John Chambers, executive chairman of Cisco Inc., and chairman of the recently-formed US-India Strategic Partnership Forum (USISPF), is bullish on technology start-ups in India. Having picked up a 10% stake in speech recognition solutions company, Uniphore Software Systems Pvt. Ltd, in his personal capacity, he is now eyeing 2-3 more such start-ups to mentor. Chennai-based Uniphore, which had made it to the list of winners in the 2016 India edition of the “Innovators Under 35", is headed by Umesh Sachdev, its co-founder and CEO.
In a recent joint interview with Sachdev, Chambers insisted he would have “never met this young man (Sachdev) had he (Chambers) not attended EmTech India 2016 as a keynote speaker". Chambers explained why he invested in Uniphore, and also shared his thoughts on gender inclusion and the role of start-ups in boosting this trend. Edited excerpts:
Why makes you bullish about technology start-ups in India?
The big overriding picture is that India is moving from being a slow follower to a fast leader. Prime Minister Modi is one of the top leaders in the world and gets how technology will changed the world for the country’s 1.3 billion people. He also understands that without a start-up engine, growing much stronger than it is today, we are not going to create the jobs we need for a billion-plus people. This is also about gender inclusion since start-ups can recruit more women.
What do you look out for when investing in start-ups?
First thing I look for is market transition. In Uniphore’s case, my first investment in a start-up outside the US, the market transition is in speech, which will be the most convenient way to interface and focus on consumer confidence. The other market transitions are AI and machine learning. It is speech utilization that changes this with features and products like speech assistants and speech analytics. I also consider whether the CEO really has a unique opportunity to lead in this market transition. Does s/he have the game plan to make it happen? Is the chemistry right? Umesh, for instance, can hold his own among big CEOs. The third consideration is about the inflection point in a market. Fourth, I see who the customers are. Last, I look at the team.
How did you decide to invest in a start-up like Uniphore, given that all big technology companies too have speech and voice technologies that are integrated with AI?
I looked at the market transition as explained earlier (above). Sachdev was ranked one of the 10 “Next Generation Leaders" in 2016 by Time magazine (for “Building a Phone That Can Understand Almost Any Language"). He was also recognized by Deloitte as a Technology Fast 500 company (in Asia Pacific in 2014) and ranked as the 10th fastest growing technology company in India by Deloitte Fast 50 (in 2015). I believe innovation will come more from start-ups rather than from big companies who struggle to be innovative.
I also watched the team he built and how customer-driven he is. I did not advance my time, or stake my brand and reputation without believing that he has an actual chance of winning. I have talked to his customers, and they are very happy with him.
What are start-ups doing right—or wrong?
Innovation in start-ups is very good. You always get one of the brightest people in start-ups today as opposed to large companies. The engineering base is huge in India. You have a government that is encouraging start-ups with the right tax policy and making it easy to do business. Start-ups, however, have trouble scaling. They do not know when to step on the gas, or when to take their foot off. You can give them access to capital but they have trouble getting access to big customers. This is where mentoring can have a huge impact.
What prompted you to invest in the Texas-based Aspire Food Group—an automated cricket (insect) farm start-up?
It is amazing what Mohammed (Mohammed Ashour, CEO of Aspire) has done there. He had won the $1 million Hult Prize in 2013, and his company is doing research and investing in sustainable insect farming practices to bring this protein alternative to market. We met during a panel discussion and I got to understand what he knew and what he didn’t. He asked me to help him but I initially declined since I did not know anything about proteins or food chains then. Over at least a dozen meetings, I saw the potential in this company and believe that it (crickets) will be the primary protein source for the planet. Among other things like showing him how to scale and helping him in marketing, which I am reasonably good at, we had to work on the branding of the crickets—from being perceived as something that only less economically developed countries might use. So had a top US restaurant, Saison in San Francisco, to serve it as a seven-course dinner to get the message out.
You recently led a USISPF business delegation in Hyderabad, which was also attended by Ivanka Trump. Are enough steps being taken to empower women, and support women entrepreneurs?
India has been blessed with some excellent women leaders (six women) in the government. Ivanka Trump, too, is a mother and author and a tremendous business person in a male dominated area. Both India and the US need start-ups to create more jobs. You have to start with the government initially, and this is where the USISPF plays a key role. According to a McKinsey Global Institute report (September 2015), $12 trillion—or 11%—could be added to the global GDP by 2025 by advancing women’s equality. Let’s assume these numbers are aggressive but even if you cut them to a third, it implies 3-4% GDP growth every year due to gender inclusion. Start-ups, where all job creation will occur, can lead in gender inclusion and also lead in growth and job creation. This is what excites me.
How much has John’s mentorship helped you (addressing Umesh Sachdev)?
Sachdev: John’s role goes far beyond a typical angel investor. From the time I got to know him (at EmTech India 2016), Chambers has spent about an hour every month for about nine successive months—getting to know about our business much better—before we even began talking about his potential investment. He is helping me in areas like preserving the company culture, identifying new technologies, recruiting leadership teams and is also willing to spend time guiding me in other areas of this business. Hence, we thought an appropriate title for him was ‘Chief Guru’. He now talks to me about twice a month, and this helps me take decisions as I’m growing the company as it has reached an inflection point. Our big task ahead is taking the company global.
On gender diversity, we have charted a very ambitious goal of having 50% of our workforce comprise women. However, we realized over a period of time that we tend to hire males in a male-dominated software industry—they are mostly hired for sales and marketing jobs but we need to hire them for engineering too. The problem is that supply (of women engineers) is short. The fact is that even our hiring managers, including me, have a male bias when hiring. In the last few months, we have been making ourselves aware of this bias. We have a mandate now that for every open position, at least two women candidates have to be interviewed. Currently, about 32% (global average is 24%) of our 100-strong workforce comprises women. We believe there is tremendous value in going down this path.