The Hindu Business Line : SiRF impulse? No way

Up the ladder is how one moves to reach the corporate world peak, but the ladder may have sharp bends, with some rungs missing too. Pitfalls, like Claymore mines, are a part of the game, unless one decides midway to build a ladder to move away and up. Like Dr K. Srikrishna.

Dr Srikrishna’s Impulsesoft became a successful firm offering Bluetooth technology products before he and his partners decided to sell the firm.

In an interview to eWorld, he reflects on his motivation and experiences along the way. Excerpts:

Your spark to start Impulsesoft…

Ever since 1988 when I got a job, I wanted to start my own firm. After returning to India in 1997, I joined Sasken, a tech firm in Bangalore, as marketing manager.

The Sasken engineers were world-class, but Sasken, like Infosys, was making about $60,000-70,000 per engineer per year while our customers made between $250,000 and $1,000,000 per engineer per year in revenue. This was because our customers were shipping products whereas Sasken and Infosys were offering services.

So my desire to build a product-based company, to be a Sony or an HP from India, provided the spark.

How did your firm become a leader in Bluetooth technology?

Much as I would like to say that it was solely because of vision and strategy, nothing could be more false. We became a global leader in stereo music in Bluetooth through execution, perseverance, pig-headedness and some luck.

Earlier, customers were prepared to pay well, but as Bluetooth technology seemed to be stagnating, and a number of resource-rich competitors emerged, the market hesitated to pay well.

In our first target market — the PC — one of our competitors, Widcomm, outran us. Similarly, one of our partners, Cambridge Silicon Radio (CSR) which made Bluetooth silicon (semiconductor), began providing a complete solution including software for the headset market.

We lost our position in two segments and were unclear about the prospects in others — do we focus on printers or try to recapture the PC market? Or find another niche to claim leadership?

We decided to focus on high quality, stereo music transmission using Bluetooth because we felt the market was still open and we could beat technologically.

We also had a motivated customer in Korea who was prepared to learn with us. Our competitors included Widcomm, Extended Systems, China-based IVT, and Japan and US-based Open Interface.

By partnering closely with Zeevo Inc, a competitor of CSR, we were able to provide the first complete solution for stereo transmission, get the first Tier 1 customers and innovate a proprietary protocol — GMCP (Generic Media Control Profile) — parts of which were incorporated in the subsequent Bluetooth advanced audio video profile standard.

How did you give up on your brain child (Impulsesoft) to SiRF (which seems to be a Hindi word meaning ‘Just That’)? Was it impulse (a la Impulsesoft)?

Five years after founding Impulsesoft, we broke even in March 2004. In March 2005, we even made a profit.

Survival was not in doubt, but the challenge was to grow. It was clear that we were undercapitalised and the Bluetooth market had begun consolidating.

Customers were expecting one or at most two vendors to provide complete solutions — from semiconductor (silicon), software, system integrators, ODM (original design manufacturer) to OEM (original equipment manufacturer). Independent players were few.

If Impulsesoft were to stay focused, it had to either become an OEM, requiring big bucks for product development and branding and competing with customers; or it had to integrate backward to become a silicon supplier, for which we neither had the competence nor the capital.

Meanwhile, our competitors and partners were being swallowed: Widcomm and Zeevo by Broadcom, Clarity by CSR, Extended Systems by Sybase.

Our customers were worried whether we would be acquired by one of their competitors.

We, therefore, decided to try build a retail brand. So we founded a Singapore-based subsidiary called Hippo Systems. As we needed capital for this, we began talking to prospective investors and present customers.

Two of them were interested in acquiring us. Based on further meetings, we ended with four active suitors for Impulsesoft, of which SiRF (which finally acquired us) seemed the best fit to carry forward our vision of integrating with silicon and addressing the same market. SiRF stands for Silicon RF (the pun in Hindi, was intended I suspect by the SiRF founder, Kanwar Chadha).

Did you face employee attrition in your firm? Is it a major problem in India?

At Impulsesoft we did face problems of hiring people and firing a few, but rarely did we have a problem of attrition. In the days of boot-strapped start-up in 1999, we could not get anyone to join us, but for those we knew from our past jobs.

We were not as confident but were ready to face uncertainty of strategy and revenue. We were not sure if others would be as open to it.

Once we had 20 people on board (all hand-picked) we went on a hiring spree and ended up with many wrong people: wrong culturally, in aspiration and for us as a company.

Luckily the market bounced back and most of them got jobs before we fired them. So it worked well for all.

Attrition is a problem in the Indian IT sector. There are too many jobs and not enough middle and senior-level people with the right mix of competence, leadership skills and commitment. Promoting the right culture, I believe, is the way to keep a team in place.

What makes a senior hand shift to another firm?

Most people — definitely if senior — shift jobs because they are driven to it. In other words, they are rarely pulled by another firm but pushed by the present firm.

When a senior person feels he is (a) no longer contributing in the present role, (b) no longer being allowed to grow, (c) not being assigned greater responsibility or being allowed to do what he believes is right for the business; or worse, (d) not getting a hearing, even if only to disagree with the leadership, that is when the person begins looking around. They always find something promising. More than money, people seek fulfilment, a clear feeling of contribution and accomplishment. The day they stop feeling this, they are ready to move on.

Which way is the Indian IT field heading? And what role will you play in that?

This is a difficult open-ended question. Referring to Indian IT firms, I can hazard a guess. The big four — Infosys, TCS, Wipro and Satyam — have locked up the conventional IT services business, and I suspect they will grow at the cost of mid-tier firms. The next two big areas I think will be product business — software as a service (SaaS) or semiconductor or system products — and application of IT in non-conventional areas such as drug discovery (bio-tech) or finance (business intelligence, search). I hope to play both a direct role (possibly with a new company I hope to start) and an indirect one (by evangelising product development and to narrow the focus, anathema to most Indian IT companies).

After giving up on Impulsesoft, will you start another firm like it?

I would not call the sale of Impulsesoft as ‘giving up’ on it. Having begun life as an embedded software technology business, the natural fit for Impulsesoft (which we discovered only at the end) was to be part of a semiconductor firm — which it did. The biggest lessons learnt from Impulsesoft were — we can inspire a team to believe in a vision, execute it despite daunting internal and external challenges, and be successful. Most important, culture and vision override every other factor in business success. So I hope to launch more than one firm not unlike Impulsesoft.

People take risks all the time as you know. People riding on footboards, catching a running bus or a train, and more .... Do you think such risk-takers would succeed as businessmen?

Your question reminds me of the study of fallacies in Logic 101: ‘High return investments are usually risky’ which does not imply that ‘Risky investments give high returns’. It is not risk or its magnitude that determines success. It only means that success rarely comes without some risk. Most people who ride on footboards mindlessly (or those that dash across the NH-4 assuming they will outrun a lorry) have statistically no greater chance of success than others in starting a business. If anything, their mindless risk-taking makes them a poor choice for running a business, in my opinion.

Your idea of becoming an entrepreneur seems as simple as adding 1 and 1.

I know and believe that becoming an entrepreneur is simple, but being successful is non-trivial. We began our business with less than Rs 2 lakh, paid salary to 55 people every month for more than six years, borrowed from family, friends and investors, did not pay ourselves for years, but outlasted many competitors who had raised millions of dollars. So I know it is simple to start a business, but hard to run one, and harder still to succeed. Having built successful businesses in the US (as part of a larger team) and in India (as part of a small team) I know the truest answers are the simplest (once you have experienced them).

goutam.1301@gmail.com

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