Pioneers in faculty entrepreneurship – the IISc way

Lessons to be learnt from the pioneering efforts of four academics

It is more than two decades since they started their two ventures together, spurred by a talk that Ratan Tata, then Chairman of Tata Sons and President of the IISc Court, gave to the faculty, but Swami Manohar, one of the four, still remembers the events leading up to them becoming entrepreneurs and how they proceeded with the two start-ups. All four – Swami Manohar, Vijay Chandru, V. Vinay and Ramesh Hariharan – were faculty members in the Computer Science Department at the Indian Institute of Science and are still referred to in a cool way as the ‘gang of four’ or the ‘Four Musketeers’. They took a break from their academic duties and worked feverishly on the ventures.

They were pioneers in not just academic entrepreneurship, but also helped the premier science and research institution put in place the framework for faculty members to become founders. It was not just the usual difficulties with starting a venture that they had to face, they had to contend with Vijay Chandru, who was the CEO of one of the ventures – Strand Lifesciences – getting injured in a terrorist attack on IISc in December 2005 and being out of action for a while.

One of the two ventures that the four started, Strand Lifesciences, has since been acquired by Reliance Industries, while the other – PicoPeta Simputers – was bought over by a listed company, Mumbai- based Geodesic Information Systems.

Even then, it was a tough battle for them, recalls Manohar, who with his colleague Vinay, was involved in running PicoPeta, while Chandru and Ramesh were looking after Strand. The name PicoPeta comes from ‘pico’, which refers to 10^-12 and peta, which denotes a factor of 10^15 . Their plan was to use open-source software to build a simple to use hand-held computer – or Simputer – that will power rural India.

But before getting into details of the Simputer and how the four went about the ventures, let us learn from Manohar the background and the trials and tribulations they faced.

The trigger

The trigger, according to him, had its origins in the Bangalore Declaration on IT adopted during the first BangaloreIT.com conference in 1998. During their stints in the US, Manohar says they had seen that a lot of the faculty members were doing some start-up or the other. The Bangalore Declaration was the real trigger for their entrepreneurship. The IISc was founded not just for the faculty to conduct research, publish papers and teach students, but also to do something that will improve life in India.

“We said we need to build something from scratch, we cannot be importing technology and trying to see if it will benefit India. The hardware has to be built here, the software has to be developed here and the solutions will have to come out of here,” says Manohar. Chandru had been to MIT, Ramesh to NYU and Manohar to Brown University, while Vinay who had completed his PhD at IISc and his “outlook was more global than anybody regarding technology, market and knowledge.”

The second trigger for the four becoming founders was Ratan Tata’s address to the faculty, in 1999-2000, when he said that while he had seen faculty members in US universities starting ventures based on their research, he had not heard of IISc faculty being entrepreneurial. “We met him afterwards and told him that there is no rule that allows us to become entrepreneurs. We want to but people say we can’t do it because we are faculty. He said go change the rules,” recalls Manohar. The four then got into the act, drafting a letter to the IISc Director. Manohar says the then IISc Director Prof. Goverdhan Mehta and Prof. H.P. Kincha, who was heading the SID (Society for Innovation and Development), were extremely supportive. Both of them understood technology and the value of business for technology. They constituted a committee to come up with a framework for faculty members to become entrepreneurs.

With this done, Chandru, Manohar, Ramesh and Vinay formed two companies – Strand Lifesciences, a bio-informatics venture, and PicoPeta Simputer, to make a hand-held device that will drive computing in India, especially in rural areas. That the four professors were getting into entrepreneurship created a positive buzz in IISc and in Bengaluru.

The birth of the Simputer

“Four of us faculty at IISc along with technologists at Ncore designed and built the first version of the Simputer and launched it in 2001,” says Manohar. “It was not just a piece of hardware but a solution that aimed to deliver the benefits of ICT to everyone in India, which in 1998 was restricted to a small sliver of the population,” he adds. Manohar points out that the Simputer was a handheld device with the same capability as that of desktop devices in terms of meeting the diverse needs of people. A language neutral interface that included icons, text-to-speech in multiple languages and, most importantly, the ability to write on the screen, were the features that set the Simputer apart from any other device at that time. The stylus had not yet come into vogue. This happened even while large foreign companies such as Compaq and Samsung were still grappling with developing something similar.

“The goal of the Simputer,” says Manohar, “was to deliver everyday solutions to people everywhere. Though we had no idea about it in 1998, the vision was something like what has been achieved by smartphones today: one device through which communication, transaction and information could be accessed by everyone in any language of their choice. Instead of using fingerprint and face recognition as we do today, we proposed to use smartcards that uniquely identify users so that they can use the Simputer to access their private information and manage transactions.”

The Simputer had many layers of complexity. Designing, prototyping and manufacturing a complex device such as the Simputer was considered an impossible task in India in 2000-01. The electronics had to be designed, components sourced so that the overall cost was kept within the target, the product enclosure required design, tooling and precision manufacturing. “Just getting a switch to work the way we want or a connector to sit precisely are major tasks that any errors could set us back by a few months. The Simputer was manufactured by Bharat Electronics in Bengaluru,” says Manohar.

This was about the hardware. The bigger challenge was to develop the software layer that had to cater to a population that was a first-time digital device user. In 2002, the success of the software layer was demonstrated when quite a few village panchayat secretaries used customised Kannada software developed by PicoPeta to digitise the annual harvest data in many districts of Karnataka. Besides, elementary school children in Bastar district used the Simputer independently to play educational games while also using an English text-to-speech that they built for the Simputer.

Putting in place a framework

Building the Simputer, says Manohar, played a major role in entrepreneurship, including for the founders. They were asked to design the entrepreneurship programme at IISc. The four continued as faculty members, they were running two start-ups and they were also involved in framing the rules and regulations regarding faculty entrepreneurship. They went on a lien for one year to work full-time on PicoPeta and Strand. It was a tough decision for all the four.

Manohar recalls that they received a lot of interest from investors for Strand, including from a Boston- based company that gave it a project and some funding. However, investors were not willing to place their bets on PicoPeta. The reason being, they perceived India only as an IT products and services country and not a place where hardware could be manufactured. That was also the time of the IT services boom. He says there was not a single door they did not knock on. The answer was a blunt ‘No’! Some even told them they were making a big mistake by choosing to build hardware. The ecosystem was simply not there.

In spite of this, says Manohar, PicoPeta got money from some prominent angel investors and a grant from the Government of India. The Government of India took credit for the Simputer but did not go beyond that. Any new technology or technological product, especially one developed indigenously, needs the Government’s support in large measure for it to get adopted. That was lacking.

Open-source software and hardware

Manohar says they decided to adopt open-source software for the Simputer. The hardware too was open-source so that anyone could use it to improve on it and build better products. They created the Simputer General Public Licence. Anyone could take it after a year of manufacture and use it to build their version of the device. It was really tough. However, he adds, they did not default on any payments. When they realised that it was going to be difficult, they started looking for exit options, which is when the Mumbai-based Geodesic Information Systems acquired PicoPeta in November 2005.

After the acquisition by Geodesic, the Picopeta team continued their path breaking efforts. They defined and built a prototype of Olai, a revolutionary device targeted at education. This was the ipad before it was conceived by Apple. Olai2 was an enhancement with two screens, one for video and dynamic content and the second for reading, similar to a kindle screen. The project made rapid progress in partnership with Intel. However, as has been true in its long history, the Simputer team was way ahead of large well-funded companies. Intel was no different; it just pulled out.?

During the first year after the acquisition, Manohar recalls, the team built and brought to market the GeoAmida, one of the earliest transaction terminals with smartcard, fingerprint reader and a printer integrated on the Amida platform.? When Geodesic collapsed due to mismanagement by the Geodesic founders, these products were left adrift. However, some of the core team members started another company, Optipace technologies to take the payment terminals to the market. They are doing well.

The other legacy of the Simputer is the upgrading of BEL's manufacturing expertise. The Simputer was the first device with a full-fledged operating system that they manufactured. The PicoPeta team upgraded the skill set of BEL. Few years later the team at BEL with the expertise gained with the Simputer, was able to deliver six lakh tablet devices won in a competitive tender, which would have been impossible without the Simputer experience.?The larger legacy is that it was shown that a small dedicated team can build a world class product that includes hardware, software and solutions, a full platform.

A missed opportunity

Not investing in the Simputer then was a lost opportunity for India, feels Manohar. The country could have led the mobile computing revolution. He forcefully argues that venture capitalists adopt a herd mentality. At that time, India was not known for hardware and was well-known for software and IT services, and so everyone insisted only on investing in IT services and regretfully not in hardware.

However, he is proud that they came up with a product that was definitely the first of its kind in the world with no VC investment. The question to ponder for VCs and other so-called industry leaders, asserts Manohar, is the missed opportunity: the Amida Simputer software platform called Amida Alchemy is exactly what Android turned out to be 10 years later. Microsoft missed the bus by insisting on licensing out WinCE for handheld devices (at about US$ 30 per device!).

None of the industry leaders of that time could see ahead to the mobile computing revolution that was just round the corner and refused to invest in PicoPeta. The same industry and VC titans, argues Manohar, are probably missing the disruptive innovations of today by continuing to be like sheep following the US trends.

Cut to the present

It is, however, thanks to the four that the IISc now has a thriving start-up ecosystem with a number of exciting and promising science-based start-ups coming out of the Institute. The quiet ambience at IISc’s incubator plays a major role in Bengaluru’s start-up culture and ecosystem. A number of faculty members are now involved in the start-up ecosystem, either founding or co-founding the ventures or advising or mentoring them.