Sujai Karampuri sent me his recent piece, Ground realities from a technology product company in India .
Sujai’s company Sloka Telecom is building Wimax base stations, and recently, they have won an important validation in France at Saint Medard en Jalles (5.8 GHz Wimax deployment).
I know that Sujai is pounding the doors of the VCs to get Sloka funded. His frustrations are real, and reflective of the situation and ground realities in India.
The biggest problem I see in his case is that there is no VC who is operating in India today who knows how to invest in a Telecom Equipment deal.
“Many VCs find Indian entrepreneurs clueless. There’s great deal of truth to it. But I also find many VCs in India equally clueless.” – Yes, Sujai, but that’s because the VCs who are playing in India have not identified Telecom Equipment as a category to assign partners to. You cannot expect random people with no domain knowledge to invest in categories that they know nothing about. You HAVE to find domain expert investors, as I told you when you came to see me here in Silicon Valley. And, you may have to find them here in Silicon Valley or in Boston. Probably not in India.
Another issue I see with your article, Sujai, is that you have equated “technology product companies” with “telecom equipment companies”. My personal observation is that VCs in India can tackle “software product companies” much more easily than telecom equipment.
In my Incubator Fund thesis, this is precisely the kind of problem that I am suggesting we address. An incubator would have a bias in terms of domain expertise and market focus. Just like we need incubator funds in India for SaaS, we also need one for Networking / Telecom equipment. Without these funds which bring together both expertise AND money, we have huge gaps in the early stage startup market.
Dumb money cannot possibly invest in really sophisticated technology, and pretty much all we have in India right now is dumb money. Hence the surge in retail, real estate, and consumer internet.
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Helo Guys!
I am new to this forum,and prime reason for looking at the blogs was to determine some ideas regarding business start-ups in telecom domain.
I briefly scanned couple of comments and found VC, can anybody please tell me what VC is? I am reconfirming it as Venture CAPITAL, is it true?
Later on I found that people discussing about 3G and WIMAX comparisons.Many have staright away come to the conclusion which is better, but many have rightfully came up with lot of other factors which makes things difficult to choose.WIMAX is definitely a better technology (platform OFDM), but 3G is also a base to another 4G technology (OFDM based LTE) , might see in 2012 , hopefully.
About me: An MS in Mobile communications, currently working with a senior Telecomms consultant and determined to startup a business within wireless (wimax/consulting/equipment/..etc) domain.
Anyone having similar interests, please feel free to contact and perhaps we can discuss things further.
Email id is mehulbhandari (at the rate) gmail (dot) com .
Hi,
I went through many of the articles that have been posted here, and I found them to be really thought provoking.
Although I am still a novice in the telecom domain – I am working in a product company – I would like you all to give me suggestions on how to grow up in the telecom space so that I would get to start my own venture. Is higher education(MS ? ) a pre-requisite ?
Tks,
Sachid
Having worked in a telecom equipment company (Nokia Networks Finland), I know how difficult it is to succeed in the telecom equipment business. Even the largest of companies are struggling to launch new products and make money today.
Putting money on an equipment company right now requires a lot of guts from a Indian VC point of view. This is particularly difficult for individuals within the VC firm as well who are making that proposal internally. We have to appreciate that all the decisions within a company are made by people who have to prove themselves in front of their bosses. Everyone has a boss and someone that they are answerable to.
In my last job, I used to get number of proposal from various start-up companies (I remember getting one more Sloka as well for a 3G Pico base station I think it was) but the criteria for selection was so difficult that Sloka had very little chance. I am sorry to say it bluntly but this is the fact.
So, is there hope for Indian telecom equipment companies? Of course there is. The first key decision is to target a niche and ensure that whatever you are doing/making is going to work with the other equipment around. It is not easy task in telecom equipment space since everything has to be interconnected. The second thing is that focus on IPR – get everything patented and protected. The company must be able to demonstrate success at the home market. It is very difficult for a customer in US/Europe to buy a product from an Indian company that is not deployed in India itself. There are plenty of Indians in the global telecom industry – take a trip to Barcelona and you will see it yourself. Get them on your advisory board and leverage their relationships.
Regarding getting funded, I think your best bet is to go abroad, particularly US. Indian VC industry need to build a successful track record of excellent exits (pile of money) before they would have the collective courage to take on larger bets. Telecom equipment is not for the weak hearted for sure and this is true for the entrepreneurs and also for the VCs.
Sanjay Bhasin
I meant “License Fee” and not “License Free”, in my last post 🙂
Dear Samir, when you say ‘3G is inferior to Wimax’, what exactly is your basis. Generally 3G vs Wimax is expanded to mean 3G/3.5G vs Wimax ! So if it is just speed you are comparing on, you are right. But speed is not the only thing. The other things to consider are spectral-efficiency, standard maturity & stability, industry uptake, device foot-print, power consumption (ability to run-off a 800mAh battery for instance). Other things to consider would be the business & regulatory case of the massive amounts of license-free, spectrum acquisition fees that mobile-ops have already paid. They need an evolution path. Will Wimax subscriber be able to roam freely between Wimax networks (a question of indstry maturity)?
Anyhow, Wimax has a business case, and I am not contesting or contending that. The post (Sujai’s and Sramana’s) do throw up some important points.
BTW, does anyone have some information around what is the reality with Angel funding for Products companies ? I’d tend to look at Angles (in this case) more for their experience, expertise and “network”, rather than for their money, however a more-than-peanut sized fund wouldn’t be too bad!