Transformed a plateauing analog/mixed-signal EDA company into a high-growth category leaderwithout raising capital—and delivered a premium strategic exit to Mentor Graphics (Siemens).
Tanner EDA had proven technical capabilities but had hit a wall. Revenue was flat, the team was stretched thin, and the market was passing them by. Worse, there was no money for a turnaround—everything had to come from the existing budget.
As CEO, I led a complete repositioning of the business: we killed what the team thought made us special, charged for things we’d been giving away, and focused everything on three emerging markets the big players were ignoring.
Record 5-year CAGR, 50% international sales growth, expanded EBITDA, and a strategic acquisition at a multiple that surprised even our board.
Most founder-led software companies plateau because what got them to $15M won’t get them to $50M. Tanner’s transformation shows how disciplined focus, hard pricing decisions, and operational discipline unlock hidden value—even with no additional capital.
When I joined Tanner EDA as CEO, the company was stuck. Revenue had been flat for three years hovering around $15M. They had customers in 47 countries, solid technology, and a 20-year reputation in analog/mixedsignal design tools.
But the EDA market had consolidated. Synopsys, Cadence, and Mentor owned the big accounts. Tanner was caught in no-man’s land—too small to compete on breadth, not focused enough to own a niche.
The founder knew it. The team felt it. But nobody knew what to do about it. And we had zero budget for the fix.
After three months of customer interviews, market analysis, and brutal financial reviews, the problem became clear: we were trying to be a full-service EDA provider on a specialty tool budget.
We were chasing deals in automotive, consumer electronics, aerospace—anywhere we could get a purchase order. Sales had no focus. Product development was a wish list driven by whoever yelled loudest. And we were undercharging for everything because we were afraid of losing what little momentum we had.
The team believed our edge was breadth—supporting multiple design flows, offering free PDK development to win deals, keeping prices low to stay competitive.
They were wrong. That strategy was killing us.
I told the team we were killing half our product roadmap and walking away from market segments that represented 40% of current revenue. We were going all-in on three emerging areas: IoT devices, MEMS sensors, and photonics.
The room went silent. Then the pushback started.
That one nearly caused a mutiny. Our VP of Engineering said we’d price ourselves out of the market. Sales said customers would never pay it.
But here’s what the data showed: in the segments we were targeting, our customers were burning money trying to use tools built for Intel-scale processors to design IoT chips that needed to run on a watch battery for two years. We weren’t solving a nice-to-have problem. We were solving a hair-on-fire problem.
And companies pay real money for that.
We walked away from anything that wasn't IoT, MEMS, or photonics. Built a multi-year product roadmap specifically for analog/mixed-signal workflows in those segments. Every feature request got filtered through one question: "Does this help an IoT designer ship faster?"
Increased license fees by 80-120% in target markets. Started charging for PDK development and positioned it as strategic consulting, not a sales concession. Lost exactly two customers. Gained 30% more revenue per deal.
Hired a VP of Sales who actually understood software sales, not just engineering relationships. Rebuilt our channel partner program with clear economics—no more handshake deals and favors. Implemented real pipeline management and forecasting.
Created new leadership roles. Exited people who couldn't make the shift from "build cool tools" to "solve customer problems profitably." Introduced KPIs that actually mattered: win rate in target segments, average deal size, customer acquisition cost.
Our target customers were manufacturing in Asia. We stopped treating international as an afterthought and built real distribution partnerships with teeth—training, co-marketing, revenue commitments.
Everything was funded from existing cash flow. No outside capital. No loans. We bet the company on getting focused and executing.
Twelve months in, we closed our largest deal ever—$800K with an IoT chipmaker who told us they’d evaluated everyone and we were the only tool that understood their world.
Eighteen months in, revenue growth hit double digits for the first time in five years. International sales grew 50%. Our pipeline had real shape to it—we could actually forecast.
Two years in, we weren’t just growing—we had a category position. When semiconductor companies thought “IoT design tools,” they thought Tanner first. We showed up in analyst reports. We got invited to speak at the conferences that mattered. Mentor Graphics noticed. So did their competitors.
The acquisition happened at a multiple that made our board very happy. The founder called it the validation he’d been working toward for 20 years.
Tanner didn’t need more features or more customers. It needed to stop being everything to everyone and start being essential to someone.
The team thought their edge was flexibility and service. Actually, their edge was deep expertise in analog/mixed-signal design for power-constrained applications—but they’d buried it under a pile of unfocused initiatives.
Once we got clear on where to play and how to win, the operational fixes became obvious. Once we charged what the value was actually worth, we had budget to invest in what mattered.
The hardest part wasn’t the strategy. It was getting a team that had survived for 20 years by saying “yes” to learn how to say “no.”
If your software business has strong technology but flat revenue, the answer isn’t working harder. It’s getting focused enough that customers seek you out because you solve their specific problem better than anyone else.
And then charging accordingly.
Guiding B2B software companies through repositioning, repricing, and exit preparation consistently reveals the same truth: disciplined focus and operational execution unlock more value than most founders realize is there.
