Guest blog: Jay Vleeschhouwer

Posted on August 11, 2009 by paulmcl

I’ve known Jay Vleeschhouwer since my early days at Cadence since I somehow ended up with the role of being the technical contact for financial and industry analysts. He has been a research analyst since 1980, has been following the technical software industry for the past two decades. He was most recently a managing director of equity research with Merrill Lynch in New York. Here is his summary of DAC.

DAC 2009: a Wall Street perspective

Industry & technology trends: In the 2009 show, there were a set of new and not-so-new issues (comparing with DAC 2008) that are worth mentioning namely:

  • Analog/mixed-signal, a.k.a. “custom IC”, a vital franchise for CDNS (usually a fourth or more of its revenues, and probably an even higher portion of its earnings, and where SNPS has made its at-long-last entry);
  • Power (the tools and methodology for which have only grown in importance in recent years, although “power analysis & optimization” is relatively small as a discrete EDA reporting category). Power considerations will need to be taken into account throughout the design process (with implications therefore for how the main vendors enable and package their tools). As MENT noted in a product introduction breakfast on July 27th, “system-level optimization” has the biggest impact on power consumption”. Related to that, MENT’s main announcement at the show was of “Vista”, its “architecture-level” power platform.
  • System-level design (representing higher level of abstraction, which is usually a rationale for new growth in EDA). This has now become a $200M+ reporting segment, in which MENT believes it has about a 40% share; and, somewhat more esoterically,
  • 3D “stacking”, a new technique for designing and packaging ICs (a big deal for ST Micro for instance, as it publicly noted).

Industry revenues, product mix, and bookings:

  • According to the latest EDA Consortium (EDAC), EDA license, maintenance, and services revenues were $1.051 billion in 1Q09, down 10%. Not surprisingly, the largest decline was in “license & maintenance”, down 13% to $850 million. The three largest vendors accounted for 70% of the total industry for the quarter, towards the low-end of the 70%-75% range. The difference was largely attributable to the revenue decline at CDNS.
  • According to the EDAC data, the five largest product categories were (remain): IC implementation (11% of industry revenues); PCB (11%); Logic Verification (13%); Analysis tools (8%); Synthesis (6%); RET EDA (5%) and Analog/mixed-signal simulation (5%), or a total of 59%. Of these, the only one that grew in the most recent quarter was RET.
  • For the trailing twelve-months ending 1Q09, the industry revenue was $4.484 billion, down 12%, vs. the trailing-twelve months ending 1Q08, including a 17% decline in license & maintenance revenues for the industry.
  • Over that same period, the combined product bookings of the top three vendors declined ≈35% to about $2.05 billion, mostly because of the plummet at CDNS and the comparison with the large SNPS renewal at Intel in mid-2007. The 2Q data will come out once MENT, LAVA, and SNPS report their July 2009 quarterly results.
  • I’m estimating combined revenues for the top 3 for 2009 of about $3.033 billion (down 5%); combined non-GAAP operating income of about $315 million (or 10% of combined revenues; combined cash flow of under $250 million; and combined bookings of about $2.01 billion, with a weighted average duration of over 3 years.
  • Anecdotally, no customers with whom I met at DAC spoke of planning to increase run-rates, with the preference being apparently to keep even the best-performing suppliers “stable”. Indeed, the disparity between gross bookings and average durations might imply some lower run-rates in some cases when looking at aggregate bookings for the main suppliers.

 Other industry odds-and ends:

With the possible further consolidation of semiconductor companies, or parts thereof, the issue of the transferability of licenses (or the lack thereof specifically) may become an important issue for investors, since there may be instances of some new bookings or re-bookings in some circumstances, depending on scenarios like: Parent company licensee merges with another parent company licensee; Divisional licensee is spun off into a new joint venture entity.

In a keynote address by TSMC’s v.p. of design & technology platforms on “Overcoming the new design complexity barrier”, there were a number of interesting observations and recommendations for the industry (presumably premised too on what would be good for TSMC): the industry is at a “cross-roads” of complexity and affordability; there is a widening gap in terms of the growth of wafers produced and the number of tapeouts (due to growing complexity and cost per design), necessitating a need for more design/manufacturing collaboration, more reuse, and the need for avoidance of redundancies.

At a DAC “management day” panel with senior design executives from Intel, LSI, ST, Infineon, Global Unichip, TI, and Freescale, there was little or no gratuitous EDA-bashing but instead quite reasonable observations about how best to go about the business of designing chips in a timely and economical manner. There were some noteworthy comments and responses on questions having to do with: 1) What they want from their EDA vendors: optimize across different domains (Intel), analog (LSI), chip/package co-design (ST); 2) DFM: unlike design-rule checking DFM is not “black & white”, OPC is a “moving target (ST); very important, developing their own tools (TI). There was also some discussion about (the need for) “software management tools” for design. There is an important difference of scale here as the latter market has order of magnitude more users than are likely to be available in EDA, notwithstanding the extraordinary complexity of chip design. There might finally be a product opportunity here.

Cadence Design Systems. As a very general statement, CDNS’ technical position remains steady, though some customers concurred with the notion that the kind of relative steep improvement we saw from 2001-2006 (pursuant to CDNS’ successful acquisition integration strategy) has run its course. CDNS’ software bookings implosion last year (about -60%) and the further decline this year (down by a further mid-teens percent to under $400 million, which would be, quite unusually, less than MENT’s this year), don’t have much to do with technology (unlike the situation in 1999) so much as semi/industry cyclical reasons and of course the contracts renewal abyss. Given the depths of the recent bookings decline it seems unlikely that CDNS will get back to “normal”, i.e., 2005-2006, annual software bookings levels before 2011, if then.

Mentor Graphics. The main thing Mentor talked about at last year’s DAC was integrating the Calibre physical verification/DFM platform with its Olympus-SoC place & route system (acquired via Sierra Design in 2007). There has since been progress here, which is quite important (see too TSMC’s Reference Flow 10 announcement). For the year, MENT might be able to eke out a small year/year bookings gain, assuming they have a large enough sequential gain in 4Q. The same might be said of SNPS for the year.

Synopsys. In the critical area of IC implementation (one of the largest in all of EDA), SNPS is now seeing the returns from the past 6-7 year path of integrating Avant!’s technology with own, and maturing that combination, e.g., IC Compiler (a large portion of the “core” EDA reported revenues). On the other hand, not s
urprisingly, standalone synthesis has been a declining category for the industry. Granted there are important issues of contact timing, but it’s conceivable that even next year SNPS’ bookings could still be double those of CDNS (underscoring the importance of CDNS’ cost cuts and efforts to improve cash flow).

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Managing your boss

Posted on August 10, 2009 by paulmcl

There are shelves of management books about how to manage people that work for you. I don’t know of any management books about another very important skill: how to manage your boss. Or, if you are CEO, how to manage your board.

Instead of thinking of your boss as someone who tells you what to do (they’ll obviously do some of that) think of them as someone that you are going to tell what you are doing and how they can help you accomplish your goals.

This is not about sucking up to your boss and being a yes-man. You boss is probably not so vain and stupid as to regard that as A-team behavior. You can’t always get what you want using your own personal charisma, sometimes you actually need your boss to do some tackling for you to leave the field clear.

One rule I’ve always tried to follow is not to produce big surprises. Of course things can go wrong and, say, schedules can slip. But they don’t go from being on time to being 6 months late overnight, without the slightest earlier hint of trouble. It is better to produce a small surprise and warn your boss that things might be getting off track (and have a reputation for being honest) than to maintain the image of perfection until the disaster can no longer be hidden. Just like the salesman’s mantra of “underpromise and overdeliver” your boss is a sort of customer of yours and should be treated the same way.

Lawyers are advised never to ask a witness a question that they don’t already know the answer to. Getting decisions that cut across multiple parts of a company can be a bit like that too. Never ask for a decision when you don’t already know exactly what everyone on the decision making panel thinks. Ideally they all buy into your decision, but in the middle of a meeting is not the time to find out who is on your side and who isn’t. Your boss can be invaluable in helping to get his peers on-board and finding out what they think in a way that you, being more junior, perhaps cannot.

In some ways this sounds like office politics, but actually I’m talking getting the company to make the correct decision. Often someone junior is the best-placed person to know the right technical solution, but they are not senior enough to drive the implementation if it requires other groups to co-operate. That’s when managing your boss comes into the picture.

If you are CEO you have some of the same issues managing your board. But your board is not one person and they all have different capabilities that you can take advantage of. But, just as in the decision committee scenario above, if you need a decision from the board make sure that everyone is bought into it already, or at least have some of the board ready to counterbalance any skeptics.

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Friday puzzle: toenail cancer

Posted on August 7, 2009 by paulmcl

Last week you were asked about an ordering of numbers from 0 to 100. The answer is that they were in alphabetical order, starting with “eight,” “eighteen” and ending with “two,” “zero.” Don’t worry if you didn’t get it or it took you a long time. I’ve seen brilliant people grind to a halt on this problem since they immediately look for deep mathematical relationships.

This week’s puzzle is actually one that has some serious implications because it turns out that when it is given to physicians they typically get it completely wrong*

One in a thousand people have toenail cancer.  A screening test for toenail cancer is 95% effective, in that 95% of people with toenail cancer test positive, and 95% of people who don’t have toenail cancer test negative (there’s actually no reason in real life that for these two numbers to be the same).  In a routine screening for toenail cancer you are told you have tested positive. What is the probability that you actually have toenail cancer?

If you’ve not seen a problem like this before, take a guess (you’ll be wrong) before you try and actually work it out mathematically.

Answer next week

* See, for example, Gigerenzer, G. & Hoffrage, U. (1995). How to improve Bayesian reasoning without instruction: frequency formats. Psychological Review. 102, 684-701

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Always live as if you’ll be here permanently

Posted on August 7, 2009 by paulmcl

Christian’s guest blog earlier this week reminded me of a golden rule when you move, especially if you only move somewhere on some sort of temporary assignment. That rule is: always live your life as if you’ll live permanently where you are.

You can take this too literally. I don’t mean buy a house on the first day of a 3 month assignment, that would be silly. But don’t put off doing things you would do if you lived there for an extended period. In particular, don’t put off making the effort to make friends and don’t put off learning at least the basics of the local language if it’s not one you speak.

My father was an officer in the Royal Navy so I was what in the US is called a Navy brat. We moved a lot, every year or two. If you take the view that it’s not worth bothering to make any friends because you will only be there for a couple of years, then you’ll never have any friends at all. Then, one day, when suddenly that two year assignment turns out to be five years, you wasted the first couple of years. I actually went to boarding school so most of my friends were there rather than at home; it’s good to keep at least one foot on the ground.

But then in my twenties and thirties I moved every few years. I was an undergraduate at Cambridge, but I actually worked there for 6 months before school and for another 6 months afterwards, so I was there for four years not three. I went to Scotland to do a PhD and ended up living in Edinburgh for nearly seven years. I came to the US for what we intended to be a couple of years and it stretched to five years. Then I went on a two year assignment in France that turned out to be six years. Since then I’ve been back in the Bay Area but who knows if and when I might go somewhere next. The pattern in most of those moves is that I ended up living in places much longer than I expected and so the earlier I treated it as a significant period of my life rather than as a temporary assignment then the more I would get out of it.

For instance, in France I started to learn French before we went, rather than waiting to find out that my two year assignment turned out to be much longer. By the end I spoke it fluently. Nothing will make you “go nuts” (in Christian’s terminology) faster than sitting back saying “it’s not worth learning the language, making friends, exploring the area or anything, because I’m only here for a year.” Anything longer than you’d contemplate living out of a hotel room means that the golden rule should start to kick in.

I told this rule to a friend when he moved to work for me in France, having been temporarily based in Germany and then Paris. He said it really influenced him: he rented an apartment he wouldn’t mind living in for a long time, found a partner, learnt French fluently, took his driving test and so on. Last time I talked to him, he was still there, twenty years later.

When you learn scuba diving, you get taught how to help a buddy whose air has run out. You have a spare regulator for just this emergency. But, as my instructor pointed out, you only know for certain where one of them is. It’s in your mouth, so that’s the one you give your buddy. In the same way, the only thing you know for certain about where you will live is that you live here right now, so that’s what you have to build your life on.

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PowerPC

Posted on August 6, 2009 by paulmcl

At DAC, I happened to bump into Kaveh Massoudian of IBM, who is also the CTO of power.org, the consortium that deals with all things PowerPC. I previously met him when I was at Virtutech which was the era when power.org was formally established. A little bit of history: PowerPC was created in 1991 jointly by IBM, Freescale (then Motorola Semiconductor) and Apple (Macs would all become PowerPC based before the switch to Intel architecture a few years ago). So it was always a multi-company effort. It was designed as a 64/32 bit scalable architecture from the beginning. power.org was created in 2004 to pull together the whole ecosystem around the architecture.

PowerPC is really the third architecture, along with Intel and ARM. Their high level strategy is to let Intel own the PC market, let ARM own the wireless market (“let” as in admit that it is game-over in those markets) and try and own as much as possible of everything else: video games, aerospace, military, networking, base-stations, automotive etc. Did you know that the Wii, the Xbox360 and the Playstation game consoles are all based on PowerPC? Of course MIPS is still around, as are other processors (especially in automotive) but they are largely confined to certain segments. For instance, MIPS is dominant in the set-top-box market (all those DVRs).

The challenge that PowerPC faces is that, outside of video game consoles, most of these markets are not that large individually. To design an SoC really requires the possibility of shipping 10M units, and if the market is going to be shared with other competitors then that means a market of, perhaps, 50M units. There just aren’t that many markets that big outside of PC, wireless and video-game.

Processor business is all about software. Once a software base has been built up then binary compatibility means that it is impossible to displace one processor with another based on any features of the processor. So power.org is focusing much more on the software dimension. IBM is putting some of the Rational technology together with (I’m assuming) Eclipse and so forth to create much more productive software development environments for embedded design. It has been a constant theme this DAC that somebody needs to do something to improve the way embedded software is developed. IBM, for one, seems to at least be trying.

Another thing I asked him was what he thought of Wind River being acquired by Intel. A lot of Wind River’s business is tied to the PowerPC architecture; for example, the Boeing 787 software is PowerPC and Wind River based. It is the same the other way round. A lot of PowerPC business is tied to Wind River. It is not completely so, Montavista and Green Hills also have strong positions in certain end markets. Kaveh said he didn’t entirely understand why Intel had done it. Wind River is not used much on Intel architecture designs, even Atom-based ones. Maybe Intel wants to change that or maybe they simply decided to own a key piece of their competitors’ infrastructure. Intel has historically, of course, owned the PC (along with AMD shipping a little) but they’ve not done very well outside that space. With the Atom deal with TSMC they are clearly trying to change that and start to get traction in the SoC space. If systems are software and silicon, then Intel clearly intends to be a player there. Plus they now have a relationship with many PowerPC customers that they’d like to understand better and, presumably, eventually switch to Intel silicon in the long term.

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Guest blog: Christian Burisch

Posted on August 5, 2009 by paulmcl

Today’s guest blog is from Christian Burisch. He started his professional life as a chip designer and then became an AE for Ambit (where I first met him), Co-Design (SystemVerilog) and Tenison. Deciding to step back from the EDA industry he put together a small team and has produced a video game. Now that this is near completion he is looking for angel investors for the company. But today’s blog is further insight into living overseas.

Expats, natives or nuts

I have lived in 6 countries so far, in most of them more than once.

If you move to a radically different environment you have three options: hang out with expats, go native or go nuts.

I have done all three of those. In my opinion people enjoy the company of other people like themselves. If you travel around the world you don’t really do it to connect to the people of Borneo, you want to chug beers with the other backpackers. Hence the three options: find people like you in a strange place, become like the natives or become really lonely.

This is particularly relevant for couples or families who move together. You can have the working businessman who lives in expat land, his lonely wife who goes nuts and their kids who go native.

I found learning the local language quite hard. It is an essential prerequisite for the going native option. If you hang out with expats, you can avoid learning the language altogether. I have met many people who have lived in a foreign country for decades and have avoided learning the merest basics of the local language. This applies equally to American businessmen in Paris, to Brits in Hong Kong and the wives of Turkish immigrants in Germany.

My advice would be to commit early and seriously to study the language, preferably starting before you actually move there (I have never managed to do this myself, but I have seen impressive results in some of my friends who have).

Even if you don’t go native, learning the language will enhance the experience multi-fold and allows you to create some connection to the locals. Signing up for lessons also a good way to meet other foreigners, who have much in common with you in finding this country new and strange.

Kids tend to go native if you send them to a local school. When they are at primary school age I have found that they have a strong urge to conform and belong to a group. Don’t be surprised if they reject their own nationality and mother tongue. I don’t think there is ever an age when you should rule out moving abroad with children, but clearly it is not for every kid – or adult.

Children are naturally conservative and will never want to leave their current friends and lifestyle for something new that they can’t even imagine. You would have to ignore your kid’s inevitable reservations but they rarely take the "going nuts" route. In all probability they will make friends with natives or expats and won’t want to leave again.

If the opportunity to move abroad does arise do think twice. One thing is for sure, it will shape your life.

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How do you get a CEO job?

Posted on August 4, 2009 by paulmcl

How do you get to be CEO? I’ve done it a couple of times now and I’d be happy to do it again. I assume we are talking about a startup of some kind rather than a large company. But if a private equity fund takes a semiconductor private they face many of the same issues in their choice of CEO.

The reality is that the number one criterion that anyone is going to look for if they have a free choice is that you have been CEO before. Better still, is that when you were CEO before, you had a good exit, selling the company you ran for a good price or at least generally having left the company in better shape than you found it.

So if you’ve been CEO before and not made too much of a mess of it, you can get to be CEO again. So how do you get your first gig? Well, you are not going to get headhunted to run a class-A company. Before anyone is going to trust you with a class-A company you have to have taken a mess and made something of it. Everyone’s first CEO job is to take a company with little hope and try and turn it around. This isn’t as bad as it sounds since expectations are low and so the standards that the board will judge you by are not as demanding as if you took a company with great potential. This type of CEO job typically comes along because you are in the right place at the right time. My two stints as CEO came about this way. At Compass, I was “on the bench” in the finance division doing M&A when VLSI decided Compass needed new leadership. I was someone who knew the company and could take over instantly without needing to do a CEO search. At Envis, I was VP marketing (actually only working part-time as a consultant) when I was asked to take over.

If the board has time to do a proper search for a CEO, probably the most important criterion is that you are “fundable.” By that they mean that investors are going to view you as CEO as an asset not a liability. The best proof of fundability is that you have raised money successfully in a previous CEO job, but a substitute is the right combination of business savviness and track record. You’ve probably heard that VCs invest first in the market, then the team and only then in the technology. So the CEO is really important. The perfect CEO can raise money simply on his name (imagine if Marc Andreeson decided to start another company). More mortal CEOs are regarded as an asset to the company, a CEO who isn’t going to need to get swapped out later. Lower down are people who are at least OK for the current stage of the company, with a question mark over whether they will make it long term. That sounds bad, but in fact 75% of founding CEOs don’t make it so it’s not as disparaging as it sounds.

Of course, the guaranteed way to be CEO is to found your own company. You get to choose the CEO and can pick yourself. But whether you make a good CEO and whether you can get funded are not questions that go away. You just have to answer them yourself.

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Macs and PCs

Posted on August 3, 2009 by paulmcl

The PC market is obviously one of the huge markets for semiconductors. I think that the semiconductor content in cell-phones (in aggregate) is now greater than in PCs but I can’t find the reference I remember.

I was at Google I/O last year. One thing a friend had told me was that essentially all web development is now done on Mac. It seemed to be true. I would guess that only about 5% of the machines that I saw over those two days were Windows PCs, the rest were all Macs. Of course Apple is riding high with the iPod and the iPhone as well, it is no longer just a computer company (leading it to drop “computer” from its official name).

Steve Ballmer isn’t worried, or if he is he is trying not to show it. “Apple’s share globally cost us nothing," he said. "Now, hopefully, we will take share back from Apple, but you know, Apple still only sells about 10 million PCs, so it is a limited opportunity.” It might even be true, since a Windows license probably costs the same whatever the power of the computer.

The PC market is really a number of different markets at different price points, and Apple doesn’t play in the low end of the market. Apple has the same strategy in the phone market. Nokia is the volume leader by a long way, but a lot of that volume made up of very low-end low-margin phones. At the high end, where Apple plays, Nokia is way behind iPhone and RIM’s BlackBerry. In the consumer (as opposed to business market) iPhone is the clear leader.

But the change is starting to show up in the numbers. According to NPD, Apple has 91% market share for PCs costing over $1,000. Of course a cynic would say that’s just because Macs are so expensive, but these are the computers used by professional programmers, graphic designers and musicians. It is true that the average ASP of a Windows PC was $515 but for Mac it was $1,400. I would guess the profit is much more than 3 times as much per Mac as per PC.

So those “laptop hunters” ads have it correct. You can get a PC for much less than a Mac, but it’s not really an equivalent machine. Apple has gone from 60% of the over $1,000 market at the start of last year to that 91% number now. Last week Apple beat analysts estimates and shipped 2.7M Macs in 2nd quarter.

These numbers are retail sales, so it does ignore the PCs stronghold of large businesses that, presumably, buy through channels not classified as retail. The market seems to be splitting into two. Inside big businesses, programmers and users all use PCs and develop applications that run on top of their SAP and Oracle systems.  And when it comes to cell-phones they use Blackberrys since they can be centrally administered. Outside big businesses and in internet companies, programmers and high-end users all use Macs. And when they get a cell-phone it’s an iPhone.

Microsoft announced its results too. They missed by $1B for a 17% year on year decline, and the Windows PC division declined 29%, nearly twice as bad as the overall company. Of course there’s a recession on (although Apple doesn’t seem to be noticing), and Microsoft is just on the point of shipping Windows 7, so this might eat into sales for a couple of quarters before, although it’s never been particularly cyclical in the past.

So just like Nokia’s CEO statement that iPhone is a “niche product,” Apple ships “only 10 million PCs.” But it ships all the high margin ones to the prime customer demographic. If you look at profit and not volume, you are not so keen to use words like “niche” and “only.” Especially given that high end phones become low end phones as they get cheaper, not the other way around.

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Friday puzzle: zero to one hundred

Posted on July 31, 2009 by paulmcl

Last week’s puzzle was where Lisa asks me some questions about my house number. The first thing to note is that since Lisa knows the number if she is told whether the first digit is a 3 or not, then I must have said that the number was less than 50 when I answered the first question (and since I lied, that means my house number is actually greater than 50). For the other two questions, there are four combinations, square and multiple of 4, square and not multiple of 4 etc. If you work out the numbers less than 50 that fall into each of these 4 groups then you’ll find the not-square groups are big; the square and multiple of 4 group contains 4,16,36 and the square not-multiple of 4 contains 1,9,25,49.

Now Lisa would not be able to say she knew the number if she knew whether the first digit was a 3 or not unless it is that first group (4,16,36) and if she herself lives at either 4 or 16 leaving only two remaining choices. This means that I must have said untruthfully that my number was a multiple of 4 and truthfully that my number was a square. So we know that in reality my number is greater than 50, not a multiple of 4 and a square. The squares greater than 50 are 64, 81 and 100 and only 81 is not a multiple of 4.

I live at number 81.

We’re all too tired after DAC to have a really challenging puzzle. This week’s puzzle is to look at the following list of the numbers from 0 to 100 and fill in the missing piece in the midde:

8 18 80 88 85 84 89 81 87 86 83 82 11 15 50 55 54 59 … 22 2 0

Answer next week

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Microroasting

Posted on July 31, 2009 by paulmcl

“Microroasting.” It sounds like something that might go on in the diffusion oven of a small fab. But actually, I’m talking about coffee. It is totally off topic, but then it’s Friday. I’ve been learning how to talk “coffee roasting.” My brother in London owns a couple of coffee roasting machines. A friend Matthew Michels at Tuscany, roasts his own coffee. The hippest coffee shops in the San Francisco Mission District, Ritual Roasters and Four-barrel Coffee, roast all their own beans. Blue Bottle Coffee, whose coffee shops contain strange types of glassware to make coffee in ways you’ve never tried, roast all their own beans. They are all “microroasters” who roast small batches of high-quality coffee from single farms; Starbucks and Peet’s only manage to have a country of origin since they need such large quantities. If you go to a ball game in San Francisco or come up to the city by Caltrain, then the Creamery, just across the road from the Caltrain station, also serves Ritual Roasters coffee (and it’s just a block from where I live which is really convenient). The quality of the coffee at any of these places is immeasurably better than the average restaurant espresso machine or Starbucks. The first time you have a well-made espresso made from perfectly and recently roasted beans it is a revelation.

Basically the way you roast beans is to apply heat while they are tumbled until they reach the desired level of doneness, then you cool them down as fast as you can so they don’t continue roasting. One problem is that in the middle of the process, the chemical reactions that the heat induces in the coffee become exothermic, or an alternative theory is that once all the water has been driven off the temperature can rise uncontrollably fast. It is a major problem in roasting that you will have fires when the roasting process runs away.

There are two critical points in roasting, known as first crack and second crack. These are points in the roasting when you can actually hear the beans crack and indicates a certain point in the roasting. Actually it is pretty hard to hear the cracks in a home roasting machine which noisly blasts hot air through the beans, but coffee roasters all talk about these points since they are well defined. Pros regard these, along with aroma, as a more useful way to assess doneness than color. Beans are roasted“to first crack is complete” or “until first snaps of second crack" and so on. So if you really want to bluff your way in coffee roasting, these are great terms to drop into the conversation!

Green unroasted beans do not deteriorate for about a year. Roasted beans start to deteriorate almost immediately. For the ultimate in coffee you want beans roasted no more than a week or two earlier, and only ground just before the coffee is made. Once roasted, coffee beans produce carbon dioxide. You’ll find if you put freshly roasted beans in a ziplock bag that the bag starts to expand. In a fresh espresso, that gas coming out during the brewing process is what makes the characteristic crema on top of the coffee and gives it its beguiling aroma. Old coffee doesn’t do that.

If you want to know more, including lots of pictures of coffee beans through the process, then look here.

Then you grind the beans and make coffee, Ritual Roasters tell you more than you want to know in this video about how to taste coffee (known as “cupping”) or how to make the perfect espresso (21g of coffee and ¾ oz of water). Next time you are in the city, treat yourself to the ultimate cup of coffee.

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