BackCanaan incubates new start-up idea for India
Canaan incubates new start-up idea for India
PremiumChasing dreams: Sharad Sharma, who quit Yahoo India in April after two years at the firm, said entrepreneurship was always on his mind. Hemant Mishra / Mint
Bangalore: Sharad Sharma, former head of Yahoo India Pvt. Ltd’s research unit, says he finally has his “head reconciled with his heart". That is, while his heart aspires to float a start-up, his head is in the cloud (computing).
Canaan Partners, a US-based venture capital firm focused on early-stage technology companies, has hired Sharma as its “entrepreneur in residence" (EIR) in India to come up with a business idea related to cloud computing in six-nine months and launch a start-up.
As EIR, Sharma will have Canaan’s infrastructure and networking support, minus monetary compensation. If the experiment doesn’t work out, Sharma, 45, has the option to join an early-stage company in Canaan’s portfolio that specializes in cloud computing.
“My belief is that in tough times, adoption of a few applications accelerates. I think certain trends like cloud computing will have a pull effect," he says.
Cloud computing as a concept aims at allowing users to access applications and store files and data on secure, external servers through the Internet, significantly cutting maintenance and technology costs.
Sharma, who quit Yahoo India in April after two years at the firm, said entrepreneurship was always on his mind. In 2001, he co-founded Teltier Technologies, a wireless telecommunications firm in the US that was later acquired by DynamicSoft Inc.
Sharma says it was not an easy decision to leave a cushy job and start a life of uncertainty generally associated with a start-up entrepreneur. “Yahoo India is about to pursue businesses, which are relatively new, outside its core areas (i.e., the US). I think it would be difficult. I have been sensing and feeling that some solutions space will shrink," he said on why he decided to move from Yahoo India.
Canaan Partners general partner Alok Mittal said the venture capital firm was on the lookout for an expert in cloud computing and Sharma’s early domain knowledge made him a right choice.
The concept of EIR is not new in India. Though larger firms such as private equity fund 3i India Pvt. Ltd already have EIRs in India, Mittal says Canaan’s partnership with Sharma is different because there’s no business idea in place to start with. “A lot of EIR relationships are on the basis of a specialized business idea. They are incubated by investors. In our case, we don’t even know the idea," Mittal said.
Also, the global scope of the relationship is different with Canaan, as it has one global fund and Sharma will have access to all its portfolio companies.
EIRs, though, are risky partnerships as the firm bets heavily on one person’s expertise, says Mittal. “EIR is one step ahead of seed funding. We don’t know anything except a broad space and an entrepreneur."
Will Canaan look for more EIRs in India? Mittal says it is not really possible to manage many EIRs simultaneously as such partnerships mean a significant commitment in terms of time and efforts. “Also, it depends heavily on finding the right person for a business."
S. Roy, a former colleague of Sharma at Symantec Corp. in India, and now an entrepreneur himself, says Sharma was always one to resolve issues. Giving an instance, Roy said that when he was clueless about monetizing his software business model, Sharma advised him to offer one part of the product for free and monetize the add-ons.
“It was a win-win situation. Customers, who needed the product, paid for the add-ons, as they knew the first part was working well," he said.
Having known Sharma for about six years now, Roy says he has a knack for removing hurdles.
“He has the ability to add extra zing, use personal network and encourage people... not many people can do that," said Roy.
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