 57-inch guns on them, and you know, one of our shells would take one of the boats out like that. So we never got attacked, but we'd have to go to general quarters and you know it was that training. It's like we all had specific jobs we had to do in general quarters. And so, you know, the whole ship, we all had specific roles and functions, and we were trained and trained and trained so that we knew how to react in a situation. And we would just go through the drill and do what we needed to do, and you know, the ship stayed safe. You know, that's part of that is training. But that's also, yes, on not freaking out on Wall Street. Part of that is just I've seen it. I've been through many of them, and I've seen that we do recovery. It doesn't go away, it's not like at the end of the world. Everyone points at the Great Depression. Well, there were certain specifics about the Great Depression that that affected monetary policy that had there were negative things that we did that we've learned from since. We don't do that. We don't cut off credit like we did back. We just cut it off. It's like, oh, why isn't anyone spending? Because no one has money. Well, we cut it off. Well, hello. So we don't make those mistakes now. So, you know, you got to learn from that. So it doesn't mean that we won't ever have something like that again. You can't predict. We would have predicted COVID. But uh, even in COVID, I mean, God, I remember I was at Qualcomm during COVID, but I remember uh the market opening, you know, the first few times after you know we went through lockdown and the sell-offs that were occurring. And I'm just like, you gotta stay in it, can't get out of here because it's like, why panic now? And we didn't. I stayed. We stayed, kept our money in the market and actually bought more stock. Like I said, we we should do it. And it worked out fine. The stocks are like running down like crazy. It was like they were almost like slot machines the way this this prices were spinning downward. It's nerve-wracking, but you've got to tell yourself, look, it this two shall pass.

Klara Jagosova 35:32

Any tips for practicing debt calmness and mental toughness? It seems like it was trained into you from early on in military and you found a way to apply it throughout your career. Is there anything else you would give an advice to people when in crisis, not panic? How do you embrace that mindset?

Brian Modoff 35:53

Yeah, I think you need to trust your instincts and be calm with what you know. There's an old saying, and some of this will come with experience, and and some of the people that might listen to that are older, like me, they have that experience, so they know that. Younger people may not know that. One of my uh first bosses on Wall Street, who was director of research, said, you know, an analyst isn't worth their weight in salt the first five years or worth their weight in gold after that. And the reason was experience and knowledge. You gain, you you make mistakes, but you learn from them. As long as you're learning from your mistakes, you will move forward in life. It's when you keep repeating the same mistake, you gotta kind of like, hey, what's going on here? Why I keep doing it this way? You gotta learn something. And as an analyst, it was very true. Like, I made some mistakes early in my career and blew myself pretty well with a few stocks, made the wrong call and had to live with it. Because the thing about when you're an analyst is your calls are in writing. You can't deny you ever said that because it's sitting right there in black and white. Yes, I did say that. I did have a buy on that stock and it did blow up. But the other thing you had to learn with as an analyst is that when you went through one of those, and all of us did, I can't imagine anyone never having done it. You got to, you know, dust yourself off, pick yourself up, and go back out there and make another call and go out after and go after another company. Worst thing you can do is crawl under your desk. And that was actually one of the things that would that would separate the analysts, because the average life of an analyst on Wall Street is about eight years. I lasted 23. So well out lasted the average. And and I blew myself up even when I was older. I mean, you know, sometimes you get a well, didn't see that one coming, but you gotta, you know, pick yourself up, go back out there and start making calls on other companies and and you know, just double down on your work and make sure you're getting as much right as you can. But you cannot hide under a desk in life if uh you get thrown a curve. You best thing you can do is get back up and get out there because no one's gonna feel sorry for you sitting under your desk.

Klara Jagosova 37:43

I love that. And it does seem like that mindset came to you even from your maybe just tough upbringing and the military background that you then translated over to the later lives as a competitive advantage, a later part of your career.

Brian Modoff 37:57

I think it helped, you know, when you have a few scars growing up, it makes you a little tougher.

Klara Jagosova 38:01

My hypothesis and bias now, obviously, interviewing impressive people like you, is at times the tougher the upbringing, the tougher the person becomes. I have some of my friends, even dear friends, that actually grew up in war type of countries, really tone-up wars where bombs flying left and right and they just kind of go about their life. I find them to be the most the strongest mentality because they're almost become unshakable in a way. I mean, not that anybody should ever grow up like that, but to me, it's like when when you're tossed in that type of environment and you have to figure out how to adapt, it makes you tougher in the long run.

Brian Modoff 38:41

You know, it's like when I was doing the eight years of night school. That wasn't fun. Eight years of fucking night school is not fun. I didn't have a social life because I was either if I wasn't working, I was in school, I wasn't doing one of those two, I was studying. And so, you know, my weekends were tied up. But, you know, I also realized back then I was gonna get older regardless. So I was gonna age regardless of whether I went to school, because it's the only way I could afford to go to school, is because I had no one supporting me. I had to pay for everything myself, was that I had to work and uh that I wanted to get a degree. I was gonna age regardless of if I did any of that. So I was like, yeah, this isn't fun, but at least in I didn't know it would take eight years, but you know, eventually I'll get my degree and then I'll be able to go do something different. You know, I didn't mind being a manufacturing supervisor, but that wasn't what I wanted to do. I didn't want to build hardware the rest of my life. I wanted to do what I ended up doing, you know. So had I not persisted over eight years, I wouldn't have gotten here. And so, you know, persistence is one of the things that I think is a human skill set. If I could give my kids any one thing, it's persistence. You got to be persistent. If you're not persistent in life, you know, you you you got to keep getting back up and going back out there because if you're not, you're not gonna advance. And no one's gonna help you. The thing people need to realize, hey, you have your friends and your family and everyone, but you're all ultimately responsible for your own life. No one else is responsible for your life. And if you want to make something about your life, it's entirely up to you. I mean, yes, other people can help. I've had there were a few people have along the way uh helped me. There was an officer that I befriended when I was in the Navy. And I was thinking about re-enlisting. He was on my ship and I got to know him, and then he he got sick and he was in the hospital. I went to visit him in the hospital when I was visiting him. I said, Hey, I'm thinking about reenlisting, and this is the role they want to give me. And he said, Do not re-enlist. You need to get the fuck out of the Navy. He said, Some people belong in the Navy, you're not one of them. Get the hell out of here. And I kind of that kind of woke me up and I went, I remember going into the recruiter's office the next Monday saying, I'm not going to reenlist, I'm not signing the paper, I'm getting out. And he was shocked because they gave me a good billing. I'm glad I got out. I'm very glad I got out. But so that guy helped me. He just may not remember that. Dick Lynch helped me with, I told you earlier about CDMA. You know, some there are people in your life that will help you. Steve Molakoff offered me the job. I got a Qualcomm. He helped me in that way. So you have to appreciate people that do those things for you. But ultimately, you're still responsible for getting yourself where you go.

How He Picks Startup Bets

Klara Jagosova 41:00

And how do you apply that mindset to then picking now and investing in the early startups? Because I'm guessing the technology is one part of it. You clearly have an eye for spotting some of the key trends and cutting edge. That's what you're looking for. But what's the mentality? How much do you look at the founding team or kind of the personality of that early company, whether you want to invest in it or not?

Brian Modoff 41:24

People say, you know, the founding team has to be everything or you don't do it. I don't necessarily agree with that. I have one company, I won't say which one it is, but the the founding uh team, the founder himself is a very smart man. He comes out of uh university. And so he really is, you know, he's done businesses before, but he, you know, he it's not his strength, but his technology, what he's developed, is incredible. So I invested in him anyway. Yes, it was hard initially, but then we've pulled in since then. We pulled in a CEO from my old shop that is extraordinary. And, you know, we feel like we have a real fighting chance now. So we've actually enhanced the team. So I think the first thing I would say with startups is you've they've got to have the right idea first. Look at the team is important, but you can add to the team. So my view is first thing you you need is I need to have an idea that is, is this a good market? Is this something, you know, you have to decide, is this a tool? In other words, is this a company that's really a tool that's gonna get bought by another company, like you know, like it's a test protocol or something. Well, that's a tool. Someone might pay money for it, but you're not gonna make a lot out of it because it's, you know, it's it's it's a niche. Some products, well, okay, this is gonna be a good fit eventually into another company. So then you're investing in it for MA. Because it's like I have a company that I, you know, that does timing chips, extraordinarily good timing chips. I don't normally invest in better mouse traps, but this one's exceptional. These are ex-broadcom guys, they're really good at it, and this company's gonna get acquired. And then there are companies you look at, like, yeah, this company could be an IPO. And I've got another one that's a metrology company that's doing really well. We solved SK Heinex's HBM 4 yield issue last year, and we got Name Supplier of the Year by SK Heinex, and now we have Samsung, Intel, Micron, and Global Foundries chasing us. So, in that company, given you know the way the revenue is coming up, that could be an IPO. And so, you know, but even in that company, I've, you know, I brought in a friend of mine who lives here in town, but he he used to run manufacturing operations at Motorola, and he's he's sitting next to the CEO helping the company grow and expand. And so you can, you know, you have to have a really good idea first. You can add to the team. You don't you can't have a weak team. I'm not saying you have a, but you do the team doesn't have to have everything in place. You don't have to have it all. I mean, you can add to the team, strengthen where the founders are weak, add people in those areas, and you can round it out and make it better. So I wouldn't use that. Some people say, oh, if the team's not there, I'm not there. Well, you know, the idea has to be there, the team has to be talented and all that, but you can add to that is the one change I would make to what some VCs say.

Klara Jagosova 43:51

I like that. Because even my own perspective, as I talk to some of my guests that are starting the journey and are still in the earth. Early stage, I always had the impression that the founding team is very important because you go through so much early on. How do you divide who's doing what and have a trust and are able to create the complementary skills? But the way you're presenting it, you're really looking at the technology and the special quality in the technology first, and then being able to be successful enough to where probably somebody like you actually can add and is adding obviously a lot of value because you know people in the industry. And so you can then pool perhaps the specific talent at the right time to kind of help advance it as you grow as a company to the next stages. So maybe you're looking at it through that lens.

Brian Modoff 44:39

I am because I look at these three companies I've already mentioned. That's exactly what we've done. We've added to them. We've brought people in to strengthen them and they're all moving. You know, one's doing extremely well, the other middle one's doing well. The one I mentioned earlier, where we brought a guy in from my old shop. Now we have a real fighting chance. So the technology that the guy developed is exceptional. It's it's incredible. But we needed someone like the guy that's now running the company. We needed someone like him in there to help shepherd it because the guy's done this multiple times, so he knows what he's doing. And so now I feel much better about our ability to get to an A round and maybe make this company into something.

Klara Jagosova 45:13

Again, reflecting back on your trajectory on spotting trends, winners, losers, are there any specific things, even to your maybe earlier anecdotes you mentioned, you picked the wrong stock. What have you learned that's kind of underlying things that people don't often realize are key to that success? Are there any specific like one, two, three things that you see these are a must or these are red flags when you come across

Leadership Red Flags In Tech

Klara Jagosova 45:41

them?

Brian Modoff 45:41

You know, it depends on where what stage the company's in. But you know, if you've got a weak leader in a company, that can really be detrimental. I'll pick on Intel. I mean, I I like Lipu a lot. I think Lipu is the right man for the job. But one of my metrics when I was an analyst is when you put a CFO in charge of a tech company, I would put a sell rating on the tech company because CFOs are not good CEOs in tech. I'm not talking about maybe CFOs work well in banks and other places, but in technology, CFOs as CEOs, bad idea because CFOs are risk-averse. They think more about cost, whereas a CEO has to make bets. You have to make educated bets. You have to gamble a little bit, you have to push ahead, you have to take chances. CFOs don't like taking chances. CEOs, that's their job. And in tech, if you don't innovate, you die. It just is the way it is. You fade into the look what's happened to Intel. They're not the same company anymore. Now, hopefully Lipu can turn it around. He's a very smart man. I like him. Having had two CFOs in Intel has been a really bad call. Don't do it. Well, when I was an analyst, if someone promoted the CFO to CEO, okay, sell rating. There we go. Bye. Good luck. Because, you know, it ain't gonna work. So I think having the right people in place with the right mindset is very important. The other is, you know, as an analyst, is don't fall in love with a company. You know, don't fall in love with a stock, I should say, not a company, because you get biased when you do that. You have to always be objective. Every quarter is a measure, and you have to measure it objectively. If you are just in love with a company, you know what? Your clients are going to figure it out too. It's like, oh, he just loves that stock. He will never downgrade it. He's in love with them. Uh, you can't do that. You've got to have keep an independent mind and call a spade a spade. And it's not always fun. Putting sell ratings on companies. When I was an analyst, some of them didn't like me much after that. And it's like, okay, well, you don't like me, but I'm doing my job. You know, it's not my job isn't for you to like me. My job is to call stocks. You've got to be careful about letting your emotion get too involved in your business decisions. So that applies to anything. But I mean, as an analyst, it applied to whether you you're so in love with a company you couldn't downgrade it. Sometimes you have to. And and frankly, for companies, again, back to the fact that companies don't really understand Wall Street. Well, the best thing companies can do is listen to downgrades and why, and try to understand it and see if there's a point they're making that you could agree with. Not to blackball the guy and say, you asshole, you downgraded my stock. Fuck you forever. You need to, you know, say, hey, uh, what's this person saying is some merit to that. And the other thing that they don't realize about an analyst is if, you know, we did this at Qualcomm, we had uh a guy that didn't like us for the longest time. Name is Stacy Rags and he's one of the best semi-analysts out there. And uh I said, you know, we need to keep Stacy close. He doesn't like us, but we got to keep communicating with him because eventually he might. We got to make sure that he understands where we're going, what we're doing, what our plan is. And we worked on him. He actually upgraded it, put a buy on it. He recently downgraded the company, but I mean that's a that's a different whole different story. We don't have time for that today. You work with people like that and you listen to what they're saying. You're creating you need to embrace your critics and understand what they're why they're critical of you and see if there's some truth in there. That oftentimes there is.

Innovate Or Die In Tech

Klara Jagosova 49:04

You talking about the big companies innovating and hedging their bats with the right investment technology, and you've almost taken a kick out of some of the big ones that aren't doing it nowadays, and that's why the technology is not advancing. I'll add the link to the episode notes so people can tune in. What are some of the big companies you see are doing things right now or the CEOs that you admire and are placing the bets in the right way and are steering the boat in the right direction?

Brian Modoff 49:33

I think in Wireless right now, we actually have a bit of a challenge, including my old shop. I don't see any of them really innovating the way they should be. I think one of the big challenges that tech companies have is defending their business models. As businesses change, sometimes the business model you had previously isn't going to work going forward. And so one of the things you're seeing with like Ericsson and Nokia and maybe a little bit of Samsung, definitely Huawei, is their resistance to opening up the interfaces and you know, doing anything, whether it's open open ran or some previous uh standards we tried to open up in interfaces, something called Opside, another one called Cypri, another one called ATCA. All of them failed. Open RAN's failing. And the reason is because the big companies, you know, they they're stuck in this model of we have to sell more base stations. We must sell more base stations. That's all they think about. That's where OpenGa's had a hard time previously because when you start doing things like routing traffic better and turning down power apply, maybe you don't need more base stations. Maybe you just need to use the ones you have more efficiently. That's what Opang does. And so with these guys, they, you know, their business model is around selling base stations. And it's it's happened in other segments. It's happened in switching and routing, where you know, you know, you got to sell the routers and such. And now we have white box routers. Now we're having software and white boxes are replacing routing. And so that's bad for Cisco. It's already bad for Juniper, it's already gone. Juniper's been bought. But um, you know, when the model changes, oftentimes the incumbents resist that change. They don't embrace it, they resist it. But eventually it gets them. Eventually it will catch up to these companies, and it already is. You know, that's one of the things NVIDIA has been doing. They keep innovating, they keep investing, keep buying, keep moving forward. They're not stagnant. When you were stagnant or you resist the change, as Intel has with x86, as Qualcomm has with mobile, no, no longer being a growth area. Uh, same thing with Ericsson and Nokia. If you resist change, then you become less relevant. And you can, in our industry, you can die. I mean, tech, the thing about tech is it has very sharp elbows. You can become an irrelevant company in a very rapid time frame, faster than you realize, because of the fact that our industry moves forward so quickly. And these we just leave you behind because all right, you're done. We're off to these guys who are doing well. Well, we're off over here now. And the investors will follow the money, they'll follow the growth. They're not loyal to you. Don't ever think that investors are loyal to your company. They may like your company and what you're doing, but if you're not performing, they're gonna sell your stock and move on to something else. So innovate or die. Back to that. When you're trying to not innovate or you're trying to block things because it affects your business model, you get in trouble.

Klara Jagosova 52:11

It does take a lot of time to tear an empire down. So I think they're every big company.

Brian Modoff 52:17

Not in tech. It doesn't take that long. No. Okay. So late 90s, we had Lucent, Alcatel, Nortel, DSC. We had several Japanese players. We had Ericsson, Nokia, Siemens. Now we have Ericsson, we have Nokia, which is an amalgamation of several of the companies I already mentioned. We have Samsung, who wasn't even part of that equation back then, and all those other guys are gone. And Huawei. And they all the rest of them are gone. They're gone. They don't exist anymore. So, and that wasn't a very long period. Over a period of a decade, they disappeared. All of them disappeared in in less than a decade. So, no, it can happen much faster than people realize. So, tech is not a friendly place when it comes to getting stagnant. If you get stagnant, you get killed.

Nokia’s Reinvention Playbook

Klara Jagosova 53:04

Well, now Nokia obviously changed the game with pairing up on the ARN with NVIDIA, which I think was one of the smartest things that had to do because they were obviously the underdog losing their market share. And so it almost became a lifeline or game theory where they had to.

Brian Modoff 53:22

It is a lifeline, actually. I view that. I mean, the I met the new CEO of Nokia at the uh UBS tech conference in uh in Scottsdale in in late November, and I met the new CEO of Nokia. I like him. He's not out of the industry, which I think is helpful, and he's not Finnish, which I think is helpful too. Sometimes you get this mindset, there's nothing wrong with Finns. I like friends that are Finnish. I they're they're really good people. I enjoy them. But uh, you know, sometimes you can get this mind block from everyone thinking the same. And so you have a new guy in there, uh, he's taking them in another direction. We'll succeed, we'll see if they succeed, but I will highlight to you that out of all the ones, the one that has changed more often than any of them is Nokia. They used to make tires. They used to friggin' be a lumber company. I mean, they, you know, they made cell phones. They don't make cell phones anymore. So they're migrating yet again. I don't know that they'll be ever the size that they were when they were the dominant handset vendor. But if any company has changed their stripes and succeeded again, it's that one. Ericsson, not so much. Ericsson's kind of, they're still Ericsson. They're the same company they were back when uh can't think of his first name, but his first mobile phone was actually these two long wooden sticks that he would put in his car and he'd drive up to a telephone line, hang the sticks on the line. There was copper on the ends of it, had wires coming down, he could make phone calls from wherever he was. He had to carry sticks around to make his phone calls. But I mean, that was the first mobile phone. It was an Ericsson guy. Uh, but you know, they're still more or less the same company. They have not changed, and I think that may work against them.

Klara Jagosova 54:50

Well, they just recently celebrated 150 years, so definitely a company that's been around for quite a while. And fun fact, Apple recently celebrated 50 years. So even that one century over, I ponder how it does or doesn't make a difference, especially now, maybe going back to the AI and being built with the AI era. Actually, one of the things, even in the shop that I'm in, we're seeing, especially the past few years. I'm curious how you look at it building a company and adding AI or flavor of AI for improved efficiency, productivity, optimization, you name it, whatever the goal is of that company that's striving for, has drastically changed whether you were even five, 10 years older and how you have built stuff back then, versus if you were to start now from scratch and build with the current tech and the AI advancements that even happened in the past six months or a year or two. Would you agree with that, Brian? Or how do you see as the difference? Is it more of just a mindset and tech shift and ability to embrace something new?

Brian Modoff 56:00

I mean, is is AI accelerating things? Is that the question?

Klara Jagosova 56:03

Yeah, and and just how companies adopt it successfully or not, is do you see a difference?

Brian Modoff 56:10

Yes, I think it's gonna matter. Like I said earlier, our hard tech, we benefit from it, leveraging AI. But you know, doing it correctly and and being early with it is gonna give you an advantage over others that don't. If they, you know, it's something I would not resist. I would try to look at it and how is it gonna help my company? This company I talked about earlier that's essentially a spectrometer the size of a camera and your cell phone. We're putting an NPU behind it because yes, it's it uses nanowires to read light and give you data. Like we can detect fentanyl on a drug, we can detect canola oil and olive oil, we can do all kinds of things with it, but we need an NPU, we need AI behind it to do the processing. So we have to leverage it. And it's actually an it strengthens, as I said, it strengthens hardware. So it is something that has to be used. And it's not a nice to have, it's a must-have in this day.

Klara Jagosova 56:56

And just to kind of drill down on that example, and do you see that the companies starting now have significant advantage? Because you're starting from a clean slate, versus let's say companies like even Ericsson's, Nokia's, even Apple's been around now for half a century, actually. How do you see that?

Brian Modoff 57:12

I do think that younger companies tend to adopt new technology quicker. They're more familiar with it, you know, because one of the things about older companies is they end up building what we call legacy systems over time. Microsoft is guilty of that because they're using AI, but some of their stuff still sucks because it's they got a lot of legacy behind it and just it's slow. Apple, Apple spell check is awful. I mean, absolutely awful. And it hasn't gotten any better. AI has not made it better. It's only made it worse, actually. And again, these are companies that are big. They have legacy, tons of legacy code sitting there. They want to keep supporting that legacy code because it gives them backward compatibility, but that backward compatibility ends up being their Achilles heel. And younger companies come in, don't have to do all of that and come with a cleaner slate. And it's generally more efficient, faster technology. Like I said, you know, in our industry, it's a sharp elbow's industry. You can become irrelevant. So you've got to stay up. And sometimes you've got to cut it off. Sometimes you've got to make, look at I'm not going to keep supporting this legacy. It's holding me back. I have to end life it and move forward. And you have to make hard decisions because you're going to piss off some of your customers doing that. I mean, there's still people running around with Windows 2000 in their factories. And it's, you know, I mean, geez, come on. You know, you have to, at a point as a company, decide how much of this baggage am I going to keep dragging on with me because it eventually becomes an anchor, or am I going to cut it loose and try to make some shifts? And those shifts can be dangerous too, because, you know, I'm not saying it's easy. Those shifts can be dangerous because you're pissing off some customers and maybe your new customers aren't going to adopt it like you thought. And then you become irrelevant. Oh, well, swing in a mess. You also, if you don't try to do something like that, you know eventually what's going to happen when you're dragging too much legacy along. It just becomes such an anchor that you're stuck. So you do have to innovate, you have to change, and it's not always easy, but it's necessary. Our industry does not sit still. It's always evolving.

Klara Jagosova 59:04

At the same time, at least from my limited observation, I feel especially in the big companies, you get punished more for breaking things or making jumps. Even if you wanted to make a change and the change doesn't turn out, that's where you're at risk. So I think by nature, most of the big corporate cultures thrive on not making a courageous choice because if you don't do anything, is the status quo is actually safer versus the change. While the tech is changing to a point quite a bit, is there anything you have seen throughout again your experience industry, because you've been at the edge of innovation that keeps people from falling behind, not following the innovator's dilemma? Or can you train that innovator mindset, you think, or is it the leader really you have to select the leader who leads the company to keep that mindset and then thrill it through that organization?

Why Telcos Struggle With Risk

Brian Modoff 1:00:04

I think it depends. Let's compare enterprise versus telco. Enterprise, you know, embraces change. Enterprise is always willing to try the new software, try the new piece of gear coming in. They're always willing to do that. And they're not afraid to change suppliers. Telcos, they keep going back to the same list of vendors. They will try new stuff, but they'll never deploy it. Because what they worry about, and this is something that the I blame senior management for because they punish people for taking risk. You know, if you have you install a new, let's call it a new router, or you install a new control plane element or something, and then it it screws up your network for a while and you and your network goes down. Well, that person that installed it, you know they're going to get fired. In enterprise, that's not necessarily the case. So, okay, we had a problem. What do we have to do to fix it? Enterprises have to, they, you know, their competitors are also trying the new technology, and so that you know they have to stay up with them, so they have to be willing to try that. But they're willing to accept risk. The telco industry is not willing to accept risk. They will not, and yes, there's regular, they say, oh, well, the regulators won't let us, and all these other things, you know. It's like, well, I think those are excuses. Yes, regulators can can be a pain, but the telcos complain about a lack of innovation in their space, yet when companies try to innovate for them, those companies die on the vine waiting for a PO from these telcos because they'll test the hell out of your stuff, make you think that they're in love with you, and never buy anything. And if you want to scare a VC, say, hey, I'm designing something for the carriers. I want to sell it to them. They'll run away from you as fast as they can. I won't. I have a couple, I'm I'm willing to play in that game a little bit. I have a couple that are in that area, but I, you know, they're measured risk and they're certainly a small part of my portfolio, but I at least understand the beast that I'm selling into. But if you want innovation in your industry, you have to support it. And if you're not supporting it, don't be surprised that it's not coming your way. Because VCs aren't going to back companies selling into industries that don't support innovation. And right now I think the telco industry

AI Ethics And The Kill Chain

Brian Modoff 1:02:03

is guilty of that.

Klara Jagosova 1:02:03

So, and then now a few closing questions. Innovation bets, you have been placing them for quite a while. I know you've shared a lot of trends of what you're excited about, but anything specific since you're investing really at the intersection of AI, tech, there's obviously the physical AI trend that seems to be convergence of some of your bets. Anything you want to point people out towards what to look out for, or maybe advise where to place their bets as well.

Brian Modoff 1:02:29

As I said earlier, you know, how AI benefits physical hardware, that's definitely an area to explore as interesting. I think there's still a lot to come there. I think AI and medical is going to be interesting. AI in military is going to be very interesting, very interesting and somewhat scary. I do think that uh it's going to be a very pervasive technology that's going to spread across pretty much every industry. And learning how to harness it's going to be very important for the industries, for the industry players. And I think what's scary for them, a lot of them don't even understand it, let alone how am I going to deploy this stuff. So it's going to require that they get educated and learn because if they don't do it, their competitors will. It is changing things and it has a dramatic effect on things because AI never sleeps. You can put it in and have it run on your data and crunch it the hell out of it and pull insights out that you may never have even thought of, but you have to learn how to leverage it first and not be afraid of it. And it isn't going to take, I don't see Skynet coming anytime soon. I know some people, oh, Skynet's on right around the corner. I don't see that. What I don't want to see though is I don't want to see them remove humans from the kill chain. I do not want to see drones deciding I'm going to kill this person because I'm a drone and I can do it. I think we always need to have human intervention whenever we're deciding to take a life. We need to have humans making that decision, not machines.

Klara Jagosova 1:03:48

So you've kind of shared a little bit of the fears. Other than that, and you previously mentioned you believe AGI is way too far still. We still have ways to go to get to full self-driving cars, but anything else you want to highlight that keeps you up at night, AI or non-AI related.

Brian Modoff 1:04:06

I think we need to really appreciate about our country and not do anything to fuck up is our venture community. Sorry, I curse a little bit, but it's just something I do these days. After my divorce, I decided I curse more because I can. On venture investing, you know, the one thing I don't want to see us do is kill the golden goose. I mean, the reason we are unique, there's only one other country that's remotely close to us in the way that we do uh venture investing, and that's Israel. Our venture industry is why we are the dominant economy in the world. And you look at the largest market cap companies in the world, all are in the States. A lot of them are tech companies, and all of them were startups at one point. We can never threaten the venture community. That and certain kinds of private equity, like growth equity, like what Summit's growth equity is the difference between private equity and growth equity. Growth equity to me is very positive. Private equity can or cannot be. If you're loading companies up with debt and torturing them and making them pay down debt because you're trying to get leverage on the deal to make your ROI, that isn't necessarily fun. But if you're investing in them to grow them to maybe eventually take them public, which is what Summit likes to do, uh, I think you're you're like a VC, you're contributing to the growth of the industry. You're not torturing a company, you're squeezing the shit out of it. I like that kind of investing. And I think that we have to continue to support that, that kind of investing through regulation, taxes, et cetera, because we are who we are because of it. And we can't forget that. So to me, that is one of the more important things that has to be realized, and the politicians have to stay away from it. They politicians can screw up a lot of shit, but this is one I don't want to see them screw up.

Klara Jagosova 1:05:44

Investing and yeah, driving innovation certainly seems important now, especially to your point how tech and government we're so much technology driven. Technology is almost everything nowadays we do. I actually heard you talk about it on some other talk earlier that I was tuning into.

Brian Modoff 1:06:00

Look at us in Europe. I mean, one of the big differences, I mean, our economy is now twice the size of Europe. The big reason for that is the fact that we have a venture community that's willing to invest and take risks. There's some of that in Europe, but they're also more adverse to losing. They're adverse to losing their money. And you can't be. I mean, I have a couple of them that are that I have money in. They're probably going to go under. I have one, I'm not going to say which one it is, but probably it's probably going to close up. It's like I'm going to have to write that off. It's like, all right, but I I knew that going in. I knew putting money in that company, there was a risk in it. And some of the ones I invested in it are probably not going to make it. I'm fortunate, I think several of them will. But uh I'm willing to accept that risk. You have to be willing. If you invest in startups, you have to be willing to take a zero and know that that's coming. And just that it's going to be part of what happens to you. You have to tolerate risk. And we cannot be, as a society, we cannot become risk averse.

Advice For Young Builders

Klara Jagosova 1:06:50

Reflecting on your career and knowing what you know now, are there any specific things, advice you would give to yourself, that you had to learn the hard way?

Brian Modoff 1:07:00

I would just say keep persisting. Because that's kind of where I got where I am. I was persistent. You have to be persistent. If you're going to get anywhere in life, you've got to be persistent, because you're going to get knocked down. You're going to get knocked down several times, but you got to get up and go right back at it again. If you're not persistent, you know, that's that's that's part of what separates people is persistence. And that's if I could tell anything to anyone young, is like just keep going. Don't give up. Be persistent. Don't let them don't let the doubters get you down because there always are going to be doubters. You just got to keep going right through them. Keep going. You know, some bit. So you look back and say, Oh, go to hell. I succeeded anyway because I didn't give up. So just don't give up.

Klara Jagosova 1:07:37

I love that. Any other flavor you would add nowadays, anybody who's graduating now, given even the AI trend, the fear of I'm not going to get a job because they'll hire AI agents in front of me. Obviously, the persistence is for sure, trying to get in and find a way to maybe get your first job. But anything else in regards to even technology, you would want to steer them towards.

Brian Modoff 1:08:00

I would say instead of getting a degree in software, get one in electrical engineering. Be an MSE. My older son's an MSE. It's not an easy one. I saw the work you had to do to get there, but it's worth it. Get a degree in electrical engineering or mechanical engineering. You want to be in robotics, mechanical engineering is a good way to go. So get an engineering degree. If you want to, you don't want to worry about AI, get an engineering degree. You know, software, it's going to be parts of software that are going to still matter. AI is not going to take it all. I don't, I don't believe that. But, you know, if you really want to be certain that you're going to have employment in the future, get an engineering degree.

Klara Jagosova 1:08:30

And then kind of broader, a bigger picture, anybody who's listening, founders, investors, engineer operators, what would you inspire people to be doing more of or less of?

Brian Modoff 1:08:40

I think one thing they all need to be more of is to make sure that they're leveraging AI the way they need to in their business. I mean, that's that to me, that is, you know, one of the things that right now has to be top of mind. One thing I would say about running a business is cash is king. One thing I've learned about being a Qualcomm and being in industry is when you're a cash generating machine, you live to fight another day. The market can go down and you can struggle, but if you're generating cash flow, you're going to be around. When the things turn around again, you're going to be around. If you're leveraged to the hilt and not generating cash flow, and there's any hiccup in your system, you could be very vulnerable. So be in a business that generates good cash flow is to me, because cash is king and gives you the right to fight another day. And that's what you want to be. Sometimes industries go through cycles. If your business is generating cash flow, you're going to be on the other side of it. Some of your competitors may not be, but you will be. Don't forget that.

Klara Jagosova 1:09:36

Yeah. Well, fight to live another day and I guess preserve your with innovation. I like it.

Disconnecting And Closing Requests

Klara Jagosova 1:09:41

That sums up our conversation quite well. Brian, what's the best way for anybody who wants to reach out and connect with you with your permissional at your LinkedIn to the episode notes?

Brian Modoff 1:09:51

I think LinkedIn is the right way. I'm on LinkedIn. I'm active there. I look at it pretty much every day. All of my investments are in LinkedIn. If you want to look at any of them, there's a link to the website. You can go look at them. And if you have any questions about any of them, let me know. I don't have a website. I just use that as my method.

Klara Jagosova 1:10:08

Yeah. I've seen the whole list. It was impressive. I had to do comment minus several attempts and actually get the full scroll of everything you have your hands in, which is really impressive background. Makes me ponder how you do all you do. Actually, one question I had here, maybe on the closing. How do you disconnect between all your busy work and life you've described here and journey you've been building? Is there a favorite way for you to step away and not think about the technology? Or how often do you do that?

Brian Modoff 1:10:38

Uh yeah, I like to listen to music. I take my dog for a walk and listen to music. It's it's uh how I like to relax or get in the pool. One of those three things. And definitely put the phone down. Gotta put the phone down. You keep the phone in your hand, it's gonna keep your mind going. You gotta put it down, walk away from it, leave it alone. I'm gonna be on vacation in June. And I told Summit, don't try to reach me. I'm gonna be digitally disconnected, do not try to reach me. So digitally disconnect at least a couple of weeks of a year and put the phone down. And I mean, I'm that industry is what made my life, so I'm happy about it. But put the damn thing down and listen to some music, read a book, go for a walk, cook, do something like that, and enjoy yourself. But you know, if you keep that phone in your hand or nearby, it's gonna bother you, get in your face and let it go. Detox from tech once in a while.

Klara Jagosova 1:11:27

Yep. I personally have a problem with that, just leaving it behind. So going for a walk with my dog, it's actually nice practice just to leave it at home even for 30, 45 minutes. Obviously, Austin is town about music and art and comedy. What do you like to listen to? Anything specific?

Brian Modoff 1:11:44

I like hard rock. So actually, my my son, my older son has got a band called Blue Octavo. I like listening to their music. It's of course it's my son, so I have a bias, but interesting combination. He's an MSCE, he's the lead singer and plays guitar. His lead guitarist is a PhD in physics. So two super nerds, but they play good rock. I mean, I like their rock. I like listening to a range. I like the strokes and the killers and phanagram and a few others, and I like some of the old stuff like the Eagles and such. So I listen to a range of rock, sometimes jazz, and it's fun. You know, I got speakers in every room in this house, so I crank it up. It's loud in here sometimes. It's fun. You know, then go to the gym. You gotta work out. Gotta take care of yourself.

Klara Jagosova 1:12:24

Do they play in Austin? You need to send me a link. I would love to go check them out when they play. And obviously, I can tune in online.

Brian Modoff 1:12:30

They haven't done any live. They're right now, they're they're on Spotify. And they're also on um I I like this other one. It's a real interesting, it's titled. They're on those two. They haven't played any live yet. They play in my guest house and they go in there and play sometimes, so it's fun.

Klara Jagosova 1:12:44

And last question you mentioned, June vacation. I'm just planning my vacation. Do you uh know where are you heading? Do you have a plan already?

Brian Modoff 1:12:51

Oh, yeah. I'm going to go sit on the beach in Saint Tropez, drink some red wine, watch the girls go by in bikinis and read my books. That's what I'm going to do for a vacation.

Klara Jagosova 1:13:00

That sounds like a great plan, and I'm sure leaving the phone behind and just enjoying awesome view. Sounds perfect. Excellent. Well, thank you so much, Brian, for your time. And uh, this was fantastic. If you enjoyed this episode, I want to ask you to please do two things that would help me greatly. One, please consider leaving a review on Apple Podcasts, Spotify, or any other podcasting platform that you use to listen to this episode. Two, please share this podcast with a friend who you believe might enjoy it as well. It is a great way to remind someone you care about them by sharing a conversation they might be interested in. Thank you for listening.