From Pioneering IBM India Research Lab to Founding Evalueserve & Scry Analytics – The Journey of Alok Aggarwal.
It is always easy to follow, but it takes vision and passion to lead. The IT industry has seen a boom in recent years. Many people have a stake in this exponential growth. It is the pioneers who ought to be acknowledged the most. Their hard work and perseverance have enabled the field to acquire the glam and grandeur it holds today.
YC: The saying goes, “Rome wasn’t built in a day”. We would like to hear about your journey from the very beginning.
An Optimistic Start
Alok: The very first memory of my childhood was my mother. She was very passionate and would say,
“You stick your foot in the sand, and water will come out. You guys are at this age, you should be so strong and so powerful.”
I would say she brainwashed me into optimism. For a man born in 1959 still going strong, I owe her a lot.
I was born in Karol Bagh in Delhi. I lived the first 21 years of my life in Delhi. I went to Cambridge School. My father was an advertising manager in a newspaper called The Statesman. My mother was a housewife. I have a sister who is about 11 years older, she was an inspiration to me. She did her MBBS from Lady Hardinge Medical College, Delhi.
My parents were the typical Indian parents who wanted me to choose either Engineering or Medicine. The final choice was mine, and I was not sure which to pursue. I eventually chose Engineering and secured a fairly high rank in JEE.
Delhi Days…Into IIT Delhi
There is an interesting part in the story. I had missed my JEE interview the first day. I ran there, and the Dean, Late Prof. Indresan, was extremely nice to me. He said, “Son, the interviews for today are done. But tomorrow, you can come in, we’ll give you the first choice. Today, you could have gotten into the discipline of your choice at IIT Kanpur, but tomorrow you can’t.” I said, “I am not planning on going outside Delhi anyway, sir.” That’s how I ended up in IIT Delhi, pursuing electrical engineering.
YC: How were your Engineering days?
Alok: I think we got superior education. The professors were great, and my colleagues were equally superb too. We had just one internship back then at the end of the fourth year for namesake. Today, internships are rightly acknowledged for the exposure they provide.
Those were the days of ‘The Great American Dream’. The world was fascinated with the fast-paced developments in America. People wanted to either work or study in the US. Mine was to do a PhD in Electrical Engineering.
A Fascination for Algorithms
I planned to research superconductivity when I joined John Hopkins University but later switched to Computer Science. I had an Indian professor, Rao Kosaraju, who ignited a passion for Computers in me. I became so fascinated by Algorithms, Computer Science and Mathematics. Hence I shifted to Computer Science from Electrical Engineering.
YC: How was your journey to IBM?
Alok: I never wanted to be an entrepreneur. I wanted to be a professor. I even got a great job offer to be an Assistant Professor at the University of Illinois at Urbana-Champaign. The location of the institution and the non-availability of vegetarian food (I was then a vegetarian) made me think otherwise.
Then the offer from IBM Research Lab came. It was on the East Coast, 40 miles north of New York City. It was one of the three well-known labs – AT&T Labs, IBM Research Lab and Xerox PARC. I joined the IBM Research Labs.
I told my manager that within six or seven years, I’ll end up going and becoming a professor. I did a fair bit of research in algorithms. It was basic theoretical science, the science which was likely to be practical in the next generation. I joined IBM in 1984 as a Computer Scientist – wrote more than 90 research articles and 9 patents during this period.
In 1989, I got a chance to teach at MIT. I taught two courses in Computational Geometry and advised two PhD students. The students there were brilliant indeed. But soon I realised that being a professor was to spend at least 40% of our time doing administrative work, pushing papers, and writing grants. It turned me off.
From Paper to Practice
I came back to IBM research. In 1991, we landed our first client, when the CEO of Madison paper mill near Portland came to visit us. We went to Madison, Maine, for three months, and studied how paper was made. We wrote our own algorithms, mostly on mainframes. This was for the first time that we were converting basic theory into practical work.
It improved the mill’s efficiency by 1.5% and saved them several million dollars. The CEO bought the entire AI-system from IBM and used it for 25 years during 1992 and 2017. It was then I realised that research in basic science was worth the effort.
It was in 1995, the head of research, Dr. Paul Horn, asked me to join the strategy team. I was a little hesitant as I am always interested in action rather than strategy. Nevertheless, I joined the team.
I learned a lot from Dr. Horn, especially about marketing. Our strategy department came up with two ideas, the first was to develop a computer program to beat Garry Kasparov in Chess. The second one was to set up an IBM research lab in India. Soon thereafter, I was sent to Delhi to start IBM India Research Lab. For this purpose, IIT Delhi built us a gorgeous building that is the IBM Research Lab. Rented, and we started this Lab. on January 1, 1998. I was its founder and director until October 2000.
Back to India…
YC: It must have been a great feeling to come back, wasn’t it?
Alok: Indeed! I was even criticised that I chose IIT Delhi to set up IBM India Research Lab because it was my alma mater (which I won’t completely disagree with). IIT Kanpur was most interested in our program, but travel to Kanpur was troublesome in those times. That was the primary reason I chose IIT Delhi. So we started our program, and the laboratory grew to 30 PhDs and 30 Masters during my tenure.
It was during 1999, I met Marc Vollenweider. He had moved from McKinsey Zurich office to India to be the partner in charge of the McKinsey Knowledge Centre in India. Our kids were studying in the American Embassy School where our wives met and became friends. We invited them over for dinner, and our conversations led us to my first business venture. In December 2000, Marc and I started Evalueserve.
Since both of us came from reputed firms and were backed by our experience, we thought we would easily get $2 million in revenue within the first year. But it was all for nought – the company got zero revenue in the first eight months!
In retrospect, we were arrogant and ignorant about how the world works. We should have realised it was the ‘brands’ of IBM and McKinsey that were selling, not us. We “pivoted” and decided to sell to smaller companies instead. The equation changed, and Evalueserve got $2 million during the next sixteen months, thereby becoming profitable.
YC: How was hiring during Evalueserve and now Scry Analytics?
Alok: Until 2007, hiring was much easier! We even hired people from IIT Delhi and IIT Kanpur during 2001 and 2006. It was after the arrival of the banks that hiring became more challenging. Employees were being trained to converse with the US and European customers and both domestic and international markets were opened to Indians. However, hiring started becoming challenging during 2007-2008, before the Great Recession.
Hiring is a much bigger challenge now. People have a lot of opportunities now with so many start-ups, which is a good thing. Now the job market is much more developed with many global opportunities as well. But it has also led to ‘job-hopping’, which is neither good for the employees nor for the employers. It is not good for the employees because they simply hop from one job to another every 30 months, thereby wasting at least six months every time they move. It is not good for the employers because knowing that the employees will leave, they do not want to train their employees well.
YC: What would you suggest to founders of SaaS start-ups, willing to see globally?
Alok: Sales is the hardest job.
- In sales, you must be persistent and persevering.
- Make sure that you have the right market-product fit. You should analyse your audience, figure out the right pricing – which is always hard – and then try to sell it.
- Talking to customers is inevitable. Right product market fit can only be achieved only by talking to customers regularly. For example, it might be a problem with the user-interface experience or a lack of features. Take the help of your initial clients to identify the mistakes and resolve them.
- Create a two-minute sales pitch. Have your sales technique nailed down, so that you can explain it in two minutes. Make sure it has as little technology in it as possible. An average person to whom you’re selling is hardly technical. Many of the founders become very technical in their sales pitches, and that’s one of the things they ought to avoid.
YC: When did you leave Evalueserve?
The Birth of Scry Analytics
Alok: I wanted to go back to my roots in Machine Learning and AI. I left Evalueserve in January 2014. During 1982 and 2000, I had spent years researching and wanted to build something out of this research. The aim was to build another company like IBM Research Lab but include a sales unit along with it. Innovative products and services can thus be sold quickly rather than them rotting in a lab or written as a research paper or patent.
The concept was to have an R&D Centre, which comes up with good ideas, products, and solutions, along with a high-powered sales team. To have the best of both worlds. So that’s how I started Scry Analytics. Inc – AI & Machine Learning with purpose.
YC: What were the initial days of Scry Analytics?
Alok: The journey of Scry was like that of Evalueserve. I funded it with a loan. I am not a believer in taking funding early on or holding massive fundraising campaigns. I believe in bootstrapping initially. Not that being profitable is the sole aim of a company but taking a lot of money isn’t advisable. Once you raise a lot of money you literally ‘burn’ it… At least, you spend it in many wrong places.
In Scry, we built four products. In retrospect, we should have built only two and not four. So this is one thing I would suggest to entrepreneurs – You may have many audacious and ambitious goals, but keep them limited, at least during the first few years.
YC: What other messages would you like to give the young entrepreneurs out there?
Alok: The young generation of India has immense opportunities at their disposal. The country has grown enormously in the past 40 years. Per capita GDP for Indians has increased eight times and has provided the youth with enough support to pursue entrepreneurship.
- Always follow up a true and original idea. Start a company with passion and the perseverance to follow this passion. Build it for self-satisfaction and for helping the society.
- Understand the right product-market fit. The chances of succeeding are less if you’re starting without a good product idea. It usually does not show up initially but comes to bite later.
- Avoid the temptation of raising unnecessary funding. Yes, money may be cheap but once you raise it, you are forced to spend it also. Also, you would be blamed when you cannot provide the return on investment to those who have funded your company. This would unnecessarily put you under pressure.
YC: What do you consider as the challenges ahead in the industry?
Alok: The problem today is that people tend to imitate. They think that Amazon was not profitable for 20 years, so can I.
- Entrepreneurs raise too much funding and then they have to “burn” it. In the long run, it helps no one.
- Hiring issue is another. The VCs have probably funded at least a thousand companies, and each are easily hiring 25-75 good IT professionals. This has a cascading effect in the industry for now and may eventually result in the downfall of the system. On the other hand, I believe this will self-correct itself in 12-18 months.
- People who get hired just drop out on the day of joining. They don’t even show up. This is creating a very bad impression of Indians around the world, and the world is now a small place (with WhatsApp and other social media).
YC: Is there something that keeps you going at times of being low?
Alok: As I said in the beginning, my mother’s words were a deep influence on me. As William Wordsworth rightly said, “The child is the father of the man”. Your learnings as a child and your conditionings influence the person you are. Indeed, the family plays a crucial role in the upbringing of a child.
Also, the thought “I have nothing better to do” keeps me going and so does, “I am good at what I do, trained in this area, and passionate about it.” .
I am also very excited about this book that I am working on – Hundred Years of Artificial Intelligence, Past, Present and Near Future. It covers the period 1950-2049, which is 72 years of the past of AI and 28 of the future and it should be published by August-end of this year.
YC: What business opportunities do you see for coming entrepreneurs?
Small Scale Businesses the Future…
Alok: India has an advantage over many countries. We have had Kirana stores and other small or medium-sized businesses since the 1600s. Hence, entrepreneurship is in India’s arteries and veins. Eventually, it is micro-businesses and small businesses that create a good economy, and not the gigantic ones.
We are glad to have you with us. Wishing you great success in future!
Interviewer: Divya Jain