Vayavya Labs - Unleashing Technology with RK Patil - 1451/HOY

This article is dated 2013. Afrer arriving in Bengaluru from a business trip, tired and exhausted, RK Patil never appeared so even for a moment and was buzzing with energy as he narrated the story of how he built Vayavya Labs, a technology company that would be one of India's hottest startups.

In 1988, despite all hard work, he could not clear the UPSC examination to join the National Defense Academy. He could never get this out of his mind. After all, he had spent 7 years at SSBJ preparing for the services. Life moved on. A few years later, seeing 16 of his friends in the Armed Forces, he decided that, come what may, he will have those stars on his shoulders. Rigorous preparations followed. In 1991, a letter OIGS, On India Government Service, reached his home that filled his life with joy. He was called for the SSB interview at Mysore. He had cleared something that he considered as one of the biggest obstacles. The interview, considered the most difficult for everyone, was a cakewalk for him. Everyone knows him for the perfect amount of confidence he exhibits. Soon, he was admitted into AirForce Technical College, Jalahalli to study Aeronautical Engineering. After being commissioned into the Indian Air Force in 1993, Flying Officer Ravi K Patil experienced the greatest bliss of his life. Destiny, however, had different plans for him. An SSC officer, Short Service Commission, he had to leave the Air Force after 5 years. As he walked out of the services looking for a job to sustain life, RK had no idea that, a decade later, he would be employing about a hundred engineers to build one of India’s hottest IT startups.

RK’s entrepreneurial journey began way back in the year 2000 when he was sitting along with a bunch of friends. Each of them spoke about how they liked and disliked their jobs. RK’s was a typical case. He disliked his job because, according to him, his employer was not utilizing him to the fullest. Though he had enough work to do, he was not satisfied with his job as he was unable to apply his learning, skills and experience to the fullest. Large MNCs have defined roles and responsibilities for every employee and thus, neither anything less is accepted nor anything more is expected, if not entertained. RK was leading a project for Accord Software for their client, HP, then. He was discovering the tremendous potential that the Indian IT industry was building up. In fact, everyone could see the emergence of new age companies like Infy, TCS, Wipro, etc. that were making headlines every day. It was the time when majors like IBM, Microsoft, HP and others were getting ready for their slice of advantages that the Indian IT industry offered. Though RK came up with certain ideas, they were kept at bay as the companies visualized Indian IT industry as a cost centre then. As he discussed these, some agreed, some disagreed while some felt he was going overboard.

The bunch of friends would sit every now and then discussing over the same topic. Like every bunch, they also thought that they must leave their jobs and get into business. Like a few bunches, they got serious about this thought. As time passed, the discussions turned serious and by the end of 2000, the bunch walked on to begin a new journey, SmartYantra Technologies. The company, SmartYantra, was formed by 6 friends who contributed personal savings in order to build an IT company. “Risking all savings of our lives and agreeing to not take salary for the first 10 months, we had assumed ourselves to be Bill Gates in making. A crazy idea had been taken too seriously and we realized that soon”, says RK, “The IT bubble burst in 2001. We had a double whammy. The inclination was getting dull and we kept roaming around to get some business. We had reserves to sustain for 10 months and kept floating around. We thought of shutting down every day. Somehow, we were not serious about that as well. In the meanwhile, at our software development front, things continued with great focus. The complementing skills of people in the group played a great role in ensuring things don’t come to a standstill.” The company had developed about 6 product IPs by the year end. The focus continued to be on developing software IP in the MPEG space and apply them to suit video telephony, wireless, video-on-demand and mobile video phones.
Soon, as expected, SmartYantra ran out of the little cash it had. When survival itself was at stake, RK decided that it was time to market the company rather than the product.
After all, the product would come in to being only if the company continued to hang around. The marketing team started meeting prospective investors who only told them that they could use the same door that they used to enter, to exit. At the heights of depression, RK learnt that the core factor to drive a business is marketing. Of course, a product/service is crucial, marketing is even more crucial. He experienced that life is all about selling our ideas, our thoughts and our dreams to fellow beings. Selling doesn’t merely refer to knocking every door and pleasing or pleading customers to buy our products in exchange for some currency notes. The art of selling, a value proposition, takes numerous forms culminating into numerous outputs. While the unending learning process was in progress, RK cracked a deal. An angel investor was impressed by the idea of designing mp3 audio codec. Those days, the integration of devices to play music or movie files was under progress and was growing rapidly. Digital Audio Video compression and streaming of these files was seen as the future technology. The year 2002 bought in a couple of clients and SmartYantra had the first accounting entry into the income statement.

SmartYantra picked up pace as it found big pocket customers like Texas Instruments, NXP Platforms and Mitsubishi coming their way. It continued to target Original Equipment Manufacturers, Semi conductor companies, Chip manufacturing companies and others. While requirement based developments would fetch a onetime fee, usage of developed software fetched royalty revenues. By 2003, SmartYantra grew into a 20 member team and the revenues clocked to about half a million dollars. While working with Mitsubishi and tours to Japan, Hong Kong and China, RK discovered that manufacturing is a long process as the components are supplied by vendors in Japan, the actual manufacturing happens in India and the software is being built in India. Khufu, digital audio video recorder software that could be installed on a SD card, was developed as a result of this business tour.

It’s difficult for someone to do something new in India. By default, we are grown to live in accordance to the world. Trying anything new or taking a risk is something that does not appear in everyone’s dictionary. What’s our bigger fear that the fear of failure is the fear of failure stigma in the society. We are a risk averse society and prefer to follow practices that have been proved to lead to sure shot success. When RK conveyed his intention of leaving his job and starting a company, his parents were upset. In fact, his parents were very apprehensive when he left the Air Force too. Armed Forces were seeing computerization those days. The typewriters were getting replaced with computers enabling automation of processes and installing database and security systems. Those days, RK was working on electronic controls across the runways to install and run the arrestor barriers. Earlier, these were mechanically operated using switches. In case a plane overshot on landing, one would have to operate the switches and erect the nets so that the plane speeds down or stops. However, this damage control technique did nothing as the plane could run away by the time the nets erect. RK worked on the project to automate this amid a lot of complications like frequency jamming, radio waves, location calculations, etc. While his creativity was being nurtured, RK love for computers and technology was growing. He had an engineering degree in computer sciences from Gogte Institute of Technology, Belgaum, which added to his learning and understanding even better. Exploring numerous options before zeroing in on the best at a stupendous pace is one skill RK acquired at the Air Force that helped him go a long way in life. RK was the face of SmartYantra and was the one would take the bold steps of flying to the client locations to get business done. RK is never afraid of failures that that is one reason why his attempts are numerous and repeated. There has never been a moment when he has thought about quitting.

NASDAQ listed Genesis Microchip, one of the largest suppliers to chips for LCD monitors, turned out to be the next client for SmartYantra. Genesis, in association with Computex, was on a project to build a wireless monitor. It would be first of its kind in the world of Information Technology that the monitor would run independent of the wires that connect to the CPU. SmartYantra was given a part of this project and Genesis was impressed by the delivery. As the executives continued talking, Genesis learnt that SmartYantra is looking to raise funds. Genesis offered to acquire SmartYantra. It was one of first cases where a MNC was interested to acquire an Indian technology-based firm. At a valuation of $6 million, the acquisition was a trendsetter. Soon, the SmartYantra team merged with the 120 employee team that worked at Genesis. RK took up a larger role and became a part of the world wide Video Marketing team at Genesis. Over the next one year, there was tremendous learning as Genesis worked with industry leaders like Sony and Samsung. RK had insight to all processes that these large firms run and the issues they face. At most times, RK would discuss over simplifying the work flow or processes to ensure things move quicker. Software programs, tuned with practical approaches, can work wonders at such companies. Even companies that have hardware as the core of their business spend substantial amounts on software.

By 2006, the SmartYantra team had transformed itself into the Genesis team. RK had been planning to move out and it was time. RK had been planning to build a product company that designs software to simplify business processes. Over the last few years, he had been learning of the issues the business, especially in the manufacturing segment, face. He had an idea of the design flaws as well as methodologies to develop tools to correct them and thus, cut cost, time and effort. It was a new methodology in the early phase of software development and he had plans to champion it. The proposal was put forward and the 6 friends invested. However, this time, 3 joined in the capacity of executive board members, 2 remained investors and RK took up the CEO’s role. Belgaum was chosen as the location for setting up the new firm. With a million dollars at stake, Vayavya Labs was incorporated.
Vayavya, meaning North-West direction in Sanskrit, was founded as an Electronic System Level (ESL) Design startup firm in July 2006 at Belgaum, a district in the north western part of Karnataka. Vayavya Labs focuses on providing tools that enhance the productivity of Embedded System Designers and programmers.
Highs and lows are a part of life. About a year went by and the product was yet under research and development. It was a half baked cake with no value coming out. Employees had to be paid salaries and Vayavya’s resources were drying up. There was not just frustration but anger too. “Whenever I feel uneasy, I get up and start walking. As I walk, I understand the situation. It is an effective learning process. Sometimes, I keep calm and walk for hours till I find a solution to the situation. Patience pays tremendously in the long run. If we learn patience and perseverance, we have learnt almost everything that life teaches”, RK says. Soon, RK started looking out for funds. His initial plan was to approach venture capitalists and source equity. On a second thought, he decided, this time, to search for a source of revenue in lieu of a source of funding. RK looked around and grabbed a couple of projects that could be executed by the team. An alternate services business took shape at Vayavya. Considering the low overheads in Belgaum, the costing RK could offer was way below what companies in Bangalore or Pune could have offered. Several small ticket projects started flowing in and in a few months, things were in a good shape. The additional revenues being earned in the services business was invested into R&D and by 2010, the product was in a presentable form. It was demonstrated before VCs to seek funding. In 2011, Indian Angel Network (IAN) invested a million dollars in Vayavya in equity participation.

In the meanwhile, Vayavya was making news in the IT space. With clients like Philips, NDS, Texas Instruments, among others, its services business in the consumer electronics space, especially TVs and set top boxes, was seeing impeccable growth. With about 80 people on board, the company reached a million dollars turnover in 2011. Recognition for this tremendous pick up had been coming with many awards and accolades. Considering the feedback from the clients, Tata listed Vayavya Labs among the Hottest Startups. Vayavya has also been featured in the Silicon 60 at global level. The prestigious IIM Bangalore has incubated the company for their study. Apparently great products can be built in the world of software. However, a product will become great only when people recognize it as helpful. Vayavya has been able to help businesses work efficiently.

"Entrepreneurship is not easy as there are challenges from every stakeholder. A determined businessman has a game plan for each day in order to reach his goals. Entrepreneurs enjoy the kick to go to work as they are doing what they enjoy doing. There are no timelines. Sometimes, I feel it so easy to work 24 hours a day and so difficult to work 9 hours a day. We have sold dreams to so many people and have huge commitments to keep up with the realization of these into realities. The hope that, one day, we will make it big drives us each day", RK says.

Getting employees with required skills is one difficult task startups face. The glossy buildings, flashy cubicles, foreign trips, better pays and perks attract young engineers. Companies like Vayavya face a tremendous challenge in sourcing talent as most engineers look forward to work the MNCs. Only those who do not get into MNCs look towards smaller companies. Further, these candidates do not stay for long as they take the experience as a launch pad into the larger IT space. At Vayavya, the attrition is not high but RK wishes that he doesn’t lose any employee as a lot of investment, especially in terms of time and resources go in to nurture each one of them. A startup does wonders only when the senior team works in tandem with the founders, with the same zeal and passion. However, convincing experienced engineers to join a startup for taking a tougher path in life with lower monetary benefits is a herculean task, especially when the startup is in a cash strapped situation.

RK has the uncanny abilities of gelling up with people that came in him from the school days. Unlike the traditional system of assigning students into different houses on joining SSBJ, an experiment was on to put them all into same house for the 1st year (Class 6) and distributes them from 7th onwards. RK was in class 9 and he was given the responsibility of this new initiative. While on one hand, RK was building these young kids in line with the disciplinary customs of the school, on the other hand, the juniors were terrified with the perfectionist RK was. He was mentoring the boys and he was also having a wonderful time with his classmates. He had a great bonding with everyone. There were no inhibitions to know each others’ weaknesses as the focus would always be on the strengths. Great relationships are built when people open up their lives. "Employees feel very happy when we help them with anything. This comes naturally to us. Everyone sees what’s good in others but points out what is bad. However, we have been, from day one, pointing out what is good. It really takes guts to tell someone that he is better than you, to tell someone that he played better. Football taught us to appreciate strengths", says RK, "Seeing a dream and assembling a team are critical elements that go in to determine how successful your venture will be. Every individual is different and connecting with them all with the same energy is challenging. Every individual is important. At the end of the day, it’s about the company and the company is about the people who make it."

Building a product is a long gestation cycle that begins with conceptualization and follows with developing, testing and deploying. Getting clients to accept the product for testing itself is a difficult task. It takes about 8-10 months for the client to see an impact of the product on the business. Multiple proof points are required to evidence the result. In case the product gets sold, companies breathe a relief. Else, they would have to run around for another round of funding and their fate gets written in the hands of the VCs. Vayavya has been focusing on earning revenues from the services, invest them into R&D, enhance product capabilities and hold a technology that has value added impact on the industry. The company has already gone in for a US patent for the product they are designing.

Marketing involves a lot of travel. RK stays away from home for more than half of the year. Having a supportive family is the key to work things in required manner. In fact, RK remembers that when his parents were hunting a bride for him, many rejected him as he had no job and his startup had no guarantee of survival. Of course, there are no guarantees on anything in life. Being married to someone who is brave to face life in your absence is very important.
Put your hand on the heart. Have good intentions. If it says yes, go ahead. Relationships matter the most. Greatest happiness in life comes when you feel happy to eat food.
For once, RK thought that he would earn Rs 10 lacs and fix it in a deposit to earn Rs 10000 a month to live life. Very soon, his target increased to Rs 1 crore. In the process, he realized that life’s journey is never about money. Money is merely a medium of exchange in huge demand. The tangible happiness of sharing wonderful relationships, meeting people and the khujali of doing something different are far beyond money’s reach. Money buys comfort but not happiness.


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