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Launchpad

Dan Goldin shows off the artwork in his office suite: large photos of a skier barreling down a steep slope, a surfer riding a giant wave and a sailor standing precariously on the high side of a small sailboat.

There is a lesson here, Goldin said. “Failure is acceptable in this company.”

The company is KnuEdge, and it specializes in neural computing. Goldin is founder and CEO. So far, private individuals have put $100 million into the venture.

Goldin’s previous employer did not consider failure an acceptable option. The 75-year-old Goldin worked as the top executive at NASA from 1992 to 2001, serving three presidents. He also spent 25 years at TRW Corp., where he developed defense and space technology.

A tolerance for failure at KnuEdge is one reason why the business is not based in Silicon Valley, Goldin said.

During a conversation, he repeatedly brought up the idea of the patient investor, one who can take some failure along the way. Silicon Valley is not that way, Goldin said. The “expectation for financial rewards is certainly not 12-13 years” — the minimum time it will likely take for KnuEdge to offer a return.

So far, KnuEdge has been in business 11 years, mostly under the name Intellisis Corp. and largely under the radar. The company has booked $20 million in revenue over the last five years — its Fortune 500 customers have not been identified — and it has yet to be profitable.

By now the business is bringing promising products to market.

“No one could have done this but Dan,” said Larry Smarr, one of Goldin’s collaborators on the business project. Goldin collected the $100 million for the venture on the strength of his resume and his personality. “He gave confidence to patient capital,” Smarr said.

Better Biometrics

The business has two divisions.

Its KnuVerse software division offers what it calls military-grade voice recognition and authentication technology. Voice can be one of the most powerful biometric identifiers available, the company said.

One thing that sets it apart, Goldin said, is that the algorithm can make sense of speech in noisy environments.

The technology has applications in computer security, banking and health care, among other applications.

Hospital patients “get the wrong drugs sometimes,” Goldin said. Patients could simply say a few words in front of a computer running the software for some positive identification, he said.

Goldin acknowledged there could be military and intelligence applications in the voice recognition technology.

In addition, the Knupath division of the company produces a 256-core microchip, called Hermosa. The new chip is “fabulous for audio,” Goldin said. The chip is designed to do something called heterogeneous sparse matrix calculations, the CEO added, requiring a new sort of algorithm. The technology may one day process video and make sense of unstructured data.

The Knupath division calls its processor technology Lambda Fabric. Company officials said it can provide “groundbreaking scalability, latency and workload performance in next-generation data centers.”

The processor’s design is revolutionary, said Smarr, an academic and a longtime associate of Goldin’s who leads a research unit at the nearby University of California campus. Smarr directs the two-campus California Institute for Telecommunications and Information Technology, known for short as Calit2. He has consulted with Goldin on his project since the beginning.

KnuEdge and Smarr said the architecture of the new chip is a departure from common chips that go by the initials GPU, CPU and FPGA.

The Knupath chip is “a unique chip to specifically accelerate deep learning for artificial intelligence applications,” wrote Karl Freund, senior analyst with Moor Insights & Strategy.

“Some speculate that the days of the general purpose processor, which is found in virtually every computer and smartphone today, may be numbered — or at least that they will now have to share their shelf space with more specialized chips that do only one thing, but do it extremely well,” Freund said.

And KnuEdge is not alone in the project. In fact, another San Diego company Nervana Systems is developing a chip to accelerate deep learning. Nervana also has an office in Palo Alto. Naveen Rao is CEO and co-founder.

KnuEdge’s technology could ultimately change the way people interact with computers, KnuEdge officials said. Goldin offered the possibility that second-generation natural language understanding, which could place words in their proper context, could get people to ultimately use voice — not a keyboard — to give computers instructions.

Brainpower

The KnuEdge office also has photos of the International Space Station and the Hubble Space Telescope, which Goldin oversaw in his previous, high-profile job.

Goldin originally joined NASA in 1962 and worked on nuclear-electric propulsion technology. Then came 25 years at TRW. He served as vice president and general manager of the corporation’s Space and Technology Group in Redondo Beach. After being named NASA administrator in 1992, Goldin oversaw the redesign and delivery of the International Space Station, put a new “contact lens” on the Hubble Space Telescope and put a record number of people into space without incident. And he cut the budget 33 percent without layoffs.

Goldin has been in San Diego since 2002, and he set up his current business in 2005.

The technology is influenced by the way the brain works.

“I knew that neurobiology was going to be at the core of my business and this was neurobiology heaven,” Goldin said of San Diego, mentioning the University of California, the Salk Institute for Biological Studies and other institutions on Torrey Pines Mesa. There is also the Neurosciences Institute, where Goldin befriended founder Gerald Edelman. Goldin recalled that he helped Edelman raise $25 million. In return, Edelman gave Goldin a crash course on neurobiology.

“San Diego is big in biotech, biomed. We kind of operate on the fringes of those.”

There was also some under-the-radar lobbying for the former NASA administrator to set up shop in San Diego. Goldin recalled that businessman Linden S. Blue as well as former San Diego Regional Economic Development Corp. CEO Julie Meier Wright hosted a luncheon at Blue’s business, General Atomics, and made a pitch for him to come to San Diego. Wright and Goldin had worked together at TRW — which eventually became part of Northrop Grumman Corp. (NYSE: NOC).

“I was just blown away by the business environment and the opportunity in San Diego,” Goldin said.

The company is currently a tenant at the General Atomics office complex on Torrey Pines Mesa.

During its stealth period, the business hired David Eames and Doug Palmer — two early employees of HNC Software, which applied neural network technology to the problem of credit card fraud. Fair Isaac & Co. bought HNC in 2002.

“Here are two guys that are the pioneers of neural networks, and I have them in my company,” Goldin said.

By now KnuEdge has 28 patents issued, 41 patents pending and 45 more in process, the CEO said. First-generation products are on the market, while second- and third-generation products are in the works.

The company also has two more offices: Redwood City (yes, the company is in Silicon Valley) is where it bases KnuVerse and its Knurld cloud-based application programming interface. Austin, Texas is where it concentrates on the chip and server business.

Reviewing photos in another room of the office, Goldin recalls sending John Glenn into his second trip to space at age 77. There is also a photo of his private jet from the NASA days. It is “the only perk I miss,” Goldin said.

What hasn’t changed is obvious. He still works with some very bright and ambitious people.

So is the former NASA administrator really the smartest man in the room?

Goldin, who has surfed with Linden Blue and long ago broke five ribs while on a surfboard, acknowledged in an interview that he does have a hard time learning lessons.

Nine months ago, a board adviser suggested he try stand-up paddle boarding. For some reason, the men passed up the calm waters of Mission Bay and Goldin tried to learn on water that had some sizable swells.

“And it was not a pretty picture. I fractured my ribs …,” Goldin said. “You see, I push things to the limit in everything I do.”

“Didn’t you take the red eye that week?” chimed in Kate Dilligan, Goldin’s executive vice president.

Indeed he did, Goldin said, adding he had a hard time sitting on the flight without pain. Both of them laughed.

“But that’s life,” the CEO said. “You got to push the limits in life.”

KNUEDGE

CEO: Daniel Goldin

Revenue: $20 million over the last five years

No. of local employees: About 100

Investors: Undisclosed private investors

Headquarters: Torrey Pines Mesa

Year founded: 2005

Company description: Producer of patented voice recognition algorithms and microchip technology

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